An updated take on how to develop new business leads.
By Donna Shryer
Ask experienced REALTORS® what they think about cold canvassing, whether by phone or front door, and the answer is amazingly consistent. As Larry Kleinheksel, CRS, with Coldwell Banker Woodland Schmidt in Holland, Michigan, puts it, “I don’t do it, but if someone has enough ambition—it would probably work.”
Now ask average citizens how they feel about cold canvassing. Bob Leonard, CRS, with RE/MAX Associates in San Antonio, says that the response is typically beyond neutral; it’s negative. “Stranger danger isn’t just for kids!” Leonard says. “People won’t answer their door when they don’t know who’s ringing the bell. And they rarely answer the phone if they don’t recognize caller ID.”
With potential clients shunning cold canvassing, how does the experienced REALTOR® prospect for new clients? Here are several effective tactics to put your name, company, phone number and website out in front of potential buyers and sellers.
The Future Is in the Past
One of the most effective and cost efficient prospecting tactics for future clients lies in past clients. According to the National Association of REALTORS® 2015 Profile of Home Buyers and Sellers, 88 percent of buyers would use the same agent again for their next transaction or recommend their agent to others. Scott Wendl, CRS, with RE/MAX Real Estate Group in Des Moines, Iowa, suggests that a “little extra effort” can grow this stat. “At least 94 percent of my business is returning past clients and referrals from past clients.”
In addition, this solid-gold resource brings financial benefits, explains Brian Ladd, CRS, with Ladd Group, Cascade Sotheby’s International Realty, in Bend, Oregon. “The cost to acquire a new listing is exorbitant,” says Ladd. “I spend about $40 per lead, which encompasses my hard-cost based on my online spend with Zillow, Trulia, Google PPC advertising, etc. With 2 percent conversion on $40 per lead, it costs about $2,000 in client acquisition. So you can see, I can’t afford to work with someone just once. I make money when past buyers become sellers or send me referrals.”
The key to maximizing referrals and return business from past clients comes down to constant contact. “The whole point of prospecting is to have your name and phone number in front of people when they’re ready to pull the trigger—whether buying, selling or recommending. You can’t be a secret agent,” Leonard says.
Direct mail is a favored way to stay in touch, although Ladd stresses that you’re reaching out to busy people leading busy lives, so you need that postcard or flyer to not only reinforce your name, but also offer something of value — an incentive to read on. “This takes time and usually a financial investment, but the ROI can be big.”
Kleinheksel, whose mailing list is 1,200-strong, sends past clients a newsletter and an email or two each month: “I write everything myself so I can make sure there’s something of value for my market. I might write about my new listings in the neighborhood, current interest rates, a great Internet app and things happening in town that I think people want to know about.”
Email is another way to stay in touch with past clients. Since the email itself is free, Wendl invests in email attachments. Once a month, his email arrives with a coupon for a local restaurant or service. The coupon, generated by Referral Squirrel, arrives with encouraging words asking for a referral and Wendl’s contact information prominently displayed. He also routinely emails a one-minute video, in which he chats up his market’s real estate news and personally thanks past clients for referrals.
Client appreciation events are another way to keep your name front and center with past clients. Wendl recently rented a movie theater and invited past clients for appetizers, a few drinks and a movie. “Right before the movie started, I took the microphone, with my contact information on the big screen behind me, and offered an extra drink ticket to the first 10 guests who texted me a referral. I ended up grossing about $20,000 in commission off that night’s referrals—giving me a 400 percent return on my investment.”
Social Studies
To be or not to be on Facebook: that is the question. And the answer is typically, sure, but don’t do it to score a sale or listing. Do it to send buyers and sellers to your website, where you can present yourself properly and professionally.
“Social networks are an essential part of the business. I post something almost every day, and try to keep everything I post as something of value to my clients,” explains Brian Ladd, CRS, with Ladd Group, Cascade Sotheby’s International Realty, in Bend, Oregon. “However, I do not see it as a way to capture the clients. I always redirect every post to my website, which ultimately has the lead-capture tools I need to engage and convert that buyer. Facebook alone won’t do it.”
Click with New Clients
In today’s Internet-driven world, a user-friendly, professionally designed, content-rich and up-to-date website is typically seen as a vital prospecting tool. Supporting this opinion, the National Association of REALTORS® 2015 Profile of Home Buyers and Sellers reports that 42 percent of recent buyers begin their buying process online and 9 of 10 buyers used the Internet at some point while looking for a home.
With these stats in mind, Ladd directs every communication back to his website. “When I post a Facebook video of a property or send an email, it says ‘for more information click here,’ which goes to my website. And when I hold a neighborhood event, I have them RSVP on my site. Everything always points back to my website as a name capture tool. Once I capture their information, we move into traditional prospecting.”
The website’s status is VIP, but the jury is still out as to whether site visitors should be required to register before clicking through your listings.
On the one hand, Ladd feels that registration is imperative: “A buyer comes to my site for a best-in-class website experience and up-to-date information. That takes time and financial investment on my part. All I ask in return is the visitor’s contact information. If a potential lead isn’t willing to register, then they’re not willing to engage. So I’m going to lose them anyway.”
On the other hand, Leonard feels that site registration is a roadblock. “I do everything possible to drive leads to my website — because I know potential buyers are going online to research, and I want them to go to my website. But many people think registering triggers email solicitation, so to avoid that, they skip registering and go to another site.”
If you’re not sure where you stand on registration, consider asking your site developer to set up a test and see if you gather more leads with or without registration.
Group Dynamics
Prospecting through groups created for the purpose of networking gets a strong thumbs up from many REALTORS®, including Wendl, who explains, “I belong to two networking groups, and I’ve made thousands and thousands of dollars off referrals from these groups.”
As for prospecting through social groups, “Don’t do it,” Leonard stresses. “Long term, you’ll probably get some business, but don’t join for that reason. Talking business is out of place in a social club and might actually cost you a lead in the end.”
Open and Shut Case
“I think if someone does a great job of holding open houses, they could make a very good living,” Kleinheksel explains. The catch, he adds, is that doing it well means prospecting for sellers rather than buyers. “When someone comes to view an open house, ask right away if they have a house to sell, and if so, do they need to sell their home in order to buy a new home. A lot of times the answers are ‘yes’ and ‘yes.’ That’s when I ask if they want me to come over next week and discuss listing their home. Again, the answer is almost always ‘yes.’ And once I get in front of them in their own home, I’ve got the listing.”
Go Full Circle
Whether prospecting for referrals, past clients, registered website visitors or network group contacts, the response to any and every inquiry has to be fast—faster than fast for referrals,” Wendl emphasizes. “A slow response lets down two people: the person who referred you and the referral. If you want to keep that referral circle going, you have to make sure everyone is happy.”
To sweeten the referral circle, Wendl sends a basket of cookies to past clients who recommend him. “I try to send the basket to the past client’s office. It’s another way to put my name in front of an audience—and a captive audience, because everyone likes cookies!”
Learn more about prospecting in NAR’s Field Guide to Farming and Prospecting, available at Realtor.org.
