White Paper Part VIII - Conclusion

Predictive Modeling

We’ve noted that the most important factor to increasing response is publishing better listing content. The most important factor in increasing conversion of inquiries into leads and sales is simply the quality, relevance and timelines of the response. The last piece of the lead generation/conversion story is a focus on generating deeper pipelines.

Let me explain.

Not all leads are created equal. Many generated directly from listings tend to be of hot prospects active in the home search process. Many others are of consumers who are further out in the home buying cycle. A study conducted by HouseValues, Inc. in 2005 indicates that the average consumer spends up to 16 months in the home search cycle. Leads created that are further out in the cycle represent future business for the brokerage, but if they are handled correctly. Brokerages that pay attention to these leads can create long term sales pipelines that before long turn into a regular stream of mature opportunities to route on to their sales force.

Reaching further upstream to consumers early in the home search process can also establish the brokerage as the go to source for research information, a reputation that can boost the company’s position and competitiveness in its market.

The lead incubation process begins with a solid lead capture solution. Your software needs to be able to establish lead criteria such as first visit, last visit, location, home search areas, home search price ranges, repeat view patterns, contact information, financial qualification information, contact history notes and other relevant website or portal activity. This information is extremely valuable in pursuing and communicating with those leads.

Typical lead incubation systems on the market today allow real estate companies to place leads into automated drip marketing systems. Leading solutions however have the ability to operate different campaigns based on a trigger system that places the lead on a relevant drip campaign based on the prospect’s activity on the site. Some of those systems may also allow brokerages to develop their own company specific drip campaigns. A state of the art system such as Point2 goes one more step. It identifies prospects that have been on a drip campaign and have now matured (i.e. they have turned into a hot prospect), as their home search activity increases or specific request for contact or information is registered. Hot prospects are then marked, and notification is sent to the brokerage or agent indicating contact must be made.A state of the art system such as Point2 goes one more step. It identifies prospects that have been on a drip campaign and have now matured (i.e. they have turned into a hot prospect), as their home search activity increases or specific request for contact or information is registered. Hot prospects are then marked, and notification is sent to the brokerage or agent indicating contact must be made.

Future lead management and incubation capabilities under development today will focus on predictive modeling. While current drip systems tend to provide home search notification and static drip campaigns, predictive modeling will take lead profile information and send ultra relevant static and dynamic content to the lead. The goal is to make the brokerage the source of research information right up until the lead is ready to engage a real estate agent to help narrow or close their home search.

Conclusion

With the vast majority of consumers using the Internet in their home search, brokerages need to advertise their inventory in as many ways possible to maximize exposure and leads. Today, this includes focusing on both natural and vertical search marketing. Listings are the most valuable marketing assets brokerages and their agents possess. Better listings (rich data) generates more buyer leads, which increases the chance a company’s listing is sold in-house. The most important step in converting those inquiries is to focus on responding immediately. Because agents are mobile and not sitting at their desk all the time, lead notification needs to become mobile, with text messaging.

Brokerages that focus on developing longer term lead pipelines will maximize the total number and percentage of leads that will eventually transact with someone within their organization.

These strategies are not simply nice to have. They are essential for the survival of traditional brokerage business model during this time of rapid change. Real estate companies that do not develop a complete online marketing and operating strategy will risk losing market share and will squander the opportunity to lead, as new waves of innovation enable better, more efficient and more cost effective marketing and lead conversion strategies.

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White Paper Part VII - Responsiveness

The verdict has been out on this one for a while. The fastest Realtor® to respond to an inquiry, whether it came by e-mail or through the phone, is likely to win the business.

Consumers rate responsiveness as the most important factor in choosing an agent, ahead of qualification, knowledge or commission, according to a CAR (California Association of Realtors) survey published in 2005. Yet, independent industry research published that same year suggests 45 percent of all online inquiries still went unanswered!

Considering that 45 percent of consumers also said they expect agents to get back to them within 30 minutes, there is significant room for brokerages to take advantage of the statistics.

For one, agents are on the road a lot of the time. It’s just part of the business. Many don’t get to their e-mail until the end of the day. Others don’t read their e-mail except once or twice a week. By then, the lead would be long gone. While the computer is a great tool at the office, your team must be able to connect with serious leads as quickly as possible.

While e-mail is not always accessible, unless your agents all carry a Blackberry, they do all carry cell phones. By routing online leads to your agent mobile phones, responsiveness is dramatically increased. And revenue growth follows.

Text messaging works best. It is non intrusive and keeps the agents in control of when and how they respond. They may be with a client at that particular moment, or they may prefer, depending on the opportunity, to respond either by text, e-mail or via telephone. A regular phone call or voice message does not offer the same flexibility.

There are a number of proven wireless lead routing systems on the market today. Considering the importance of responsiveness in the real estate business, the benefits of adopting this technology sooner than later are obvious. What it takes to win is to get to a lead first, and lead routing is an easy way to make this happen. While some brokerages have formal lead response and routing teams, others send inquiries directly to agents, but regardless of the model, brokerages need to ensure inquiries are responded to quickly and, preferably, immediately.

