Month: July 2015

Referencing “The Jerk” is a hobby of mine.

The leads are weak…  I’ve been in the business of generating leads for over a decade now, and I can firmly say that no matter the industry, the product, or the type of advertising being used there will always be a group of people caught in the endless loop that is the search for quality.

The principal itself is one that makes sense

“I have to invest a lot of time into qualifying/converting leads so I want ones who are worth my time”

However it’s just beyond this realization that many businesses real estate or otherwise fall into the abyss.  There seems to be a continuing cycle…

1.  Analysis Ad Nauseum: We start looking for any reasons to down grade the quality of our existing sources.  Price point, phone, email, time frame, and basically any one who is not ready to buy a luxury home with a cash offer today.

2. The Blame Game: Whether our ads are self managed or managed by someone else we are determined to find the “source” of the poor lead quality.  This usually leads to blaming the person buying your traffic, where you buy your traffic from, or some combination of both.

3. Let’s Break Everything: Once the blame game starts it never really ends.  Even if we subside our blame for awhile we ultimately come back to the Analysis Ad Nauseum, which leads to the blame game, which then brings us to the decision to quit, cancel, and just start all over again.

This three step process doesn’t just apply to online sources, it’s a cycle that’s repeated itself in all forms of lead generation for quite some time, but the additional data of online traffic puts it on steroids.  I’ve watched hundreds of people do this, and I myself have been a victim to this vicious  cycle more than a few times in my career.

What’s so dangerous about this process is that it causes perfectly rational business people to do things that make no sense at all.  They cancel valuable services or burn bridges.  They stop using proven methods for generating success, and worst of all they abandon days, weeks, months, and even years of hard work.

So is lead quality important?

Absolutely! Generating quality leads/traffic is crucial to any business.  Where things really get hairy, and the Analysis Ad Nauseaum begins is in the measurement of quality.  It’s easy to measure things like CPL (cost per lead) or volume of leads.  What’s difficult is determining things like  time frame, price point, valid info, and overall willingness to close.  This shit is pure black magic, and I often see people grasping for straws, and anecdotes  when entering the Blame Game step.

Then What Can I Measure For Quality?

Contact Information:  This is a huge indicator of quality in any form of lead generation industry.  Take a credit card app for example.  Those kids who want you to sign your life away for a T-shirt at your local university will usually review your app for bullshit information or missing fields, because for them no credit check = no pay.

When it comes to numerically measuring quality of contact info we need to keep a few concepts in mind.

WE CAN:

• Check formatting: Does this phone # have enough digits?
• Check for bounce: Did my welcome email bounce or fail to send?
• Check for complete: Is a field empty?

We Can NOT:

• Ensure this number belongs to this person
• Ensure this email is the primary address  for this person. Double opt-in is what my Yahoo! account lives for
• Know what exactly they are thinking.  Buyers are liars.

Now you might notice that the things we “can not” do are typically the things our agents/selves want from us the most.  This is where we need to get our heads on straight, and start thinking about what we can realistically change.  Putting a phone field, even one that’s required with a format validity check isn’t going to stop a person from giving you the # to Domino’s.

Here’s a basic way to think logically…

If X% of valid formatted phone/emails are received then Y% will actually belong to those people.

Measuring X is pretty straight forward, and can be automated.  Y requires intensively consistent, and persistent prospecting from agents.  (lol and pigs that fly)

Simply put, when measuring a traffic or lead generation source focus on X more than Y or your head will spin.

Quality Improvement Continued…

Traffic Sources:  In a previous post I mentioned some top sources for generating leads.   Again when it comes to improving those things  that are tough to measure such as willingness to close or price point what we have to do is simply use some common sense.

• Zillow/Portals = Property inquiry.
• Google = Searching for something about real estate.
• FB = Clicked on your FB ad, because it generated some form of interest.

All of the above are very different, but common sense says will be fairly reliable sources of quality traffic.  Resist the urge to “Break Everything”, and abandon these bread and butter tactics.  Just because you got a bogus lead or a few strings of FYOU@gmail.com’s isn’t a valid excuse to give up on any of the three core places people start their online real estate experience.

Capture Methods: “The Consumer is not a moron, she is your wife.” – David Ogilvy.

