How many leads have you generated from your real estate business since you started that have never closed? You probably don’t know the answer, but I bet there are quite a few.
Most real estate agents focus on leads that are easy to close – prospects who want to buy or sell their home now. But what about those prospects who weren’t quite ready yet. Have you followed up with them recently?
Do you have a follow up system in place to convert some of those prospects into clients eventually? Or do you automatically assume those leads are dead and you forgot about them?
What Does A Lead Cost You?
Let’s take a hypothetical example.
- You send 1000 postcards
- It costs you $400 to mail them
- You get a 1% response, or 10 calls.
- That’s $40 per lead ($400/10)
Now let’s look at the return on investment.
- Let’s say your take-home commission is $2500 on sales
- You close 20% of the calls (2 sales)
- You make $5000 less the $400 for postcards = $4600
I know this isn’t exact math. If you are selling a home, you might have additional advertising expenses involved with selling the home – and your commissions might be higher, but go with me here.
$4600 is a good return on investment, but what about those other 8 people that never closed? That’s $320 ($40×8) you’ve spent with no return.
If you mail postcards regularly, how many of your leads don’t close each month? If you take my theoretical example, you’re wasting $3840 ($320×12) each year!
If that sounds discouraging, it shouldn’t be. Understanding your marketing ROI is important when thinking about your lead generation strategy.
Convert More Leads to Closings With Follow Up
Let me ask you – how many times do you follow up with someone before you decide the lead is a “waste of time”? One, two, five?
Maybe you’ve heard that it takes on average 7-12 contacts with prospects before they decide to hire you. If you only follow up with prospects a few times, you are dropping the ball and leaving money on the table – before they are ready to hire an agent.
The good news is that you can still start following up with to the leads you’ve already captured. Maybe their home didn’t sell. Maybe their credit wasn’t good enough to buy a home. Maybe it wasn’t the right time back then.
But maybe now it is!
How to Follow Up With Older Leads
Before you actively start marketing to older leads, you want to find out if they are still considering buying or selling. If you have previously spoken with them, give them a call and find out:
- Did they buy or sell a home (or are they still in the process)?
- If so, ask them how it went and thank them for their time.
- If not, ask them if they are still interested, their time frame for moving, and what they have been waiting for (or what has been preventing them from moving)
Note: for sellers, you can also check the MLS database to see if they listed with an agent, who they listed with, and details about the listing/sale. This can be one way to pre-qualify leads before you make the call.
For leads you haven’t previously spoken to, send another postcard to that smaller prospect list again. If they responded to your initial postcard, they may respond again, so send a personalized postcard offering them a free report or other educational materials.
You can also follow up with your phone leads by sending postcards as well. Be targeted and use any previous information you already know about them such as what they were looking for, what their time frame was, what was holding them back. Tailor your postcard to this specific issue or problem they were having.
The more personalized your message, the better the chances they will respond. Consider adding a personal note such as “I spoke with you 3 months ago about the possibility of listing your home because (whatever reason they mentioned last time you spoke). Were you still interested in moving? If so, feel free to call me at XXX-XXX-XXXX.”
Look back through all the leads you generated in the last 6 months and commit to making at least three phone calls this month to follow up. Make lead follow up an active part of your real estate marketing strategy and you’ll start converting more leads into clients.