How To Avoid Wasting Money When Investing in Online Real Estate Leads with Scott DeRuiter
Can paid online leads be an untapped opportunity in your business?
Over the years, I've seen agents on the complete opposite end of the spectrum when buying leads. Some agents excel at converting the leads and are able to make it a part of their business strategy effectively. Others find cold leads difficult to nurture or don't enjoy the approach and the sales strategies behind it.
At one time in my career, I oversaw online, company-generated brokerage leads and an agent internet-lead team. I've also been part of major paid lead launches and everything from strategies to attract more leads and how to work them through the sales funnel. So, I've been in it with you from a generation, conversion, and even accountability standpoint!
So, the question remains - could online leads work for you, and if they do, how do you not waste money when buying them?
Today's guest, Scott DeRuiter, Director of Sales and Partnerships at Sierra Interactive, brings a thoughtful approach to online leads. Some of my favorite parts of today's conversation have us leaning into leads as a way to grow your sphere, how to get savvy and crunch the numbers, and how to spark relationships in a purposeful way.
Tune in to learn actionable strategies to turn your online leads into an investment that works for you by watching the video, listening to the podcast, or reading the blog below brought to you by The Marketing Suite, your all-in-one solution to real estate marketing.
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Pivoting your mindset with online leads to foster a long-term strategy & grow your sphere
Before you invest in online leads, keep in mind that they shouldn't be the majority of your lead gen. Instead, they should be a part of a balanced approach and long-term strategy.
One way to do this is to approach online leads as an opportunity to grow your sphere (sphere of influence). While there is a cost to acquiring that lead, there's also a lifetime value you can benefit from.
Some agents make the mistake of viewing online leads as one-time transactions, missing out on this potential future value. Instead, it's crucial to implement a nurturing program and be proactive about leveraging these connections to be a source of repeat and referral business.
Knowing your numbers & what to measure with online leads to invest wisely
To find success with online leads, you need to actively measure not only the cost of the lead but also your own conversion stages.
How many leads did you actually make contact with?
If you make contact with them?
How many of those did you schedule an appointment with?
Then from there, how many of those did you actually meet?
Did you get to a showing?
How many of those did you get a buyer brokerage agreement signed with?
Then eventually, how many of those did go under contract, and then you know, close?
So if you're measuring those results along the way, and you have not only your end result, but you have a very good spectrum of what's happening from the time that lead comes in until you do close. It gives you a lot more opportunity to evaluate the conversion and the ultimate success.
Lead Evaluation Equation/Example
If you had 100 leads come in and each lead cost you $100. 100 x 100 = $10,000 you're spending on your leads. And let's just take a 3% conversion rate - that would mean out of 100, that would be three closings. That would mean that each one of those leads cost you $3,333 to acquire. That's your cost of acquiring that sale.
Then, we'd have to look at your sales price. If the average home sold for around $375,000, your total GCI might be around $11,100 (note - this is an example).
Then, you'd have made over $33,000 from that initial spend of $10,000.
So if you can look at a lead source, and convert, say, the 3%, and it gives you that, that 30% cost of sale, or less, then that's worthwhile leads. But if for some reason you were not closing 3%, or the price of the properties were lower, then that math might not work out, and it's not as good as a value. All of this data can help you decide whether to continue purchasing those leads.
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Since 2014, I've experienced the challenges and opportunities in real estate marketing. And that journey inspired me to create The Marketing Suite, an innovative solution for real estate marketing. Inside, agents have exactly what they need to attract more customers, create memorable brands, and foster relationships with their spheres that lead to closings.
Marketing Suite agents get daily social posts, innovative strategies, email marketing, high-end materials, templates, live trainings, a supportive community, and more. Use code JOIN25 for 25% off your first month, and elevate your marketing without stress, overwhelm, and tired tactics!
Meet Today’s Guest, Scott DeRuiter
Scott DeRuiter has nearly 20 years in the real estate industry and has held a variety of leadership positions - including leading sales and business development at tech firms like Realtor.com and Top Producer. During his career, he's also been a team leader and managing broker at Keller Williams, and today he drives growth as the Director of Sales and Partnerships at Sierra Interactive - a website, CMR, and ad management platform.
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