Looking at a lot of the capture/advertising tactics used by some; I get the impression that the real estate industry has a very low expectation of intelligence from their potential clients.  Donald Trump might be an actual presidential candidate, but that doesn’t mean that people will fall for your stupid tricks.

Require a phone number?  The consumer probably expects a phone call.  This may deter them from completing the form in the first place.  Those who really want whats behind that form (that’s a good sign), but fear sales pressure will likely provide a number known by Tommy TuTone.

The moral of the story here is evaluate your capture methods. Make sure that they are straight forward, and set proper expectations.  Over use of the word “free” when something is not free is an example of this in bad form.

A quick note on adjusting/optimization: Optimizing for lead quality makes even savvy marketers do stupid things.  Refer to the Can vs Can Not of quality measurement, and you’ll know what changes to make, and what results to track.

Quality Tips For Quality Leads:  Let’s wrap this up with a few main pointers…

• Stick with what works.  Results ARE typical is what we want to shoot for.  It’s usually the obvious.
• Don’t try to change things you know you can’t control.
• Don’t try to change things to try and change the things you can’t control.
• Play the numbers: You’re gonna get bad leads.  Deal with it.

Stay Tuned for a follow up to this post on qualification, and how to “deal with it” the smart way.

Brian Ostrowiak™ Ugly Graphic

Building an asset.  Something often talked about in real estate as a “long term” goal, but few know how to take action towards on a daily basis.

Let’s face it, most of the people reading this blog that sell real estate are working towards not having to sell real estate.  What we are working towards is to build a business, and selling or leveraging that asset as our exit plan.  Even those who love to sell, and work with clients on a daily basis will understand the reality that in order to truly build more wealth we have to build a team, and expand our operation beyond ourselves.

Fast forward a decade or two, and pretend the day has finally come that you want to sell the biz, and cash out.  What do you have of value to sell?  More importantly how is your business valued?

“My Brand” probably comes to mind when most people are determining what their unique value is.  “I’ve built a brand that people know, and trust”.  I’ll give you the benefit of the doubt that your brand really is well known, and trusted.  However if you want me to put a price on that how do I go about doing so?  What metrics would I use?

Monthly Active Users

Step outside the real estate world, and join the tech community.  What’s the number investors are talking about?  What’s the thing that makes an app like Instagram worth billions of dollars?  Monthly Active Users.  Facebook has a lot of smart people, and plenty of capital to hire more.  Instagram was a fun app that a company like FB could easily duplicate.  Why did they buy it?  Simply put Instagram has 300 million active users.(at the time of purchase)  Purchasing Instagram, WhatsApp, and other apps enables FB to gain technology and massive audiences. (aka subscribers)

Jumping back to real estate… Web presence is very important.  What investors/buyers/appraisers are going to be paying more attention to are the numbers of people actually engaged with the web presence of a brand.  Simply put even if you’ve sold thousands of homes, and have built up a large database of past clients; what is of value in your business is the number of people who are still contactable in that database, the numbers of people loyal to your brand, and the number of prospect-able users engaged with your web presence.

Acquire, Nurture, and Maintain

So much focus is placed on traffic and lead generation.  We want to capture leads, add them to our database, and nurture those opportunities.  Long term follow-up is typically though of as an offline tactic after the lead is acquired. Generating active users requires maintaining our database online.

Your website is not a net, lasso, or bear trap.  It’s not just a vehicle to grab people out of the internet, and spit them out into your spreadsheets or CRMs.  For the user your web presence is a huge part their interaction with your brand.

When I look at the web presence of many brokerages and teams I often see a scattering of tactics in piece meal.  They have a brand.com site, often a simple 5 pager.  They have one or several “Lead Gen” sites xyzhomesforsale.com, they have blogs, they have “SEO” sites thisveryspecificlittleneighborhood.biz, and a variety of started and abandoned social media pages.  In most cases the over arching brand of the company is not well represented between these properties, and even worse they come and go.

This creates a huge problem down the road.  Leads are “captured” by these various properties, and placed into a CRM or multiple lead management systems. This capture, and offline follow up mentality implies that once you’ve got the “lead” it’s yours for life.  Back to the tech example; if Instagram generated 300 million users & their contact data, but only 50,000 were uploading/liking photos wouldn’t that drastically change their value? Absolutely.

