- Zillow has launched a program that helps advertisers send leads to agents at other brokerages in exchange for referral fees.
- The program could make it more appealing for some advertisers to buy Zillow ads for the purpose of selling leads colleagues.
Some real estate agent agents, teams and brokers who advertise on Zillow and Trulia receive more leads than they can handle, potentially resulting in missed opportunities.
Now the listing portal is helping some advertisers ensure those leads are less likely to go to waste.
Zillow Group has launched a referral program that makes it easy for advertisers to farm out leads to other Zillow Group advertisers in exchange for referral fees. It enables advertisers to refer leads to both agents at their own brokerage and agents at outside firms.
“We are actively trying to match up advertisers who are getting more leads than they can personally manage with those who want additional leads and provide a great level of customer service,” said Zillow Group spokeswoman Amanda Woolley in a statement when asked about the program.
An incentive to buy Zillow advertising in outside markets?
In addition to helping advertisers milk surplus leads for cash, the program also appears to offer an easy way for portal advertisers to profit from buying advertising outside their coverage area.
“Basically you’re just leveraging your profile strength and your reputation to generate another revenue stream in other markets without having to really have any physical infrastructure,” one Zillow sales representative told an agent team leader when explaining the program.
Using the referral program would be a way for the agent team leader, who is based in California, to tap Zillow advertising for referral revenue from Hawaii, the sales rep said.
One real estate agent who advertises on Zillow was recently asked by a Zillow sales representative if they would like to receive leads from Oxford, Michigan-based Patrick Jarema in exchange for referral fees.
Jarema, an agent team leader at Century 21 Affiliated, was not recruiting agents, only “looking for someone with experience in online lead conversion to handle the surplus of contacts received” by Jarema from generating leads in South Haven, Michigan, the Zillow sales representative told the agent, who asked not to be named in this article.
South Haven is located on the other side of Michigan from Oxford, suggesting that Jarema is buying Zillow advertising for an area around 200 miles away from where he’s based.
Jarema declined to comment, saying he didn’t want to “discuss the strategic outlay” of his business.
The Zillow sales rep said that if the agent wanted to learn more about Jarema’s referral program they would be contacted by a third-party firm “specializing in agent partnerships.” The agent expressed interest and received an email from a representative of Best Agent Business, a provider of “lead assistance” among other services.
Many of the leads generated by Jarema through online marketing “don’t get worked, either because the agent doesn’t service the area or because they just don’t have the bandwidth to service them,” the agent was told.
[Tweet “.@Zillow launches lead referral program”]
Leads for fees
The agent was asked by the Best Agent Business assistant to sign up for a free account with a customer relationship management system (CRM) used by Jarema’s team if the agent wanted to receive the leads.
Another Best Agent Business assistant told the agent that the agent would pay:
- A 25 percent referral fee (of the agent’s gross commission) if a lead received through program bought a home valued under $150,000
- Or, a 35 percent referral fee if a lead bought a home over $150,000
(Best Agent Business did not respond to an email or voicemail.)
The referral fee made sense because leads “are being warmed up and lightly qualified” by Zillow’s Premier Agent Concierge, the Best Agent Business assistant told the agent. Operators at Premier Agent Concierge’s call center ask leads questions to find out if they are genuine buyers or sellers before connecting them with big advertisers.
Once a Zillow concierge qualifies a lead earmarked for Jarema’s Zillow lead referral network, a Zillow concierge dials a “broadcast” number that will “randomly ring three of Jarema’s referral agents at the same time,” a Best Agent Business assistant told the agent.
Whoever picks up first learns some basic information about the lead and then is live transferred to that lead for a phone call. The lead is also then assigned to the agent through Jarema’s CRM.
The agent is mulling the offer but is reluctant to pay a 35 percent referral fee for sales over $150,000.
And the agent also has other misgivings.
“I understand what they’re doing, and I can appreciate it,” the agent said. “But it pisses me off.”
That’s because Zillow Group’s lead referral program might make it more appealing for advertisers that don’t directly service an agent’s market to buy advertising covering the agent’s home turf, snag some leads that might otherwise have gone to that agent and then flip those leads, the agent said.
Indeed, while Zillow Group’s referral program may supply a profitable release valve to advertisers who accumulate more leads than they can handle, it could also theoretically encourage some to buy advertising for the exclusive purpose of selling leads to other agents.
One Zillow rep told a team leader to think of the referral program as a way to function like Movoto, a popular real estate search site that sends many leads to partner agents in exchange for referral fees.
“Movoto has more market reach than most agents could ever achieve,” the sales rep told the team leader. “They generate leads, distribute them, take a portion of commission. You’re just doing it on a local scale.”
Seen in another light, the referral program can help Zillow Group advertisers build “expansion teams” centered around Zillow leads.
Whether they work at a team leader’s brokerage or at another firm, agents located in markets outside where a team doesn’t have a physical presence could plug into the team’s CRM and get Zillow leads from the team in exchange for referral fees.
Lead-routing and referral-tracking features recently added to Zillow’s customer relationship management (CRM) system could further facilitate this expansion team model.
When previously explaining to Inman how the new referral-tracking features of Zillow’s CRM could come in handy, Zillow Group Chief Business Officer Greg Schwartz cited the example of an expansion team leader referring a Zillow lead to a team member “who happens to work at a different brokerage or different office.”
