Early Bird Gets the Lead!

Perhaps you've heard the expression, "The early bird gets the worm."  When it comes to home buyers and generating leads, it couldn't be more true.

MIT recently published a study on lead generation and lead response management that highlighted key implications for the real estate industry. Understanding lead generation and lead response management are essential to growing your real estate business. What good is lead generation without a way to manage and follow through with those leads?

This study carefully examined the differences of two practices: using intuition and experience to generate leads (common in real estate today) or using science to determine how to generate leads.  Before we look into the implications of science over intuition, evaluate your current practice.  What do you rely on to generate leads?  How has it worked so far? 

MIT researchers examined three years of data across six companies that generate and response to web leads, from over fifteen thousand leads and over one hundred thousand call attempts.

The main questions covered in this study was: When should companies call web-generated leads for optimal contact and qualification ratios? In other words, when is a lead hot, and what is the time frame between that and when it goes cold? 

The behavioral study revealed when sales representatives had success around calling web-generated leads.

The MIT research generated (pun intended) several insightful findings.  The highlights of the research, particularly for real estate professionals are the following:

1.) The first hour after a customer contacts you is the BEST time to follow up successfully.

The study states, “The odds of calling to contact a lead decrease by over 10 times in the 1st hour. The odds of calling to qualify a lead decrease by over 6 times in the 1st hour.” (See graph below, compliments of InsideSales.com.)

It is true: the early bird really does get the worm.

The study reports, “The odds of contacting a lead if called in 5 minutes versus 30 minutes drop 100 times. The odds of qualifying a lead if called in 5 minutes versus 30 minutes drop 21 times.”

If you do not answer in less than an hour, you lose your chances.  This is a HUGE shift in thinking for the real estate industry.

Jay Thompson of Thompsons Realty poked fun at the tardiness of agent telephone responses, by ensuring his online customers he will prioritize the call.

"We answer our phones from 8:00am – 7:00pm seven days a week – major holidays excluded. (Unless we’re with a client. But if you leave a message, we WILL return your call ASAP. We don’t buy into the “I only return calls between 4:00 – 5:00″ game that some Realtors play. Your calls are important to you, and to us.)"

2.) The study shows that contacting a lead after 20 hours past their initial inquiry is actually detrimental to you.

The study states” After 20 hours every additional dial your salespeople make actually hurts your ability to make contact to qualify a lead.”

Researchers explained this phenomena asking,

“Do additional call attempts after 20 hours actually turn people off to the point they actually hurt your chances of doing business? Can you warm them up again with different forms of media other than the phone?

We don’t know, but EVERYONE calls leads after 20 hours. Do they know that every additional call actually hurts them? Should you just stop calling after 20 hours? Ideally, if you had enough leads, and could make enough attempts to make contact in 20 hours, yes.

Is this realistic? It probably is not.

But as a general trend this data is EXTREMELY significant to salespeople.”

This means that establishing an alert system when a homebuyer is interested in a property is critical.

3.) Wednesdays and Thursdays are the best days to call a client.

The research found that, “Wednesdaysand Thursdays are the best days to call in order to contact and qualify leads. Thursday is the best day to contact a lead in order to qualify that lead.”

When building a weekly prospecting plan the research suggests you should set aside Wednesdays or Thursdays to do the bulk of that work.

Keep in mind however, that if a lead contacts you on Tuesday, do not wait until Wednesday or Thursday to contact them.  Even if these days are statistically more effective for reaching customers, the overarching rule is that the window of lead generation opportunity closes on the 20^th hour.

Looking at the above research, there are a couple key recommendations relevant to our industry .  It is clear that to maximize on your ability to capture and respond to leads generated is most important in the first hour after an inquiry was made.

What types of technologies/ services can you take advantage of to make the most of this small window of opportunity?  We have several suggestions.

1. Make your Smartphone email compatible and use your Internet to link to your website.
2. Add a text comment here too

Since you can be accessed 24/7 on your cell phone, why not program your phone to alert you when you get an email or a website inquiry?  That way you can respond immediately.

NAR’s The 2010 Smartphone Survey Reportfound that of the most popular uses of the Smartphone for agents and brokers was telephone and email, however users did not seem to indicate that they connected their mobile device to their business website.  (See below chart, compliments of NAR’s 2010 Smartphone Survey Report).

The only way real estate agents will be able to respond to a lead in five minutes or less, is through their mobile device.  

Based on a 2008 study conducted by WAV Group, called “WAV Group Smartphone Satisfaction Survey,” 78% of respondents believe their Smartphone has helped them become more responsive to their clients.  Furthermore, 62% of survey respondents believe that using their Smartphone has increased their real estate business.

A significant number of this study’s respondents did NOT use their Smartphones to receive lead requests. (See results below)

Consider  looking at a lead qualification service such as:

MRIS’ realPING 

1CAVO’s Lead Valuation Model (LVM)

BlueRoof360’s Lead Generation Tools 

Boston Logic Technology’s LiveChat

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