SOI is not a new concept, and most smart RE pros know that SOI and referrals are a huge source of business.  The key problem I’m addressing here is that maintaining contact with SOI is not being done by many or at best requires a very manual approach.  This can greatly limit the scale of the business.

What is required to stay top of mind?  For many it’s personal quarterly/monthly follow up (probably the most effective), for others it might be simply maintaining thousands of dollars in branding ad spend.  The real power of a well put together web presence, and subscriber base is that you can maintain contact with a much larger group of people with fewer resources.  The transfer of this subscriber base, and the properties involved is also much easier.  This makes your business more valuable, and enables us to over time distance ourselves to do other things.

This is why when we look at our database we need to start asking a few basic questions…

• Are these people returning to my site?
• How many people were “active” or “engaged” with my brand in the last 30-90 days?
• How the hell am I measuring that?
• What tactics am I using to ensure that people stay engaged before, during, and after a transaction?
• If I called these people up would they answer? Would they remember my brand?
• What type of effort do I want myself, my agents, and my team putting into certain types of users?

Quick Start

Here are a few tips to get started answering those questions…

1. Take inventory of your subscriptions: We know how many leads our sources are generating, but what % of those people are staying engaged? Investigate what channels work best for keeping people in orbit when they clearly state they aren’t ready.

2. Define Your User Base:   Engaged or active users can be defined in a variety of different ways to suit a variety of purposes.  Consider these three user types.

• Active Client
• Past Client
• Qualified
• Unqualified

Decide for yourself what a reasonable expectation for engagement for this user type might be.  Obviously our past clients won’t be onsite every 2 days, and the active shoppers might engage on a daily basis.  The goal here is to prevent cases of drop off.  If a lead registers on our site, and never comes back or is unresponsive it’s likely that we’re not doing a good job on getting them subscribed.

3. Merge your subscriptions together: Your MLS powered site might generate tons of leads, Youtube is a great outlet to generate content, and lots of people use Facebook soooooo…. Upload your cold leads into Facebook, and share your Youtube videos with them in a custom Facebook audience. There are far more ways to communicate with your database than call, text, and email.

TL;DR

• The value of a web property is largely based on the number of people engaged, and the level of that engagement.
• The value of a real estate database is also largely based on the number of returning, referring, and contactable clients.
• Highly engaged users have a greater lifetime value than those who are not.
• Real Estate teams are over focusing on generating new prospects, and letting old ones fade away.  This hurts their business in the long term.
• I’ll be revisiting this topic often.  It’s important.

There are a few books that have shaped my understanding of the world, and this is one of them. If you don’t own a copy. Buy one.

Time is an incredibly valuable resource.  Creating more of it is what most teams, and brokerages that are looking to expand are trying to do.  This is what brings most to implementing various forms of automation into their growth strategy.  Many who discover the power of automation also eventually stumble into the catastrophe of automated error.

“Difficulties arise when we do not think of people and machines as collaborative systems, but assign whatever tasks can be automated to the machines, and leave the rest to people.” – Don Norman.

Norman also discusses the relationship between people and calculators. The human + calculator is  a perfect combination; allowing us to do more by eliminating common errors and solving the problems we can’t do in our heads.

1. Automated Communication

Many an agent has made an embarrassing blooper when it comes to arranging automated communication.  The most common ones I see…

• Message was sent too many times.
• Message was sent to the wrong people.
• Message was sent at the wrong time.

Our tendency is to let the machines handle the mundane tasks so we humans can solve the most complex ones.  Norman discusses this in his book, and in a nutshell this relationship is sometimes backwards.  In the above common errors what went wrong is not the sending of the message, but the when, who, and why it was sent.  Sending messages is easy, but knowing the who, what, when, etc. is what is complex.

Consider flipping this around in some cases. In a previous post on Smart Prospecting I demonstrated how to use technology to automate the determination of who to prospect, when to prospect, and what to talk to prospects about.  All the human has to do is send the communication or make the call.  This is a relatively simple task, and one that can be done with a reduced amount of error.

