With the rising cost of leads and reduced conversions rates, lead generation is becoming more expensive and less sustainable than ever. But with long sales cycles and limited opportunity for repeat business, what’s the alternative?
Real estate is, by its very nature, transactional.
We buy homes so rarely, that we don’t get to know our agents and have little need to remain in contact with them from sale-to-sale.
From the agent’s perspective, therefore, the focus is two-fold. Firstly, getting leads and winning listings and secondly getting as many people into view a property to guarantee that sufficient numbers are willing to bid to get the house.
The rate-determining steps are therefore lead generation and conversion rates. Mosts leads are still sourced from lead lists either purchased or created through outbound email or coldcalling.
Some agencies such as Castles in Dublin have been very successful with personalised leaflet drops and flyers, leveraging their strength in their target markets and brand awareness in discrete territories.
However, both of these routes are time-consuming and expensive.
Are search and social the answer?
Search and social media advertising is less common, accounting for about 22% of all lead creation, However, targeting at a local level is difficult and produces variable results. General keywords are competitive and expensive. CPC rates around €5 and conversion rates below 2% mean each lead’s costing over €100.
Either way, each of your leads is going to cost between €50 and €100, and if you factor it conversion rates of less than 5%, that’s giving a cost per sale between €1-2000, which, in the face of declining prices and commissions is not sustainable, especially in Ireland for example, where commissions are down to 1.5%.
No wonder then that many agents are looking in different directions for their business, but what are the options?
Relationship marketing for estate agents
The most obvious source is referrals, which often convert at over 45%, simply because the sales job is done before the lead approaches the agent.
However, this takes time, a commitment to excellence on the part of the agent and is outside of their control from a lead creation rate perspective.
Many successful agents are taking a leaf out of the corporate sales book, realising that the two key advantages of the referral are trust and expertise.
The fact that someone we know to be independent has had a positive experience pushes up the trust learning curve with a referral allowing us to reach the point at which we are willing to work with a company much faster than if we approached them cold.
It also means that we know that the referred contact has expertise which is relevant to us through the discussions with our trusted third party.
Agencies are starting to recognise that content marketing and marketing automation allows them to get over the hurdles caused by long gaps between sales by creating relationship opportunities which will ultimately lead into listings or sales in a more cost-effective manner.
This means the creation of online communities of individuals who opt in to receiving your communications and are prepared to engage with the content you create.
This is important because recognising that the content needs to be what the audience wants to hear, not what the writer wants to say is a key concept for effective content marketing. No-one wants to be bombarded just with new listing messages!
The platform is important too.
Social media offers a great opportunity to broaden the audience base, but it’s very low engagement, whereas email subscriber bases will be smaller and more difficult to build but will be substantially more engaged.
Stepping into content
Depending on how committed you are to content management and your ROI timeline, you can create deeper and deeper levels of relationships.
That’s the key to success, realising that your not selling houses in your marketing, your selling relationships. Your audience needs to buy into you before they will buy what you are selling.
The Marketing Funnel
For the company shifting from a transactional to a relational selling model this is the simplest step, as it allows you to start to build a content marketing funnel without losing sight of the importance of a call to action leading to a specific endpoint.
This approach centres on providing content which is relevant and interesting to the audience, but retains some focus on the sales process. The rule of thumb is that 80% of the content should be pure content and 20% sales focussed.
This can mean retaining a call to action on all mails or focussing some mails or posts on the process or competitive advantages of the product. The key is the mix. More obvious calls to action or a sales approach will push some people down the funnel faster but are likely to disengage a lot of people.
Companies coming from a softer, marketing-led background or who have found their funnel approach plateauing, tone down the overt sales pitch in favour of a greater focus on content which builds authority and trust with the potential for messages to be shared.
This is the more traditional social media approach and leads to greater engagement and lower dropouts, forming a strong and growing audience.
Sales messages are downplayed considerably so it takes a bit of a leap of faith coupled with strong marketing skills to create what is essentially going to become a strong source of high-quality leads, akin to those generated from referrals.
One example of this is the 33 touch campaign run by Keller Williams companies.
In Ireland, this involves a 2 strand approach, developing the agent’s reputation for both professional and local knowledge, tapping into the audience need for estate agents that they can trust both to know the area intimately and be both professionally competent and successful.
Audiences are split by region of interest and receive two communications per month, one focussing on the area ( best restaurants, relevant news stories etc) and the other a market report detailing new listings, price movements and general commentary.
Selling and listing call to actions are conspicuously absent.
The upshot of this is open rates in the late 20’s and virtually no unsubscribers, leading to a growing audience. Listing enquiries naturally fall out of the process, but there is no push.
From an agent’s perspective, Keller Williams automated marketing tools are linked to the CRM, making lists and campaign management simple minimising the need for marketing support and letting the agent’s personality shine through. Social media posts can also be scheduled automatically from within the platform.
Monetising your base
Like Google and Facebook before it, Keller Williams has realised that once it has a loyal audience, it has the potential to offer them a range of products and services outside of the core offering.
The products and services it offers need to be relevant and aligned and obviously provided either internally or via aligned, well-vetted but non-competitive providers.
Keller Williams is able to leverage its global reach and size to negotiate good deals on traditional real estate products like mortgages, home improvement loans and insurance, but also recognises that the transition from one home to the next is only relevant for a small portion of its audience, whereas the others are settled homeowners.
Plumbing, gardening, home warranty and cheaper utilities are much more relevant to the majority of its base and providing compelling offerings is a great way to both provide stickiness and an ongoing revenue stream.
This isn’t without its pitfalls, however, as the affinity benefit means that whilst a good experience will act as a halo around the brand, any bad experiences with third parties will also negatively impact, so picking the right partners is essential.
It’s also important to limit the offering and ensure offerings are aligned with the core proposition otherwise you risk diluting the brand.
The revenues from cross-sells are rarely high compared with the core proposition, so it doesn’t make sense to lose sight of your core business.
Servicing your base through data mining.
As it transitions to a technology company, Keller Williams is already planning the next-generation technology utilising AI and hyperlocal content to provide an invaluable real estate tool for consumers and agents alike.
On the consumer side, content is localised to a specific address, giving access to a range of services specific to your home, acting as your home’s personal assistant effectively.
Want to know what your house is worth now or projected into the future? How about what it would be worth rented on Airbnb or Long term rental? The app gives consumers to create their own landing page, with details on their home, its current value, services in the local area and anything else that the homeowner might need.
Partnerships with companies like Nextdoor allow additional features like combining the best features of a Facebook, WhatsApp or Justeat in a local, curated group or provide highly localised and differentiated services.
From the corporate side, datamining and AI allow agents to predict when a consumer is likely to be considering a change, prompting a reach out, for example.
Content remains at the heart of the offering, as effective adopting requires access to service and content which continues to be relevant and useful to consumers.
The benefits, however, are game-changing.
As the go-to app for all of your homeownership and needs, Keller Williams stands to own the consumer’s interaction with their home, and who do you think will be the first person they think of when it comes to selling their home?
The future is relational, not transactional.
Building strong, long-lasting relationships with potential consumers is the future for real estate and this takes courage, patience and a long term approach.
You need to focus on what you can offer your consumer not what they can deliver for you, it really is a buyers market! However, the rewards are potentially huge.
Not only can first movers capture a large share of voice which can be translated into a cost-effective lead flow, but they have the potential to broaden the revenue base for the company and potentially lead to diversification and derisked revenues long into the future.