Unleashing Success by Combining Proven Strategies with Predictive Analytics in Low-Inventory Markets
Fewer than 2% of homes changed hands in 2023, marking a 10-year low. Thanks to low inventory and high mortgage rates, just 14 homes out of 1,000 changed hands in the first 6 months of 2023, the lowest rate in a decade, according to data released Tuesday by Redfin
Sounds pretty doom and gloom, but is it?
In the ever-evolving real estate industry, finding new listings is a constant challenge in any market. However, by combining proven prospecting strategies with the power of predictive analytics, real estate professionals can gain a significant advantage, even in a low-inventory market.
So, no. It’s not doom and gloom. It’s just time to get back to basics to create your own inventory! And why not use technology to get you there more efficiently and at a lower cost?
Understanding Predictive Analytics:
In a world where ChatGPT made AI mainstream, predictive analytic platforms are being portrayed as the “silver bullet,” but are they?
Predictive analytic services leverage historical data, market trends, and homeowner profiles, attributes, and behavior patterns to predict which properties are likely to be listed in the near future. Using AI to determine WHO to prospect and WHEN to prospect far exceeds the value of buying a static prospecting list. However, it doesn’t work by itself and certainly doesn’t work when combined with the basic principles of successful prospecting.
Build a Strong Foundation:
Before diving into predictive analytics, ensure you have a solid foundation in proven prospecting strategies. This includes activities like networking, direct mail campaigns, door knocking, and online lead generation. These traditional methods establish connections and generate leads, setting the stage for successful integration with predictive analytics.
Identify the Right Predictive Analytics Tool:
Choosing the right predictive analytics tool is crucial. Look for a service provider that offers accurate and reliable data, robust algorithms, and a detailed profile of the home, its members, and the neighborhood it resides in. These facets will dramatically increase your ability to generate relevance and engagement with the prospect.
Align Predictive Analytics with Prospecting Strategies:
Now comes the integration phase. Here’s how to align predictive analytics with proven prospecting strategies:
1. Targeted Direct Mail Campaigns:
Leverage attributes in the property profile as well as point of interest attributes of its members (retiree, young family, high-equity household, high-income household, etc.) to personalize your direct mail campaigns. Utilize an offer or message that aligns with the prospect, highlighting your expertise and track record in similar transactions.
2. Efficient Door Knocking and Cold Calling:
Let’s not forget going old school with the door knock. Prioritize neighborhoods where predictive analytics indicate a higher probability of listings. By focusing your door knocking and cold calling efforts in these areas, you can maximize your time and increase the chances of finding motivated sellers.
Follow Up with Precision:
Regardless of the prospecting strategies employed, follow-up is critical. Mailing, calling, or knocking once isn’t going to cut it.
Predictive analytics can provide insights into the optimal timing for follow-ups based on homeowners’ behavior patterns. Utilize this information to nurture leads more effectively, ensuring consistent communication and building trust. Remember, timely and personalized follow-ups can be the key to converting prospects into clients.
Continual Evaluation and Adaptation:
Evaluate the effectiveness of your prospecting strategies and predictive analytics integration regularly. Track key metrics, such as lead conversion rates and time-to-list, to measure success. Identify areas for improvement and refine your approach accordingly. Stay updated with advancements in predictive analytics technology and adjust your strategies as needed.
Using AI isn’t a silver bullet by itself, but by combining proven prospecting strategies with predictive analytics, real estate professionals can gain a significant edge and, in most cases, prevail even when inventory is low.
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