04
The Sales Cycle of the Web Lead
Filed Under (Real Estate Website Conversion Strategies) by Lou Lynch on 04-03-2009
Tagged Under : conversion, follow up, lead data, real estate website, web leads
According to recent data, more than 70% of real estate web leads are not ready to buy (or even look at) homes until 90 to 120 days after they first register on a real estate website. In fact, the majority of the leads that are in the 90-120 day period are non-responsive and simply not ready to be contacted by a salesperson. The bright side is that almost 80% of those leads will eventually close up to 1 year after the 90 to 120 day mark making the average sales cycle 15 to 16 months in total.
Bad News for Old School Sales People
Traditionally, sales people are taught to spend their time on “hot leads” (ready to look) and devalue customers that take longer to buy. While working with “hot leads” is probably a good idea for commission based sales people that are looking to efficiently allocate their time. The bad news is that this approach is leaving a good amount of business on the table. The problem is that traditional sales people will only attempt follow up directly after registration and will abandon leads after a few attempts not knowing that 7 out of 10 are not ready to be contacted (in my office it was more like 9 out of 10). In short, it is vitally important to contact the lead as quickly as possible but it is also important to understand that most of them just aren’t ready yet.
The right way to do it
When training my agents, I continuously used the words “prompt and persistent” when referring to the follow up of real estate web leads. Even though only 3 out of 10 will responsive, you risk losing even those 3 if you don’t get to that lead before they move on to a different website. Another thing that is very important to understand is that the remaining 7 ARE NOT POOR LEADS. They are simply not ready to be contacted. You as a sales person must figure out how to be in contact with them at the point where they are ready to be contacted. There is a systematic approach to recognizing the readiness of a lead using proper lead data analysis. I will go into details of this in Part 2 of my “Analyzing Lead Data” series.
Excellent post Lou! Good to see you putting up some more good material. In regard to the article, I have found this to be very true not only in the buyers market we have now, but also in the sellers market we had a few years ago. It is not localized behavior either in that it was demonstrated by website visitors / buyers on sepearte sites, seperate States, and seperate market types (metro residential as well as beach vacation). I look forward to article number 2!
Hey Cal . . . thanks for dropping buy.
I agree that this is not a localized behavior, however I do see “days between milestones” being different based on the market and the sales ability of the person doing the follow up. As I stated in my post, in my office it was more like 9 out of 10 leads were non-responsive in the 90-120 day period. Ulster County has a large second home market which results in a lot of tire kickers. Some leads can be as far out as 2 years from being ready.
More good stuff yet to come.
Lou – really awesome post…the one statistic I was clueless about was “3 out of 10 responsive”. Good to have in mind though I guess that makes sense Hmmm…are you going to go into analytics or more grassroots tracking for lack of any better words…like search behaviour/”consistency” a la REW CMS without any modifications. Whatever the case, Looking forward to hearing your thoughts. Thanks, Lou…K
Thanks Kevin. I am going to get a little more into lead behavior. More specifically, I am going to write a piece on how to identify the readiness of the lead by analyzing the lead data (user tracking). The important thing to remember is to identify those that are ready now as opposed to those that need to be incubated. That type of analysis is done by looking at their data and more importantly contacting them as soon as humanly possible.
Thanks for the comment Kevo
Great information Lou. It’s cool to see some facts and figures behind the motivation or behavior of leads. I have noticed that most leads off my site are more responsive after some time rather then the “immediate” follow up.
Yeah Derrick . . . I am a fact and figures guy too. just remember, the immediate follow up is important in knowing which ones need to be contacted later. Besides, you don’t want to miss out on the 3 out of 10 that are ready to talk to you now!
Lou – great information and advice. Staying in contact with those buyers that are not “hot” is the challenge of working with Internet leads. I’m looking forward to your Part 2.
Nice stuff, Lou! Great visual. We totally agree. Many we are presently working with registered over a year ago. We never delete them as you never know… even Mickey Mouse may want to buy a house!
