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Last week, our own Diego Sanchez penned a piece on real estate lead-generation overload.
There’s no question the space is crowded. The number of companies attempting to generate leads for real estate agents is growing by the day.
As a follow up to that piece, we thought it would be valuable to talk to various industry players to get their thoughts on just why this space is so darn crowded, and how to wade through the plethora of choices and hype.
First off, we reached out to one of the bigger players in the space – realtor.com. Ben Rubenstein, the company’s chief revenue officer, was CEO and co-founder of startup Opcity before it got acquired by Move (realtor.com’s parent company) for $210 million in August of 2018. Move also owns ListHub, Top Producer and Reesio.
Rubenstein agrees that the lead-gen space “has become incredibly crowded.” But in his view, while companies out there are providing a large number of leads, there are few “quality” leads.
“Companies have found new ways to convince consumers to fill out forms, capture consumer data, and resell this data multiple times from sites where consumers are not actively looking at real estate,” he said. “The number of leads has skyrocketed, yet homes sold have remained constant at approximately 5.5 million homes per year.”
This disconnect has been a big pain point for agents, brokers and consumers, Rubenstein contends.
Naturally, he believes realtor.com has an advantage over other lead-gen companies because its consumer base is actively searching for homes on its site.
“It’s not just about generating leads; it’s about building quality relationships; connecting people and professionals; and giving agents, brokers, and lenders the support and resources they need to succeed, whether that’s through traditional lead-gen products, pay-for-success services, or new innovations on the horizon,” Rubenstein said. “To differentiate yourself in a crowded landscape, you need quality ROI-focused options for a diverse set of customers.”
Meanwhile, I also talked to RET Ventures, a venture capital firm focused on investing in “the next generation of technology leaders.”
Alec Page, vice president of RET Ventures, told HousingWire that he believes that some verticals and sub verticals that are tangentially related to the lead-gen space are more crowded than others. For example, his firm has seen a flurry of new startups focused on virtual touring.
“This is a space where new companies are popping up left and right, and there’s a lot of competition,” he said.
There’s also a lot of players in the CRM and analytics and reputation management spaces, Page maintains.
But when it comes to finding companies building AI chatbots to help handle some of the low-hanging fruit, and pricing and revenue management startups, the choices narrow considerably, he added.
“In our opinion, when it comes to real estate agents, most of the success has been around software that gives the renter or buyer the most flexibility,” Page told HousingWire. “Each renter or buyer has their own preference and we’ve seen the most success with agents and operators adopting solutions that allow for flexibility.”
Donna Gola, managing broker of RE/MAX Elite in Everett, Wash., told me she gets contacted by lead source companies on a daily basis – via calls, texts and emails.
Some of those are lower costs, she said, but the rest range in cost from as little to $60 a month to as much as over $10,000 a month. Some companies, such as Facebook, charge by the lead.
But regardless of the source, Gola believes leads are only good if you follow up on them immediately and have a good lead conversion system.
In her 26 years as a Realtor, she admits to having tried numerous lead generation programs but prefers those that provide more “niche” leads for specific neighborhoods or listings.
Her tip for other agents? “Don’t keep chasing shiny objects. Find a good system that has a good ROI and stick with it,” Gola told HousingWire. “Whatever the lead source you use, your enthusiasm and ability to communicate and listen to the needs of your customer will determine the level of trust that is built, and your success as a Realtor.”
Peter Murray, a Realtor with Re/Max Plus in Frederick, Md., agrees with Gola that you can have all the leads in the world, but that doesn’t mean anything if an agent or broker is not able to convert them.
To Murray, lead generation tools are “a necessary evil.”
“It’s very important for a Realtor to have an online presence,” he said. “That’s what drives the whole conversation about lead.”
Like Gola, Murray is skeptical of “shiny objects.”
But at the same time, he agrees lead gen tools are simply “something you can’t not do.”
“There’s a million sources for leads out there,” he told HousingWire. “But you have to focus on the conversion rate. I’m not against lead generation tools, but I don’t think they should be a main component of a Realtor’s business. You shouldn’t rely on them.”