Lastly, brokerages need to recognize that inquiries generated from their listings originate from more sources than just their own website. Vertical search sites and classified websites that listings are syndicated to need to be integrated into their system, to enable text message notification for inquiries, irrespective of the source. This is the only true solution to consolidating the lead management process and optimizing conversion from all the diverse online advertising efforts.

Advanced systems such as the Point2 platform have been able to achieve integration with a number of syndication advertising partners and deliver leads right to the Realtor® cell phones. The initial inquiry is not only sent through email and SMS (text messaging), but the lead information is also added to the Point2 lead capture and profiling part of the platform, for long term incubation and follow through.

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White Paper Part VI

Rich Data

There are a number of appropriate places in this paper to start the discussion on rich data. It drives exposure, lead generation, increases conversion and, better results for home sellers. For our purposes, rich data refers to the publishing of detailed, professional listing information.

Search

Rich data is critical for maximizing traffic as a result of online search. The more descriptive a listing is, the better chance someone will find it online, especially when doing long tail searches. That is, when consumers type detailed search queries into search engines. The better a property is described both in the main copy and the document meta content, the better chance the property will be returned in a search engine result set.

Conversion

Rich data also increases the number of inquiries an online listing generates. In 2005, Alex Perellio of Realogy(formerly Cendant), was quoted at a broker conference saying, “Realtors® are being out marketed today by 10 year old kids selling baseball cards on Ebay.” I may be paraphrasing what Mr. Perellio said, but the essence of the remark remains. You can’t maximize the potential of the Internet as a powerful marketing medium by placing a short paragraph and one shoddy photo of a property worth hundreds of thousands or millions of dollars. Yet, the number of such listings, some even without a single photo, on Realtor.com and other real estate search sites is still astounding.

Part of the problem stems from Realtors® using MLS® data for marketing. The MLS® was never designed for marketing.

The MLS® was first established to facilitate cooperation and to ensure compensation between cooperating brokerages. With the emergence and growth of the Internet in the 90s, MLS content became the de facto standard for online listings display. Today still, it is rarely readable by search crawlers, and online listings documents are rarely descriptive enough to make any significant contribution. Further, the content is insufficient to effectively market properties as ‘homes’ and expect to maximize consumer inquiries and response for the listing Realtor®.

Internal research conducted by Point2 in September of 2006 shows a dramatic increase in page views detailed listings generated and the number of inquiries they yield.

Over 110,000 listings in the Point2 database were examined over a 30 day time frame. The listings were broken down by the number of photos per listing. The results were dramatically consistent. As the number of photos provided for the listing increased, the number of times that listing was viewed also increased, as did the number of leads generated from that listing.

Recent research conducted by LiveDeal.com reinforces the findings generated in the Point2 study. LiveDeal, a consumer real estate search site noticed the listing feeds from Point2 contained far more photos than other feeds. Upon further analysis, Point2 member listings were found to generate almost 300 percent more leads on LiveDeal.com than listings provided by other feed partners.

The message is clear. To maximize Internet leads, Realtors® must start adding a lot of information and photos to their listings.
Accessibility

A highly effective approach to generating sales leads is to provide detailed listing information and useful tools website visitors can access without registration. Consumers today want to remain anonymous, until they are ready to make personal contact with the Realtor®. Once they’ve identified your site as a valuable and helpful destination, they’ll become more receptive to providing personal information. Free home valuations, or unique neighborhood information and statistics can be of interest to thousands of prospects in your area. That’s the value add. Consumers appreciate it, and it works.

Independent market research identifies the top reasons why consumers go to real estate sites. Armed with this knowledge, brokers and agents can easily position themselves to win in their markets.

According to the National Association of Realtors® 2005 Profile of Home Buyers and Sellers report, 95 percent of visitors to real estate websites go there to look for listings.

Within listings, 86 percent of consumers said the most valuable content was photos and descriptions.

Independent research also lists photos as the top reason why consumers go to a real estate website, at 89 percent. The second most important reason is property search, which comes in at a close 81 percent. Mapping takes third place at 77 percent, followed by financing and locating an agent, at 31 percent and 26 percent respectively.

Why is it then that Realtors® often fail to leverage such findings on their websites? Why do many listings often feature a single photo, and often none?

Holding back information is a strategy that no longer works. If consumers can’t get the information they need, on your website, they’ll move on. The strategy of placing a registration on a real estate website to gain IDX access is slowly dying. Sure there will still be some business around for you, but you’ll never know of the opportunities you lost. There are simply too many real estate search sites popping up that provide open access to listings, including major franchise portals like RE/MAX.com.

Listings featured on http://www.point2homes.com/, a website that aggregates listings from tens of thousands of real estate agents indicates that more and more Realtors® are investing time to post a number of photos with their listings and offer to the consumer details that go far beyond the basics of square footage, number of bedrooms and bathrooms. Comments contributed by home sellers about their listings have also started to grow in popularity on the site, further reinforcing the fact that consumers today, be it buyers or sellers want to be more informed and more involved.

