Why Lead Follow-up Is So Important

Real estate agents today are so engrossed in obtaining the "next new lead" they pay enormous amounts of money for cold leads directed to them. It doesn't even matter if those same leads are being directed at 10 other agents, they still pay. Because just maybe this time...

I have seen multiple studies that boil it down to, on average, a closed real estate lead costs about $3-12K. This means that while the cost of any single lead could be closer to $30- $120, an agent might need to go through (spend time on) about 100 leads to get the one to close. And truthfully, we should be less concerned about the $3-12K and more concerned about the 99 people you spent time on that did not use you. THAT is the real loss in buying leads. The time wasted.

Realtor.com consistently shows that MOST agents still use the person they know or who was referred to them by someone they know 60-85% of the time, depending on the year and the study. It's clear that the public will use the internet to GET information, yet they consistently USE the agent they KNOW or that is referred to them by someone they know. So why do we go after new leads all the time? Because we don't want to do lead follow-up. That's why. And it's so easy to just do it.

Here are the stats on lead follow-up:

• 48% of salespeople never follow up
• 25% make a second contact and stop
• 12% make three contacts and stop
• Only 10% make more than three attempts, yet…
• 2% of sales are made on first contact; 3% on the second
• 5% on the third contact; ONLY 10% on fourth contact
• Yet a whopping 80% of sales are made on the fifth to twelfth contacts!

You absolutely MUST have a great system to gather leads into and work them every day for at least 12 contacts before giving up. Given that most people start the searching process 6-18 months before they actually buy or list, that needs to be done over time—and you need a lot in the system to meet your goals. This requires a great CRM system. Use it every day (which means you must open it every day). And reap the rewards of a lead system in which people know you, like you, and trust you. You can do this—and not go broke buying leads. Ready to end that money sucking cycle? Great.

To view the original article, visit the Wise Agent blog.