According to a report by the National Association of Realtors, real estate agents are spending their marketing dollars in the wrong places.
The survey found that search engines, newspaper ads, Yellow Pages and magazine advertising accounted for less than 1% each of all closed seller leads. Mobile or tablet applications, direct mail pieces (newsletters, fliers, postcards), and “advertising specialty (calendars, magnets, etc.)” all accounted for less than 1% of the closed seller leads the survey also reported.
Where do sellers find their listing agent?
From out of the blue
3% from floor duty
4% from the internet
4% from a yard sign
4% from an open house
4% from a referral company
From a trusted source
3% from a relocation company
4% from a referral from real estate broker or agent
25% repeat business
39% from a friend, neighbour or relative
Where do buyers find their agent?
The results for buyers was about the same:
From out it the blue
9% from the internet
6% from open house
6% from a yard sign
3% from floor duty
From a trusted source
42% from agent’s sphere of influence
12% repeat business
4% referred from agent or broker
4% referred from a relocation company
The brokerage is only 10% important
You may notice that through the brokerage isn’t mentioned in the survey above. If I want to be generous, (an I do) floor duty and real estate industry referrals can be categorized under broker lead leads. That is about 10%.
What we’ve learned
1) Agents waste their money advertising. It is the old school model. It’s passive. It’s easy. And, it is encouraged by advertisers and brokerages.
2) Real estate is a trust business. People trust people. They don’t particularly care about or trust brands, brokerages and franchises.
Last year I received one referral from an agent in Hamilton. He found me online.
I got one referral from a relocation company. She found me online. I got a referral from a mortgage broker.
We made one sale as a result of an open house. A broker told me a few years ago that ten open houses would average out to one closed deal. I tried that year (2010) to do 70 open houses (six per month). I did more than 50 open houses and they lead to four closed deals. Not bad. I’ve noticed now, four years later that the majority of open house visitors are already working with a realtor. Personally, I think that is great. I’m happy they are approaching their next real estate transaction intelligently.
I stopped doing floor duty many years ago. I only received calls from suspicious cranks, weirdos and people wanting to know what their neighbours’ houses sold for. I had one walk in. But that didn’t result in a sale. Interestingly, there is an agent in our office from Vancouver Island. She told me that walk in business was a huge part of her business in BC. She did a lot of floor duty when she first joined our brokerage, and then she gave it up.
At Royal LePage, agents have QR codes and text messaging numbers on yard signs. Agents also have name riders and phone numbers. No one has ever called me, well maybe once or twice, but sign calls have never lead to a sale. Two people in two years used the text messaging gimmick. I think this sort of thing worked way back when real estate agents were the gatekeepers to listing information. Now we have the internet and most people know how to use it.
I’ve helped friends and acquaintances and other “sphere of influence” referrals buy and sell real estate. That is a fairly large part of my business. People do business with people they know, like and trust.
The internet is the largest source of my business. I figure that 80% of my business comes to me online. Years ago, when I was leaving the newspaper business and the business of advertising, I thought, “the internet is the future”. I decided to blog my way to success. It was an open road then and it is a wide and open road now. Most agents have a website that they ignore. Their websites are mostly like a long forgotten online brochure.
I think of all the agents spending all that money on newspaper and magazine advertising, postcards and flyers, bus benches and bus wraps, car wraps, key chains, calendars, pens, promotional whatnots, closing gifts… I think of all that money down the drain. All that money adding up to more than one sale is worth.
If you’re looking for a Realtor to list your home, please call or email. I’ll help you straight up without all the pomp and circumstance, without the shock and awe. It doesn’t have to be difficult.