Over and above direct access to compelling and useful information, do provide access to one or more important tools, in exchange for an e-mail address. It’s non-threatening. It’s also a very important element of the lead conversion process.

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White Paper - Part V

Lead Generation & Conversion

There is universal consensus that exposure is by and large useless if you can’t convert leads to revenue. Today and in the future, methods of lead generation and conversion will have to change for real estate companies to improve the ROI on both online and offline advertising. New online services such as Zillow seek to empower the consumer with more information. Companies that turn themselves into knowledge destinations and leading sources for information will win the consumer over – and their business.

This next section focuses on 3 issues with lead generation and conversion: rich data, responsiveness and predictive modeling.

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White Paper Part IV - Online Branding

Branding

Traditionally, the best source of advertising for a real estate brokerage is the ‘for sale’ yard sign. It brands the agent and the brokerage in the specific neighborhood. Search sites are now providing a new and similar branding opportunity online through the broker’s listings. Sites like Move.com, Trulia and Point2 Homes provide different branding options for displaying listings. In short, the more sites your listings are posted on, and the more sites they are branded on, the stronger your brand will be online. Considering the shear volume of consumers researching real estate online, branding on the Internet should be just as important to brokerages as offline branding.

Unfortunately, few brokerages are taking full advantage of the different ways they can today brand themselves on the Internet. Service providers offering syndication tools should facilitate the different branding options as well.

Effective online branding can be optimized further by enhancing online exposure for the brokerage website as well as its affiliated agent sites.

There are several common brokerage models in as far as agent websites are concerned:

Centralized Model - Some brokerages choose to operate one website and focus all their marketing efforts on it. Agents affiliated with the company are not permitted to have their own websites. Brokerages that provide their agents with a web page, directory, or 3rd level domain name derived from the main brokerage site fall under this category. The main benefits of this model include the brokerage’s ability to protect and control its online branding, control lead generation and management, and effectively manage its responsiveness in the marketplace.

But these benefits come at a price. The major draw back is that the brokerage ends up losing important search engine visibility advantages. A number of well marketed, interlinked websites that connect the brokerage’s main site with all of its affiliate agent sites is easy to set up and maximizes visibility and exposure on search engines. Such a system optimizes search engine rankings for both the broker site as well its agents’, turning the network into a highly competitive online exposure and lead generation engine that delivers significant, incremental benefits to the entire organization.

In-House Service Provider Model - Some franchises and real estate companies offer agent website solutions that are free standing, and typically not directly linked to the brokerage site. The benefits of this model is that the website solution can be a revenue source for the company, provided development and support costs are manageable. The obvious downside is that few companies invest enough into these technologies to keep their agent solutions on the leading edge. They suffer in their visibility, flexibility and lead handling capabilities.

De-Centralized Model - Other brokerages choose to operate a website of their own but give their agents the option to have their own separate website irrespective of whether they use the same service provider or not. This is the more common model, especially for smaller brokerages. Companies like RE/MAX where agents largely operate as independent contractors also use this model. The main draw back from this model, which is a source of pain for many brokerages we have spoken with is that it does not allow the brokerage to control how its brand is represented online.

On the other hand, some of the benefits this approach delivers is more personal marketing freedom for agents, and linkage between sites, which is valuable for enhancing search engine rankings and exposure for everyone involved.

With this approach being the most popular, many brokerages who deploy this model face more challenges over and above controlling the consistency of their branding online, namely:

1) How to maximize online exposure by leveraging website linkage;
2) How to streamline and manage the lead management process between the brokerage and its affiliate agent sites; and,
3) How to ensure the solution remains ahead of the innovation curve to benefit from its technological advantages as well as its value as a recruitment and retention tool

A proven model is to provide agents with a quality template website solution that gives them personal marketing and positioning flexibility, yet reflects the brokerage’s branding accurately and professionally. When distributed to agents, the sites would link to the brokerage site, right out of the box. The benefits are far reaching and go beyond brand control and natural search optimization. Distributing a strong agent solution is also empowering for the brokerage, as it can be a valuable top talent recruitment and retention tool.

An important footnote is in check at this point. Although providing strong template solutions can be a very sound strategy, there are no easy ways around work that must be done in order for it to be effective. Agents cannot all be provided with websites that feature the same canned content. Each agent must customize their site and add unique, timely and relevant content, in order to optimize search engine positioning for the entire organization. An innovative way to help achieve this goal is to provide agents with websites that incorporate blogging functionality.

Where a template solution may have a few canned pages such as an ‘About the Company’ page, home valuation and home search forms, the focus of the sites should be the agent listings, which are all different and, ideally, blog content.

Blogging not only promotes unique content but also benefits the site from the long tail of search (Broad Search terms) and the linking benefits blogs inherently bring to the mix.

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