The single largest source of financial “bleeding” in your real estate business is leads that are either poorly followed up with or not followed up with at all.
What’s worse is that in almost every case, it’s pretty much preventable as you and/or your team members have control over all the reasons that it happens.
This is not to say that you’re going to convert every lead that you generate, because that’s just not realistic to expect.
What is realistic, however, is that you can stop the bleeding in your lead conversion strategy if you do a few things better than you may already be doing them.
Here’s a look at what we recommend you do:
Speed doesn’t kill...it saves
Speed of response is likely one of the most important things you can do to impact your conversion numbers that cost little to nothing to implement.
Insidesales.com gathered three years of data from the calling efforts of six different companies.
The data was then analyzed with the help of an MIT professor to determine what the best practices are for achieving maximum contact and conversion rates over the phone.
The ultimate result of the study proved that having a speed of response strategy in place impacted contact and conversion results tremendously.
One of the most shocking pieces of data to come from the study was that responding to web-generated leads within 5 minutes led to a 900% increase in contact rates.
How profoundly would your conversion improve if you increased your contact rate by 900%?
How about if you even increased it by half that?
It would change the trajectory of your business forever.
Here are two more results from the study that should make it a no brainer for you to implement a permanent speed of response approach into your ongoing calling efforts:
The odds of calling to contact a lead decrease by over 10 times in the first hour. This graphic shows us how waiting even an hour can hinder your efforts to reach someone significantly.
If you can’t make contact with your leads, your business can and will come to a screeching halt. Knowing this, it’s crucial that you and/or your agents make a solid effort to contact every lead that comes in the door immediately.
2. The odds of qualifying a lead in 5 minutes versus 30 minutes drop 21 times. And from 5 minutes to 10 minutes the dial to qualify odds decrease 4 times. It stands to reason, then, that if your ability to contact the lead diminishes significantly after an hour, your ability to qualify the lead will also suffer considerably during that same period.
In the end, you have to ask yourself how significant a 100% increase in contact ratio would impact the results you get with your leads?
As well, what would be the effect of a 21x increase in qualification have on the bottom line of your company?
I think it would be a game changer for sure.
Making contact, period, is half the battle
The straight truth is the majority of real estate agents do a sub-par job in getting back to leads consistently and quickly.
Harvard Business Review produced a study called, The Short Life of Online Sales Leads, “…although 37% responded to their lead within an hour, and 16% responded within one to 24 hours, 24% took more than 24 hours—and 23% of the companies never responded at all.
The average response time, among companies that responded within 30 days, was 42 hours.
As well, the WAV Group published a study titled Agent Responsiveness Study Reveals Critical Flaws in Real Estate Lead Response. In the report, the WAV Group provided data on lead responsiveness results from 384 different brokers in 11 states. The individuals who conducted the research “secret shopped” real estate agents in their marketplace by inquiring about listings and the real estate services they provided.
Here’s what they found:
While this is substantially better than the 42 hours reported in the Harvard Business Review report, it is still abysmal.
What’s even more concerning is that the number of contacts was so drastically low as 55% of selling opportunities come at the 5th contact attempt or later.
Not calling fast enough - or making enough contact attempts - will, no doubt, stall your conversion results.
You’ve got to have mad skills
It doesn’t matter if you have a nice car, dress well, wear nice shoes, have a great listing presentation or an amazing pricing model for listings.
If you can’t convert a lead to a qualified listing appointment, your prospect will never see any of those things.
You must be able to effectively handle and convert each of these seller lead sources:
Neighborhood Data (Circle Prospecting)
Home Value Leads
The better job you can do with each of these lead types, the more appointments you can get for yourself.
What’s even better than that, is you’ll need to speak to fewer people to get great results.
Here’s what using strong scripts and dialogues help you do well on each call:
What Using Scripts Does For You
Here’s what I know: you’d never go on vacation without a plan, you’d never build a house without a plan, and you wouldn’t invite your friends over for dinner and drinks without first planning a menu.
You plan these things because you want to achieve a specific outcome and to make sure that you know what to expect along the way.
The same thing applies to using scripts and dialogues: they are the track you run on so that you know what to expect on the way to the outcome you seek: setting a qualified appointment.
You need to automate your response strategy
At some point, doing everything in your business means that something is going to suffer.
In order to do a great job in converting leads, you need to make sure that you stay in touch with your clients in between phone calls and face-to-face visits.
The best way to do this is to have a Customer Relationship Management system that is part lead-generation program and part relationship management program.
Top programs automatically and consistently send meaningful, purposeful emails, texts and voicemails that not only nurture the relationship, but also have solid calls to action to keep your prospect engaged until the time they are ready to sell.
By having this type of technology in place, you dramatically increase your conversion percentage while continuing to find new listing opportunities on a day-over-day basis.
Not utilizing a good strategy for automatically and systematically nurturing leads from initial contact to the time they are ready to sell is a huge impediment to solid conversion results.
Stopping the bleeding in your lead conversion strategy is of the utmost importance if you want to see profits in your real estate business.
In many cases, you don’t even need to spend a lot of money to see a significant improvement.
Follow the steps I’ve shared with you today and you’ll be well on your way.