What I see being done more often is the total opposite. We setup our long term communication plans to drip our leads for the next year.  This frees us up from having to send hundreds of prospects the same message over and over.  However by using technology that tells us the who/what/when to send, and tools like mass email; we can accomplish the same thing with lower occurrences of error, and better insight into what is happening in our database.  As Norman discusses in his book the errors of automation often go unnoticed until it’s way too late.

“Should I quit using drip plans?” Of course not.  Can you really email a confirmation instantly? Can you truly respond to certain requests at all hours of the day? Nope. This is where automation can be our friend.  Just like the calculator relationship… If long division isn’t your strong suit then use the calculator to do your divisions.  If you can’t be there at the right time consider automation to help you accomplish this.

2. Mass Communications

Second to  automated communications where I see the most errors occur is in mass communication.  What mass communications (such as mass email) automate for us is the task of sending a communication to multiple people.  Sending an email to 10,000 users is a very simple task, but where the complexity occurs is again in the who/what/when, and where to send the communication.

We’ve all had the brain fart of hitting “reply all” before, and what do we exclaim afterwards?

“I didn’t mean to send this to those people or that many people” 

Creating lists of people to receive tailored communications is not an easy task.  Let machines help you do it.  Let them analyze the user activity, let them do the math on numbers of visits, or the amount of time it’s been since the last communication.  When the machine has assisted you in creating the list you desire then it’s usually a simple act of hitting “select all” to ensure that your communication goes out to that list.

Don’t Use Robots To Work For You.  Use Them To Do Your Work Better.

Just so we’re clear… Automated communications are a great tool.  Mass Communication is essential to any modern marketing program.  What agents/brokers need to think about is striving towards that oh so perfect human + calculator relationship.  How can we use technology to assist us in the complex tasks we’re most likely to mess up?  That’s the question we should be asking.  I see many working hard to transfer as much workload as possible to robots, and frankly the end result is bad marketing/sales being distributed with machine like efficiency.  Collecting large amounts of useful data, and letting machines help make sense of it all is what the large real estate businesses of the future are going to master.

If I could pick one metric to fully eliminate from the real estate industry it would be CPL. (Cost per Lead)

This metric has caused thousands to waste millions of dollars, structure their businesses poorly, and waste countless hours of time.  Long before entering the RE industry I worked as an affiliate marketer.  I get paid $X per lead, and my cost is $Y per lead.  The difference was my profit.  I can attest first hand that living, and dying by the magical CPL is a pretty horrible way to live, and run a business. (that’s why I got out of that racket).  Now let’s get into exactly what’s so messed up about this CPL business so we can all join the road to recovery.

1. Your ROI is Ridiculous:

I hate you guys.  As an affiliate marketer I used to spend thousands of dollars per day, and was lucky to make a 25% return on my spend. (usually it was negative %) Today I see brokers spending $500 per month; that’s $16 per day folks, and making ROI’s in the several X,XXX%.  According to the NAR 2015 Member Profile less than 2% of you spent more than $15,000 on marketing last year.  That’s just absurd.  Now I’m not saying you should max out that credit card just yet, but if you’re getting a steady return on an investment with a traffic source like Adwords or Zillow then your focus should not be on reducing CPL.  It should be on spending more!  Yes the law of diminishing returns will come in to play here, but with your average ROI; worrying about going from $8 per lead to $14 is just stupid, and short sighted.

2.  How People Buy Homes .vs. Supply and Demand.

Here’s probably the only 2 things that a real estate professional needs to understand about Search Engine Marketing (SEM).

1. This is how online home shopping works.

• City: Charleston, SC = 1,317 homes for sale
• Area: James Island, SC = 273 homes for sale
• Neighborhood: Bayview Farms = 4 Homes for sale

City –> Areas –> Neighborhoods. This is the cycle every online shopper goes through.  More people start their search at the City or Area level than at the neighborhood level.  Many Agents understand the concept that the person who is more at the neighborhood level is further along in the process, and plausibly more likely to buy.   Again MANY agents understand this, and because traffic is fairly proportional to the number of results an economics 101 situation occurs.

Lots of advertisers + Little searchers = High Cost. 