Hey guys, thanks for the comments. I have a lot more stuff planned including: How to identify a ready lead just by looking at their lead data also, how to find, hire and train a lead coordinator (so your agents aren’t bogged down w/ follow up).
Check the subscribe box and stay tuned!
This is why a good drip email follow up system is so important. When you receive a lot of leads it can be challenging to figure which leads are worth chasing. Some of these leads will tie you up in an endless email conversation and then never buy. It doesn’t take too many of those leads to burn you out.
The problem with working in a 2nd home market like Sarasota, Florida is that those buyers are not in a must buy situation. Right now, it is more about getting a good deal then finding the right property. I think a relocation buyer is a little more motivated.
Good info and stats Lou.
Hey Marc, thanks for stopping by. You are right, it is a challenge trying to figure out what leads are worth chasing (IMHO) is to properly analyze for the lead for “buyer behavior” with every contact attempt then classify it so you are spending your time on the good ones. Then when you are freed up a bit, you can go farming through the leads that seemed a little less anxious. Check out my blog on How to best analyze lead data.
See ya around!
Very helpful. I just launched my website in July and have been reading non-stop about how to properly follow up with people with out being annoying. Thanks for the post
Thanks for the tips, we are in the process of launching a new website ans this is really helpful.
Lou I agree that the time line for contacting the lead and following up is short. You have about three seconds once they hit your site to capture their attention. I’m always working with my team to stay in contact with a lead with more then just a drip email campaign.
Thank you for the great information you have included here. Certainly given me some ideas.
Agreed…agents that are new to Internet leads get frustrated by the lack of response and lag time in response. For those individuals that don’t talk to you. You have to have a consistent and persistent follow up system (emails, newsletters, etc). A lead is a lead. You have to work it.
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Great article
the stats youve mentioned really dont surprise me that much – so many people use the internet to browse these days. Ive read stats somewhere that say that for small purchases of books, people often visit the website 3 times before finally making a purchase!
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It is amazing how much quicker everything goes on the web. If used properly you can make more money and faster.
Excellent post, Lou. I’m looking forward to reading your valuable insights on how to convert Internet leads. I find it really awkward to put people on a drip campaign so I haven’t up to now. I know that’s probably a mistake but I just can’t bring myself to do it (yet). The question then becomes however, how can I keep track of where all my leads are at without driving myself completely crazy?!
@Jolenta: I agree drip is not the answer but at the very least, it will keep your name in front of them while the lead makes the decision to move forward, which is vitally important as you know (8 out of 10 customers use the first REALTOR they come into contact with). Personally, I am not a big fan of receiving automated messages (drip). So when I am the one sending it, I try to make the information I am sending something of value to the user e.g. local resource lists, tips on financing, etc. This makes me feel better about setting customers up on drip as I am providing great customer service and not spamming them.
In response to tracking leads, it is a good idea to use a lead management system (if you aren’t already). Score each lead as they register and then again every time they return. Organize your lead list by score and start calling!
This was a really useful post, I would not have thought to consider some of the points made here! I have a small business and am looking to set up an online base, so I will definitely have to bear this information in mind when I consider web sales and would like to thank you for setting it out so clearly!
Meg
@Lou: I hadn’t thought about scoring each web lead in my lead management system. Currently I only have the ability to divide them into the following categories: active, pending (the default), rejected, closed. These are the categories that I see from the top level so if I want to know more about that prospect I have to click into each name. It’s too time-consuming so I’m not even working the leads like I should, I’ve started relying on them to call me (I know, not good!). If I were to add some custom labels to the above categorization, which ones would you recommend. Again, the whole objective to tweaking what I have would be to make it clearer who I should call or how many times I’ve tried to call or email someone so that I can either stick them on a drip or move them to Active status because we’ve made contact and they are open to working with me. Thoughts?