This is Why There is No Such Thing as a Bad Lead
“These leads are junk!”
You’ve either heard it or said it about one lead source or another in your real estate career.
I’m here to tell you that there’s no such thing as a bad lead.
Notice I didn’t say that every name that pops into your CRM is a good name, that every phone number you get is a good phone number and that every email address is the right address.
We’ve all gotten our share of leads that look like this:
- Name: Superman
- Phone number: 214-555-1234
- Email: email@example.com
It’s all part of the process, but it’s not a bad lead.
In fact, it’s not a lead at all.
It’s just bad information.
And if you think about it, Superman can fly anywhere he wants faster than a speeding bullet to be some place in minutes. Why would he need a house anyway? Right?
All kidding aside, at the end of the day, it has to do with what qualifies as a lead and what you do to convert that lead.
Once you understand that, you, too, will agree that there’s no such thing as a bad lead.
Why There’s No Such Thing as a Bad Lead
Let’s start with the basics:
The definition of a lead:
- If a lead is going to be a good lead, it needs good contact information. In my world, a AAA lead is one that has a good name, a correct phone number and a good email address (and that’s only if an email address is possible to be provided based upon a lead source.
Now, if the lead only has a good phone number and an email address, but no name, that’s still a good lead.
If you only have a good phone number or a good email address, that’s still a lead. I prefer phone numbers over email addresses, but good contact information still qualifies it as a lead.
Email addresses, alone, really hamper the conversion process, so I don’t love just having an email address. But again, if it’s a good email address, it’s a lead you have a shot at converting it.
If you have a good home address and can get the phone number through some sort of reverse look-up mechanism online, that can qualify as a lead, too.
So, if you have any sort of good contact information and have the ability to start and continue a conversation with someone, that’s a lead.
If you don’t have any good data, it’s not a lead. Plain and simple.
The definition of a lead Part II:
- A good lead must also express an interest in (and be willing and able to) buying or selling a home at some point in the future.
Now, before you start to aim that pointer finger and shout “I told you so” at your computer screen, consider this…
Prospects tell people all the time that they’re not interested in selling/buying when they really are.
In most cases, it’s because it’s not the right time for them.
You see, most people overestimate how long the process is going to take and underestimate how much money they’ll need in order to sell or buy a home.
The average Internet generated buyer lead is anywhere from 4 to 6 months away from buying a home.
The average home value and demand generation seller lead – expireds and fsbos notwithstanding – is at least 6 to 8 to months away from selling.
The key to getting the business is whether you follow up consistently and long enough or not. I’ll talk more about this in the next section, but it’s good info for you to know.
As a result of that, lots of prospects get to the job of researching selling or buying a home way before they are ready either from a time standpoint or a monetary standpoint.
Subsequently, that’s why it doesn’t always have people’s true timing and motivation (or a solid gauge on their actual capabilities to complete a sale) lined out perfectly for you when your email or phone dings to let you know a hot new lead has come your way.
And it’s also why you have to do some digging – and call multiple times – to convert a suspect to a prospect, a prospect to an appointment and an appointment to a client.
Which leads me to my third point…
There is such a thing as bad follow up:
- There was a study done by a brokerage that generated 5,000 online leads over a 12-month period. The goal was to measure the conversion rate and the ROI.
The breakdown of the lead sources was 3,500 buyer leads and 1,500 seller leads.
The results of the study were shocking to say the least.
Of the 5,000 leads that were generated by and for this brokerage, 678 of them turned into actual sales within 12 months.
That’s a 13.56% conversion rate and awesome by anyone’s standard.
Much to that broker’s chagrin, only 4% – yes that says 4% – were captured by the agents to whom those leads were given in that brokerage.
The rest were picked up by agents outside of the brokerage in the same marketplace.
Here’s the kicker: there were over 200 agents in that brokerage that received leads.
The broker, himself, thought the leads were junk until he did his research and completed his study. Once he got the results, he realized that it wasn’t the leads that weren’t performing.
79% of the leads that agents believe to be junk and then toss in the trash are done so without proper follow up through calls, emails, drip campaigns and voicemail strategies.
As well, according to Realtor.org after interviewing thousands of home sellers and buyers, leads generated from marketing account for 40% of real estate business.
And this does not include outside referrals and repeat business.
Leads generated online leads are proven to be the fastest way to put yourself into position to get repeat business.
This explains how some agents can start online lead generation efforts in a market and within two years, be a major player in their geographic area.
Hopefully, I’ve gotten you to take a different look at the leads you generate. If you’ve got good contact info, it’s a lead. If the person you’re talking to is looking to move at some point in the future, it’s a lead.
If you’ve got good contact information and the person says they’re not interested…but you use good scripts and dialogs to find out the truth: that’s a lead, too.
Remember, it’s not a bad lead…it’s just bad timing.