Mortgage & Real Estate Leads: Rent or Buy?
Leads. We all need them for our day to day business operations. Leads are the fuel, the electricity that keeps Real Estate and Mortgage companies running. But unlike the Sun, leads are not an unlimited resource.
Leads are a limited resource
Unlike other limited resources, burning them does not affect climate change – and that’s a good thing, because the industry standard has been to buy, burn and repeat. This is called renting leads.
Those of you in the Mortgage or Real Estate industry ought to have a strong appreciation for the high value of investing rather than renting. Buying creates long term wealth and renting is costly.
We don’t rent leads – and you shouldn’t either. Like you, we build databases from a wide variety of places, functions and systems.
For example, Revaluate generates leads by speaking on stage and exhibiting at trade shows, such as NAR and the Digital Mortgage Expo this fall. We are constantly writing blog content (like this right here – how Meta!), creating videos, emailing, publishing on social and advertising to visitors to that content. All of this has a hefty time and dollar price tag – but we own the data. It’s a long term investment.
Renting leads is a bad habit
So why then do so many LO’s and Realtors frivolously burn leads? It’s pretty basic, really. Like a slot machine, renting leads is attractive, addictive and mindlessly easy. Put money in, get some back.
Lead rental is very common.
Lead renters spend money each month to buy new leads. Leads are purchased and called. Perhaps it’s a good lead – yay, you get a meeting! Sadly, for the rest – these leads typically receive a call or two and are left for dead.
Sadly, the reality is far worse than that. Zillow has long been reporting that 50% of their leads report never being called back – so most do not get multiple calls. Those leads are burned even before being used.
There are only a limited number of people in the United States / Your State / Your City / Your Farm. For the most part, that number of people increases (or decreases) by a very small percentage each year (less than 2% of the population moves out of their zip code each year). So essentially, you have a captive audience. This is your total pool of prospects.
The average US family moves every 7 years and thus 50% of people move in less time. If you’ve been in the business for more than a few years and are renting leads – chances are you’ve paid for the same lead more than once!
Your goal ought to be to manage & monitor the entire supply of leads for your territory.
According to the Census Bureau, about 11% of your territory moved last year and about 11% will move next year. Territory focused database lead generation is a self-sustaining model.
Stop Renting, Start Investing
- SAVE: Each email address you receive ought to be saved to your territory database ( spreadsheet / CRM)
- SCRUB: Scrub, Dedup & Detox your database for bad emails: email@example.com, Bob@remax.com and #^%$You@Gmail.com are not leads and ought to be removed.
- (Revaluate does this detox service for every client)
- NURTURE: Create and share relevant, topical and engaging content
- MONITOR: Follow them on social and keep in contact with them personally in order to know when they may be likely to move.
- Revaluate monitors millions of contacts each month and our system determines who you ought to call with a 19.5% accuracy.
- ENGAGE: When a prospect becomes likely to move (a likely mover lead) reach out to them personally.
Do you want to invest in your database and build your territory? Revaluate can help.
Lead Rental Cost Calculator
If you’ve been in the business for years – look at all the leads you’ve generated. Gather them into a spreadsheet, a CRM or a file. This is your future.
Monitor and nurture the whole garden of leads you’ve planted. How do you measure lead efficiency? Look at your Rental LPM (Leads Per Month) as a good start.
In order to calculate the total Rental LPM, You need three pieces of data:
-User Base: Determine the number of people you are measuring. This could be You, Your Team, Your Office, Your Company
-Quantity: Estimate the number of leads generated (distributed) to each in the User base
-Price: Cost per lead estimation
Leads x User base = Total Leads Per Month
Price Per Lead x Total Leads Per Month = Total Monthly Lead Rental Cost
Office Example (LO’s or Realtors)
15 Sales people
$65 / lead
15 x 20 = 300 leads
300 x $65 = $19,500
The example office is spending $19,500/mo to rent leads. This price will only go up over time. It’s ONLY a good long term investment if those leads are placed into a database and REUSED. This is how to leverage huge ROI out of your lead rental fee. Once it’s in your database, leverage your database to increase your bottom line.
Stop devoting all your resources to renting leads. Invest in your future and build your territory / database. Set an appointment to learn how Revaluate can help you shift from renting leads to growing your business with a sustainable territory.