When people ask Doug Melcher, broker-in-charge for Paragon Properties, which lesson he’s learned the most from in real estate, he always recites a similar story. And it starts with an elderly lady looking for subsidized housing in Boston. Not the typical lead agents would fight over, no doubt.
In fact, Doug didn’t receive a commission from helping the woman. And he would argue most agents would classify this lead in the trash category. Nonetheless, he treated her like anyone else — helped her find a place to live and be comfortable.
Unbeknownst to him, this lady was part of a book club. After being treated so nicely, she began referring everyone to Doug; whoever was on the market for real estate.
In the months to come, Doug received multiple clients, closing several deals. One of them was extra special and always sticks out … because it was a multi-million dollar deal. A deal he would not have gotten without the referral from the elderly lady.
At the end, Doug wraps up his story with a final point. “Don’t judge the lead.” He hears agents complain about lead quality all the time. He hears statements like “This lead wasn’t even buying in my market” and “This lead isn’t buying at the price point I work.” Doug answers their objections with this:
“If you don’t treat the lead well, someone else will — regardless if you think they’re trash or too far out. Are you really willing to lose on a deal and future referrals just because of your perception? Anyone searching for a home is someone who will eventually act. It’s just a matter of time. Work it, be there, and reap the rewards later on.”
Doug’s story almost sounds like he won the lottery. What are the chances, right? But like his story, it’s tied to a rising issue in real estate: Lead quality. For this post, we’re going to address lead quality and how to handle the feeling of “these leads suck.”
Below, you’ll get to read advice from agents and brokers who have dealt with the issue. If you want to get a handle on lead quality, read on …
First Steps: Analyze & Troubleshoot (How Kevin Smits Does It)
When problems arise, you look into them. The same applies to lead quality issues. Agents on your team will tell you what they experience. It doesn’t mean the argument stops there and you play the Blame Game. You need to figure out why they’re experiencing these issues. Otherwise, you can’t make educated business decisions.
Kevin Smits, who leads the Smits Team in Colorado, uses a saying he learned in the Boy Scouts:
Whenever you point the finger at someone, you have 3 fingers pointed back at you.
This is why Kevin looks into an agent’s nurture and communication plan first, before he goes down any rabbit hole of lead quality. He’s found most times it’s not the lead who is terrible. It’s the response(s) the agent took.
Here are the questions Kevin asks when agents bring up lead quality issues:
- Is it the quality of the lead or the lack of follow-up?
- Are you looking at the real numbers? (i.e. what has been done to contact the lead?)
- If you have 30 or 300 leads, do they truly have a bad phone # OR email address?
Kevin will sit down with his agents and run through these points. He uses BoomTown’s CRM to pull up every communication record and analyzes what’s going on.
If the agent isn’t contacting the leads periodically, Kevin then knows there’s a motivation problem (completing your tasks). If the agent is calling their leads, but not getting appointments, then Kevin looks at their pitch and phone manners. Are they selling their service the right way? If not, Kevin helps them tweak it. And finally, if the leads aren’t answering phone calls, then it means the agent needs to change up the time to call prospects.
For Kevin, it’s all about optimization, not lead quality. It’s accountability. Small communication tweaks often result in better lead conversion.
Handling Leads Who Aren’t Ready to Buy Yet
Not every lead you get is going to be a golden nugget. A good portion of leads will be 6+ months out. It’s the nature of real estate, considering the investment someone has to make.
So, what’s the key to winning homebuyers who are not ready?
A lead follow-up process and a CRM to automate the work. Anyone searching for real estate will eventually convert. It’s all about timing. Stephen Cooley likes to tell his agents:
“You can be the nicest neighbor; get to know people around the area. You can even walk their dog in hopes they’ll use you when they decide to move and sell their house. But unbeknownst to you, that neighbor is at home, sitting in bed, looking at real estate online. All it takes is an agent to contact them while they’re looking online and ask, “How can I help you?” for them to win that lead. It’s a game of timing.”
The agent who places themselves in front of the lead at the right time is the person who will get the appointment. This is why you need a CRM to help you recognize buying signals and read lead insights — that way, you can act appropriately.
Of course, not every lead will respond to your first phone call or email. They have busy lives too, and again timing is a factor. This is why DJ DellaSala and Lindsey Maguire who lead up Ancient City Real Estate implement a 14-day follow-up plan.
The lead follow-up plan is CRITICAL.
DJ and Lindsey have their agents work off a communication process designed to uncover LPMAMA metrics.
This article is a good resource on winning the first conversation. And if you need email templates to use, BoomTown has a library you can leverage.
As you target lead quality issues, it’s important to build out a process (or a formula) for contacting leads. Establish a routine and hold yourself accountable to it.
A Mantra to Get You Over the Hump (Lessons from Various Brokers)
There’s a difference between a lead response and lead follow-up. The latter is about the day-to-day nurture of people. The former is 1 call or 1 text upon lead registration. The money is in long-term follow-up.
Ann Rudd, who is a leader at RE/MAX Collection Metro, runs her business under one mantra:
“How will I recoup my investment?”
If you’re generating leads, paying for advertising, or racking up expenses for tech-tools, you should be asking yourself, “What am I doing to create ROI?” When Ann hears agents complain about lead quality, she looks at their formula. Example: If you talk to 20 leads, on average, how many appointments will you get? Then you can calculate what kind of lead generation and follow-up you need to be doing.
This same methodology ties back to Kevin Smits’ belief: You have to be tracking and measuring everything. Running a successful business is about managing it, cultivating it. You have to be calculating to succeed.
Sometimes, when it comes to lead generation and quality, you have to ask yourself the hard questions. Are you working a market that will create positive results for you? Have you put yourself at a competitive disadvantage? Did you choose the wrong zip code to work? Is your process working or does it need editing?
According to Ann, real estate is about mitigating risk, so you can focus on the tasks that put money in your pocket. Technology should be used to eliminate administrative work. You should have a follow-up process to organize your day and keep you from deviating to the wrong tasks (that don’t put money in your pocket).
DJ and Lindsey sum it up: “There is no such thing as a bad lead, only bad lead follow-up.”
At BoomTown, we’ve seen clients actually convert leads who register with bogus info, people who fill out their first names as “PissOff,” for example. Ironically, sometimes they still use their real email or phone number, because they genuinely want to get updates on listings.
Don’t be quick to judge a lead and categorize them as “trash.” Build your process, persevere through the follow-up, and you’ll be surprised at the results.
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