I’ve been in the real estate technology space for a long time and distinctly recall the beginnings of the “leads tsunami” that was created by the likes of Zillow and realtor.com as they worked to keep agents paying monthly fees and revenue flowing. They “rang the bell” for agents and subscribing brokerages by moving further up the marketing funnel to attract those they said were ready, willing and able to buy or sell a home.
From the get-go, I never understood it. I used to joke that every newborn had become a lead. There were seemingly billions of real estate leads, but at that time there were only about 5.5-to-6 million transactions. Nevertheless, we saw agents and brokerages spending a fortune on leads. Along with the outlay of cash, brokerages happily invested in staff to “scrub” leads and prepare them for the agent.
The tsunami grew. The number of leads continued to explode even as their quality and ROI diminished. Agents, teams and brokerages eventually started to loudly voice displeasure with the quality of leads as agents didn’t even bother to email, call or text these potential clients.
Along with there being millions of bad leads, the industry was also enamored with buyer leads. This made little sense as even the most introductory real estate courses explain that getting listings is the name of the game. Having a listing ensures at least one transaction side without the time-consuming activities of successfully shepherding a buyer through the process. A listing agent also gets the powerful benefit of a yard sign and increased visibility.
Don’t get me wrong; I believe the industry had to go through this introductory phase of lead generation to get to today. We had to gain the experience of what a good or bad lead is. We had to understand what we were paying for. And we had to learn that a lead is only as good as the work that goes into it—even a great lead!
I believe we are now ready for the next iteration—properly mining for prospects—and an increased sophistication of predictive analytics. For example, in our last reporting period, across 10 top New Jersey zip codes, our nSkope tool identified about 49,000 homes that were predicted to come on the market over the next 6-12 months.
Incredibly, 9.75% of them did!
Not only does predictive analytics reduce the potential audience to market to, but it allows brokerages and teams to target potential prospects more effectively. But remember, no matter how detailed your predictive analytics report or how robust the evidence, without a smartly worked process these prospects will not become leads.
Here are some best practices we recommend for great success with your predictive analytics tool:
- Go through the list of prospective prospects with a fine-tooth comb. A brokerage or team of any decent size will likely have a few agents who already know the potential seller. If so, an email, postcard/flyer, social media campaign and outreach can be an effective way to get in front of them. Remember, because these leads are predictive, you may be reaching out BEFORE the potential seller even knows they are fully committed to selling.
- Don’t be afraid to use your already-successful marketing resources while recognizing you are likely targeting a more receptive potential prospect.
- Match the collateral to the seller. Utilizing generic ads, flyers or postcards defeats the impact of predictive tools. For example, if you identify a potential seller as an empty nester, why show them images of young couples with their children? Speak to them as you know them. At the same time, you can showcase to this potential client where empty nesters are moving and how others like them are navigating the frenzied market of today.
- Targeted door knocking, calling and emailing all have great value. While no algorithm will get every home right, these prospective prospects are usually much more receptive than most.
- Connect quickly and on a regular cadence. Most predictive analytics tools focus on the relative immediate future. We have found that of those we predict correctly, most will list between 6-8 months.
- Use predictive analytics as a guide to help you succeed faster and more efficiently. By itself the data will not win business.
Using predictive analytics is a powerful starting point and can yield tremendous success, but these leads must be worked. If you have the right attitude, time, staff and energy, predictive analytics are the beginning of real “one-to-one” marketing that can change the game of real estate sales.
Tom Gamble is the Co-Founder and CEO of TK Interactive.