Lead generation and qualification and agent follow-up are perennial concerns in the real estate — and the flow of venture capital dollars is beginning to show it.
What’s in the future for leads, and why are lead conversion startups getting millions in funding? Panelists at Inman Connect San Francisco hashed that out Friday morning.
They included Ben Rubenstein, founder and CEO of lead marketing and conversion service Opcity; Hillary Anne, vice president of sales and concierge operations at lead referrals firm Agentology; Constance Freedman, founder and managing partner at venture capital fund Moderne Ventures; and Marc Regardie, vice president of business development at listing portal Homesnap.
Clelia Peters
After introductions, panel moderator Clelia Peters, president of Warburg Realty, kicked off the panel by noting that Zillow, a company with a market cap in the billions ($12.5 billion to be exact), is a powerhouse when it comes to lead generation.
So, “why do you guys exist?” she asked, half-joking.
Ben Rubenstein
“I don’t think they’re doing this,” Rubenstein replied, referring to the conversion process that startups like his begin once a consumer becomes a “lead.”
“I don’t think there’s been a lot of technology and innovation once the customers raise their hand, getting all the way to close,” he added.
Anne disagreed somewhat. “We actually think Zillow is trying to solve the same problem we’re trying to solve,” she said: “speed to lead” — responding to consumers as fast as possible — and lead qualification — determining who is a “now buyer” and who is a “later buyer.”
Hillary Anne
She referred to Agentology as “your 24-7 on-demand ISA” (inside sales agent team). “We engage real estate leads 24 hours a day, seven days a week within five minutes,” she said.
“Most agents only call half their leads, they have 1.3 touches, they don’t follow up with every single one, so follow up is kind of an issue.”
Constance Freedman
Freedman noted that online marketing spend surpassed TV ad spend last year. “Is a lead more important, or is a qualified lead more important?” she asked rhetorically. “Obviously you all will pay for a qualified lead because that’s more important.”
Rubenstein pointed out that what agents are looking for isn’t leads or even qualified leads, but closings.
Freedman agreed. “Right, a dollar a lead is not a dollar a lead if it takes 100 leads to get to a sale. It’s really a hundred-dollar lead,” she said.
Consumer and agent expectations have also changed when it comes to leads, according to Peters. Although both used to be happy to answer their phones, now there’s “lead fatigue” from being marketed to.
Consumers expect a “meaty, important kind of convo when they fill something out,” Anne said. “I think consumers are expecting everyone to elevate their game.”
Consumers want agents to reach out right away, but it’s not realistic to expect an agent to be able to reach out within seconds, Rubenstein said. That’s why having someone “who’s able to get to things the way you never could” will help meet those consumer expectations, he added.
“It’s not necessarily the first person to talk to the consumer [who gets the business], it’s the first person to meet with the consumer,” he said.
There are different kinds of leads, the panelists noted. Freedman pointed to the ads served up in the movie Minority Report — personalized and relevant to where you’re standing right now — as examples of the types of ads becoming more and more common.
Marc Regardie
“The days of mass marketing are kind of going away,” she said. She cited Homesnap’s partnership with Waze as an example and as a reason Moderne decided to invest in the company.
Rubenstein agreed. “Consumers have expectations of a more personalized experience, [such as that delivered by] Netflix and Amazon,” he said. In that context, to get a call from an agent who lives 100 miles away and doesn’t know anything about their neighborhood is a really frustrating experience, he added.
“The consumer isn’t coming to us anymore. We need to meet the consumer where they’re at,” Peters said.
It used to be off-putting when a company knew too much about you. But now when she calls Delta, and if they don’t recognize her phone number, know her flight number and that she prefers a certain type of seat and meal, she thinks, “What terrible customer service,” Peters said, chuckling.
Do lead marketing and conversion startups compete with brokerages?
“At least in our world, it’s a shared success model,” Rubenstein said. “We are not making any money unless the broker makes money.” Opcity takes a 30-35 percent referral fee when they take the upfront risk and purchase leads, and a 20 percent referral fee when working a broker’s own leads. “For that 20 percent fee, we should be giving brokers a higher than 20 percent increase in conversion rate than they have on their leads today,” he said.
Regardie advised talking to agents to find out what they want in their lead marketing, noting that that would lead to agent success as well as keeping them as longer-term customers.
Editor’s note: This story has been corrected to note that Opcity takes a 30-35 percent referral fee when they purchase leads and a 20 percent referral fee when working a broker’s own leads, not a 25 percent referral fee overall as the story originally stated. Inman regrets the error.
