Millions of dollars are spent each year by real estate agents to attract leads. Known as “pull marketing” the main goal is to create a situation where the prospect calls you directly. Website SEO techniques and blogging, as well as more traditional advertising such as real estate magazines and newspaper spreads, are just some of the many ways real estate companies and agents are using to pull in those prospects.
Yet even with all the time and money invested in marketing, if those leads don’t turn into sales then it’s worthless. Here we will explain why real estate agents are not converting their leads into clients and how to increase your conversion rate by handling these calls/leads properly.
Why Prospects Call
Before we talk about how to properly convert the leads, it’s important to understand why the buyer is calling in the first place. Prospects call real estate agents to do 3 things:
- Eliminate the property
- Eliminate the agent
Does this sound strange? It’s true! Buyers are trying to eliminate options so that they can narrow down their options and spend time only on the properties that might actually suit their needs. Studies show that only 1% of buyers actually buy the property they call the agent about, so if you don’t convert that lead into a client, you have only a 1% chance at making a sale.
3 Keys to Lead Conversion
How can you increase your lead conversion rate and grow sales? There are 3 keys to lead conversion that will dramatically increase your conversion rate.
- Speed of response
- Number of attempts to reach the lead
- Knowing what to say when you reach the lead
WAV Group conducted a study called, “Agent Responsiveness Study Reveals Critical Flaws in Real Estate Lead Response,” in which they sampled 384 brokers across 11 states. The researchers pretended to be leads, and asked about listings on the broker’s websites. What they found was that:
- Average response time was 15 ½ hours
- Average number of call back attempts was 1.5
- 48% of buyer inquiries were never responded to at all
Of course, we can easily see why these leads were not converted.
Speed of Response
How quickly you respond to the lead is the number one determinant as to whether you convert that lead into a client or not. In a survey done by the California Association of Realtors asked consumers how quickly they expected to hear back from a real estate agent when they called/emailed. 59% said they expected an instant response. The odds of reaching a lead drop by 100 times by just waiting 30 minutes vs calling back in 5 minutes.
Of course, it can be hard to drop what you’re doing and respond immediately. But when you realize that 35-50% of sales go to the agent who responded the fastest, it’s easy to see that this is the single most important aspect to converting that lead into a client. While we can’t be all places at once, with advances in technology, concierge services, and auto-response options, letting a prospect know that we received the lead and appreciate their interest, we have some options to cut response time dramatically.
Number of Attempts
As the WAV study showed, most agents give up very quickly when responding to leads. Real estate agents who have the greatest success converting leads into clients call/email 8-12 times. Remember that these are warm leads; they reached out to you first. You are simply trying to respond and help them. Keeping this in mind can help you find the motivation to keep calling/emailing until you reach the lead.
What Should You Say?
One of the biggest problems most real estate agents have is that when they do reach the lead, they don’t know what to say. Worse, they often say the wrong thing. Most leads are inquiring about a property they have seen either online or from a yard sign. They are typically calling to ask about that property.
As we’ve already learned, buyers are typically calling to eliminate the property. When you add that only 1% of home buyers buy the home they call an agent about…it’s critical that you are prepared to offer the prospect something of value so that you can continue building the relationship. Here is an example;
“Hi, this is _____ with _____. Thank you for taking my call. I’m calling to update my files to see if you’re still in the market to ….BUY A HOME… or find out if you’ve already purchased something?”
That’s it! Simple and direct. Most importantly, it opens the conversation up with a purpose and demonstrates you had a reason for calling. I suggest that you do your research ahead of time and be prepared to discuss not only the original property but others in the area that might fit the same criteria. Especially valuable could be a brand new listing or knowledge of one not on the market yet. This builds your value with the lead and encourages them to arrange an appointment to learn more.
Finally, most of the time the leads that come in, whether by phone or online, are usually not active buyers. They are in the dreaming or planning stage. Whereas most agents will dismiss these leads as a waste of time, I urge you to use it as an opportunity to help them develop a plan. This way, when they move from dreaming to buying, you will have already established yourself as their agent, and your sales will increase dramatically.
By understanding the motivations for these prospects and meeting their expectations, along with tenacity, you will see your sales increase and your business grow.
I’m Shon Kokoska founder of ICON COACHING an elite training program for real estate agents. It is my goal to help Real Estate professionals reach their career goals, and find success. The only way to do this is with hard work and proven practices. For more life changing tools you can use to accelerate your business, register for the Icon of the Month Webinar now. Seats fill up quickly so do not hesitate. Change your life today.- Register Here.