Your Lead Gen P and L is unhealthy, and I think I know why!
Crafting a strategic and profitable approach to lead management in the real estate industry is akin to adopting a balanced and nutritious diet after the realization that overindulgence can lead to an unhealthy state. It's not about foregoing the pursuit of new leads; rather, it's about embracing a more discerning and efficient methodology that nurtures the entire lifecycle of the lead, much like a balanced diet supports every aspect of physical health.
Current Spending Habits: A Glance at the Numbers
As we pour over the industry's fiscal fitness, it's evident we've been feasting on leads:
A substantial 76% of industry professionals are spending upwards of $50 monthly.
The average cost per lead is $66, nibbling away at marketing budgets.
About half of the industry budgets $250 monthly for leads.
The projected online lead spend for 2023 was an eye-watering $27 billion.
Consider Follow Boss's case, where their CRM subscription added over 87 million leads in 2023 with less than a 10% market share. It's an extravagant display of our insatiable appetite for purchasing new leads.
Experiencing Indigestion: The Symptoms of Overindulgence
Our overeating of leads is now causing discomfort and inefficiency:
A Bloated Sales Funnel: It's hard to move efficiently when you're weighed down. PPC leads, requiring 12 to 24 months and even longer to convert, create a sluggish funnel reminiscent of a slow digestive tract. The longer you have been generating leads, the larger the glut of middle-of-the-sales funnel leads.
A Sluggish Sales Team: Much like a body low on energy, a sales team inundated with too many leads can suffer from low morale and poor engagement quality. Also, continually adding shiny new leads distracts from the focus of nurturing leads already in your ecosystem and digestion tract.
Inefficient Marketing: Overspending on lead acquisition is akin to a diet of fast food—it might feel good in the moment, but it's not sustainable or effective in the long run. As your lead spend budget increases and your sales funnel grows, your remarketing saturation decreases as well, adding to the glut.
The Root of the Problem: An Unhealthy Lead Diet
The business equivalent of eating too much junk food—piling on lead after lead without strategic thought—is bloating our systems and blurring our focus.
Crafting a Nutritious Lead Management Plan
Here's how to trim the fat and get your lead management into shape:
Refine Your Sales Funnel: Much like cutting out sugar, focus on high-quality leads in the middle of your sales funnel. It's time to outgrow the boastful '100,000 leads!' mindset, which is as unhealthy as bragging about overeating. New PPC leads can take 18 to 24 months to convert, our so why not shorten your ROI with a focus on your current leads? Consider reducing your new lead spend temporarily as you focus on moving your current leads through the next stages and milestones.
Energize Your Sales Team: Like a good workout routine, direct your team's efforts towards nurturing existing leads, encouraging a healthier, more active approach to conversion. Focus the attention and energy away from the onslaught of new lead reach outs, like the “40 touches in 10 days,” but more on your leads that are midway through their journey with a more consistent approach to “help shed those extra pounds a little at a time. New leads will just start on Day 1 of that 24-month cycle time. Why not jump ahead to the leads already in the reachouts sales funnel to shorten your ROI?
Streamline Your Marketing Efforts: A marketing strategy should be like a balanced meal—nutritious and fulfilling. Cut out the wasteful spending on older leads and focus on targeted, strategic efforts. Remarketing is a great sales tool, but Meta has some distinct limitations that make you feel the same as eating that seventh cookie. Remarketing allows you to select audiences and not individuals, which will drive up your budget as you attempt to cover all your leads.
A Closer Look at Implementing a Balanced Approach
Adopting a balanced lead management approach involves detailed strategies and actions, much like following a complex recipe for a wholesome meal.
Sales Funnel Adjustments: Align your sales funnel for shorter ROIs and reduce new leads temporarily. Many current leads and new leads are searching on other portals. The average real estate lead is signed up with over 5 online lead portals, and all lead aggregators hope you go wide instead of deep. Take Zillow, for example. The bulk of their revenue is based on newly generated leads only, which allows them to sell, resell, and resell more of the same leads over and over. Also, some PPC lead aggregators, such as Ylopo, will capture the same PPC lead but keep it assigned to different subscriptions. In some cases, the same PPC can show up in multiple accounts as long as the same leads complete the online form. Consider scaling back or temporarily turning off new leads to focus on your current leads that may have already connected with, seen your branding, or one that you have built awareness with. This will ensure your funnel digests leads at the right pace, avoiding congestion.
Reinvigorating the Sales Team: Like maintaining a steady metabolism, balance your team's workload to prevent burnout. Recognize and reward their success to keep their energy levels high. Get your sales team focused on active leads in your pipeline at all stages and journeys instead of the mega-blitz action plan of brand-new leads. Build your action plans, outreach, and communication for the long term instead of hoping to just capture the new, early-stage leads. Your team has a finite level of bandwidth and outreach, so maximizing it will have multiple benefits.
Marketing Dietary Plan: Create a marketing mix rich in valuable content and engage in targeted advertising. Social media engagement is your hydration—essential and sustaining. The inherent flaw with Meta (perhaps intentional design) is the difficulty in removing individuals from your remarketing audience. You should consider 2 strategies: swapping and segmenting audiences. Start with segmenting: consider the stage for leads in your pipeline and 3 to 4 key segments such as milestones, lead age, area, previously contacted, or uncontacted.
This step should be somewhat simple when using your CRM’s tags, milestones, and filters. Build action plans within action plans that focus on smaller segments with clearer messages. Also, swap out your audiences every 6 or 12 months. Get rid of the old audiences and build new ones, as this will remove the long-term renters, moved-out-of-state leads, and non-responsive leads, which will drop your remarketing budget.
The Benefits of a Well-Balanced Lead Diet
By implementing a more strategic and moderated approach to lead generation, akin to adopting a healthier diet, real estate professionals can enjoy a business that is not only thriving but is also sustainable and fit for the long run. This healthy balance in your lead diet will ensure that your real estate practice is well-nourished, resulting in satisfied clients and a more robust bottom line. Resist those shiny object new leads for the one already in your ecosystem that may already know you. The goal is to digest leads efficiently and effectively, extracting the most value from each one, just as our bodies extract nutrients from wholesome food.