Google gives zero shits about the cost of the homes being advertised.  “Luxury” keywords do not command a premium because the properties are mansions.  All that matters is that fewer people search Luxury, and lots of realtors advertise luxury so the cost per lead is high.   Over the past few years those of you advertising online have probably noticed an increase in cost per lead.  No Zillow & The Google are not out to get you; it’s just that the market is doing better, and more agents are willing to buy advertising.

3. Comparing Pineapples To Peanuts:

Apples and Oranges doesn’t do it justice for how far fetched I’ve seen agents/brokers compare traffic sources, and lead gen systems. Simply put using the same examples we saw before; If you want to go after luxury only or further along leads then you’ll have to pay.    I see agents debating on where they should be spending money between Zillow, Adwords, and Facebook all day long; when those sources aren’t even on the same planet as each other.

Want the best advice? All of them.  Day one in the real estate biz?  Probably Zillow.  Have a growing team of hungry agents to feed? Probably Adwords.  Have a good mobile presence, and have well sorted system for working online leads? Now add in FB.

What makes this issue so complicated is the varying CPLs. Zillow is way more expensive than adwords, and even more so than facebook..   Throw CPL out the window, and what do you really have?

• Zillow: People inquiring about specific properties.  People under the impression they’ll talk to an agent.
• Search: People are searching for something specific.  This could be a house or just browsing a city.
• Facebook: People were bored at work , and aimlessly looking for something to capture their attention.

Think of it this way, and it’s pretty clear that zillow/search are a solid way to get in touch with active shoppers.  All of them have the potential to feed you tire kickers, but some more than others.   I love FB ads, and it’s a fantastic lead gen source, but I’ve noticed a lot of folks going full tilt on FB for nothing other than lower CPL.  Frankly they don’t have the teams in place to handle that volume of tire kickers.

So to wrap up my little rant…

1. Focus on what your business needs from lead gen not just the costs.
2. There will be competition, CPLs will fluctuate. Don’t base your business model on them.
3. All Leads are not created equal.
4. Your ROI is crazy high.  Focus on selling, prospecting, and team growth and you’ll make a lot of money.

Want to build a database of long term subscribers that can’t wait for your next post? Follow this simple rule.

You Are Discussing The Topic And The Topic Is Not You.

In other words what’s your opinion on the matter?  Search the terms 1st time home buyer guide, and Google yields over 263,000,000 results.  Every single major financial or real estate related online publication or product has written a guide for a 1st time home buyer.  Type in virtually any neighborhood in the USA, and no doubt you’ll find several guides of spun up content written by SEO monkeys.  Consumers are as aware of this as you are.

“But my content is HYPER-LOCAL!” -everybody

Hyper local is not enough. Stuffing your  article with obscure long tails isn’t helping either. These days the only real thing that any local professional has to offer of any differentiation  is the same thing that everyone else has…

Their professional opinion.

Consumers turn on their TV’s and log on to their favorite websites everyday not just to get the raw information, but to get the editorials behind that information.   No local agent is ever going to beat CNBC, FOX, or Zillow when it comes to delivering national numbers, trends, or raw information on homes for sale. What the local agent does carry up their sleeve is the ability to take that information, and translate it into “hyper-local” content.  If home prices are up 4% last month nationwide what are they doing in my neck of the woods?  More importantly is now a good time to sell my property? This is the mindset of the consumer, and while the talking heads on TV may offer the information, what they don’t provide is a channel for the average person to ask “but what about me?”.

If you want to keep subscribers coming back, and build trust in your brand here are just a couple ways to take content that’s been done to death for “SEO” value, and make it stand out.

• What have YOU seen trip up 1st time buyers?
• How have YOU helped saved someone a ton of money with the right loan?
• How have YOU helped a young couple weigh the pro’s and con’s of a new construction?
• What do YOU do to help get the maximum value for a listing?
• What do YOU think the new Taco Bell means for the neighborhood? (Mas Queso?)

Remember the odds are that your client is already going to ask not just one, but several other people “what they think” about a number of decisions that need to be made when buying or selling property. Make sure that you are one of those people by offering your expert opinion in your content.  After all our goal of content creation is not to simply generate traffic or interest, but to build lasting relationships with our subscribers.