The long-term rewards will be greater if you prioritize building a strong referral network over following cold leads
Something funny has been happening around the office, and maybe you’ve noticed it at your office as well. We’ll get a call from a real estate agent who says his or her client is only available to see a listing at a certain time — say, 11:00 a.m the next day.
A few minutes go by, and we get the same call from another agent whose clients also want to see the property at 11:00 a.m., and guess what — they aren’t available at any other time. Maybe you already know where I’m going with this …
What we have in that moment is a situation where more than one agent is fighting for the same lead, and neither of them actually have a client. Their “client” went onto a search portal and booked a tour, only to be treated, unbeknownst to them, like a raw steak in a shark tank. We need to call this what it is: a cold lead, not a client.
As an industry, we must take a more critical look at the model of securing new business through search portals and ask ourselves how it’s beginning to warp the client-agent relationship dynamic. It’s not a good business move to hide behind an algorithm and let leads come to you.
We all know that leads pulled through websites have far lower conversion rates than those referred to us from past or present clients. Beyond that, with agents clamoring for online leads, it can easily start to feel like the customer is being treated as cattle, with their name and email being funneled along the system.
No one wants to feel like they are a numbers game or filling part of a quota.
When someone I’ve never met before walks into our office, it’s rare that I don’t have an automatic connection to them, whether they’ve been referred from a friend or former client. There’s an organic vetting that happens in the referral process that’s absent from the data-driven process online.
People generally use their best judgement when referring others. You want this good person to connect with that good person. As of yet, there’s no such formula online to match up real estate agents to clients that even begins to compare to a referral network.
That’s not to say winning clients is easy, only that we’ve already put in the work on the front end, treating our current and past clients with respect and great service, so the referral cycle continues.
It’s understandable to think that by following cold leads from search portals, agents might be able to build their network, albeit with a much slower conversion rate. We all have to start somewhere. But building a business solely through online portals can be a risky proposition.
Because you’ve built your entire lead generation on the back of someone else’s platform, all they have to do is change the algorithm, and you’re out of business.
There’s a cold convenience to getting leads through online portals. As a result, the serious buyer can be few and far between the other kinds of people who schedule a tour online. You’ll have the looky-loos, those just interested in touring real estate for curiosity’s sake, the nosy neighbors who’ve always wanted to know what the inside of Bill’s house looks like, and possibly the kind of person who orders food delivery frequently; that is, someone familiar with requesting services by pushing a button.
Buying real estate is not like buying a one-way ticket to Los Angeles — there’s a big, big difference.
In this industry, it’s all about relationships. Clients need solid agents beside them during what can often be very emotional transactions and major life decisions. Most times, clients don’t want that person to be someone they just met for the first time through an online form.
Do yourself a favor — prioritize building a strong referral network over following cold leads. The short-term may be more immediately financially rewarding, but the long-term goal of having consistent, solid clients is of much greater value.
Our clients keep coming back to us because they expect a certain level of service that we provide. We keep showing up for them, and they keep showing up for us.
Sean Z. Becker is the owner and principle broker at Sean Z Becker Real Estate.