Why Are Lead Generating Companies Still In Business?
In the 2005 REALTOR® Technology Efficiency Survey, 62% of the respondents who bought leads said that they were dissatisfied with them. A whopping 6% were satisfied.
If you were running an ice cream shop, how long could you stay in business if 62% of your customers weren’t satisfied?
Not very long.
I often hear grumblings from REALTORS® about how these companies are “stealing” their prospects and then selling them back to them for a profit.
That may or may not be, but I can bet you the lead companies would stop if no one was buying. But they are buying.
New agents sign-up, experienced agents give it one more shot. People keep buying the leads, even though they stink.
Sure, some real estate pros swear by their lead generation company. And that’s fine. I am a big fan of doing what works.
But I know that it is not working for the vast majority of real estate professionals out there – at least it’s not working as well as they would like, and that is really what matters.
I just got done reading the recent book by Robert Ringer, Action!: Nothing Happens Until Something Moves, in which he tells a story about a group of wise sages that are given the task of summing up the wisdom of the world in one sentence.
You know what the sentence they came up with is?
There is no free lunch.
My guess is that, although most people are fairly realistic, they still believe in getting something for nothing, or in getting a lot for a very little. It’s just human nature – it’s hardwired into most of us, me included.
So here’s my recommendation for a better real estate business:
Instead of buying leads, fix the real problem: your marketing. Then you can create your own leads.
Your marketing system should be setup in a way that consistently draws your target market to you. There is a lot of strength in not having to chase after prospects (or leads).
When your own marketing system generates a lead, that person is expressing interest in a business relationship with you, a unique person.
When you buy a lead, you are essentially purchasing a chance (kind of like a lottery ticket) for possible business from someone who does not know you, like you or even know you exist. That’s not a good way to begin.
Would you purchase a ticket to see a Broadway show if it were just a chance to see the show? You might get in, you might not. I know I wouldn’t.
When you buy leads, you are making an investment before you have any idea of the return.
You are basically gambling with your money.
Then you have to invest time and money to build the relationship – that’s backwards and very expensive and very wasteful.
When you invest in building your marketing system, you are doing leveraged work (work that only has to be done once) that will attract the people who already want to do business with you. Half the battle will be over before they even contact you.
What it really comes down to is that you can’t buy a relationship.
If you are buying leads, it most likely means that your marketing system isn’t quite setup as well as it could be so that business is attracted to you in an automated, consistent way.
The good news is that marketing systems can be fixed and they can be fixed quickly.
So stop buying leads and start concentrating on creating your own flow of people wanting to do business with you.
