Overview of Lead Generation in Real Estate
“Lead generation” is a phrase that real estate agents use to describe the process of advertising their business to find clients. When people talk about lead generation in real estate, they may use the following words interchangeably:
Advertising = Marketing = Prospecting = Lead Generation
Likewise, you may hear potential clients referred to in multiple ways: Leads, Prospects, Buyers, Sellers, Mets, and Unmets.
Lead generation is the most important aspect of your real estate business, because it’s how you find clients. If you don’t have clients, you can’t sell houses and make money, no matter how good you are at other parts of your job. You may be the best home stager, transaction manager, and negotiator in the world, but without clients, it doesn’t matter.
There are many individual activities you can do to generate leads, but instead of listing all the lead generation activities in one long list, it’s more effective to categorize them into four primary strategies:
- Prospecting
- Digital (Internet) Marketing
- Farming
- Networking
Each marketing strategy requires that you put a system in place—a collection of tools and regular activities—in order to attract leads and get their contact information into your database of Contacts. These systems are interrelated and you can think of Digital (Internet) Marketing, Farming, and Networking as a way to meet people you don’t know yet (Unmets) to put them into your Prospecting system (Mets) so you can stay in touch with them and convert them into clients.
The main marketing system that ALL real estate agents need is a Prospecting System. Your Prospecting system is the core of all your lead generation activities. The main purpose of your Prospecting system is to communicate with people you already know on a regular basis, through your daily lead generation activities. Your communications should build rapport and establish your credibility with your prospects. Then, when it’s time to buy or sell real estate, your prospects will contact you because of your ongoing relationship building activities.
Check out the real stats on Why You Need a Robust Prospecting System
What’s more, as you stay in touch with your prospects, you will receive referrals from them to continually build your database of Contacts. Make sure that you always do a good job of following up on referrals and converting them into clients.
The purpose of the other three systems is to meet people and move them into your Prospecting system so you can stay in touch with them.
Understand the Four Primary Marketing Strategies for Lead Generation
Again, there are four primary marketing strategies that you can use to find clients:
- Prospecting your existing “Sphere of Influence” (people you already know)
- Digital Marketing with your own business website (attract new people)
- Farming a geographical area (attract new people)
- Networking (attract new people)
Some strategies are good for some types of target markets, while other strategies may not be. You do not need to implement all four marketing strategies. Most agents can be successful by focusing on one or two strategies…especially your first year.
You can’t do everything at once, so get proficient at one or two strategies, that best match you and your target market, and you can add other strategies later—if necessary.
Prospecting for Lead Generation in Real Estate
All agents should use Prospecting as a marketing strategy because it can be the fastest, easiest, and least expensive way to generate both buyer and seller leads. This is a process where you stay in touch with the people you already know, who live in your market area or nearby, and ask them if they know anyone else who needs a real estate agent. This is referred to as “staying top of mind” in the industry. You do this over and over again in various ways: phone calls, emails, texts, special occasion cards, lunches, social media, etc.
If you already know a lot of people and have a large Sphere of Influence (SOI), then this marketing strategy may be the only method you need to build your business. However, if you have a small SOI, then you will need to use this strategy, and at least one other marketing strategy, to build your business.
Here are some challenges that you need to be prepared for with Prospecting:
- Everyone in your SOI probably already knows several other real estate agents. They may be hesitant to offend any of their real estate agent friends (by hiring you).
- Friends and family members may be hesitant to hire you because they don’t want you to know their financial situation.
- People who know that you are brand-new to real estate may not feel comfortable hiring you to handle their largest financial investment…you have no real estate credibility with them—yet.
If you run into these challenges, then you will need to use one or more of the other three marketing strategies to meet new people and convert them into clients.
Farming for Lead Generation in Real Estate
Farming is very common with real estate agents and can be effective at finding seller clients (and sellers are usually buyers as well). This is where you focus on a limited area (such as one neighborhood or building) and try to build a client-base in that area through consistently repeated activities, such as maintaining a neighborhood Facebook page, hosting open houses, door knocking, direct 
mail, calling on Expireds and FSBOs in the neighborhood, etc.
A Farm area is limited geographical area. You don’t “farm” an entire city, only a selected area. There is one exception: Farming a niche market that is house/lot type-specific. You can send direct mail to home owners who live on waterfront properties, luxury properties, golf course properties, etc. within a specific ZIP Code (for example).
Generally speaking, this method can be very effective for Extroverts (who don’t mind door-knocking or cold-calling FSBOs and Expireds) or Introverts with a large budget (because direct mail, billboards, and print advertising can be relatively expensive). However, this method can take time and greatly depends on your consistency. Don’t expect one newsletter advertisement or one direct mailing of postcards to generate a huge amount of leads. You need to consistently advertise and mail over a long period of time (at least 10 months). That’s why you may need a large budget.
At a minimum, you should plan your budget to include sending at least 200 pieces of direct mail each month for 12 months (the entire year) as part of your Farming strategy.
If you are going to Farm a target market, then you should also review your competition in that farm area. Use your MLS to search for selling agents with the most sales in your Farm area. However, don’t let competition prevent you from farming an area that is right for you! Find the weaknesses in your competitor’s strategy and then implement a strong Farming strategy of your own.
| About Buying Leads
These days there are various services where you can buy leads or sign up as a recommended real estate agent, such as Zillow Premier Agent, Nextdoor, Google Screened, Market Leader, etc. Generally, these leads are for a specific area, such as a ZIP Code. So the marketing activity of “Buying leads in ZIP” is considered to be a Farming strategy, because it focuses on a specific area…even though it may be for an entire ZIP code and not just a neighborhood. |
Networking for Lead Generation in Real Estate
Networking is the process of getting involved in local schools, charity events, and organizations in order to consistently meet new people. Once a new person is in your Contacts, then you will use Prospecting techniques to stay in touch with them on a regular basis.
Another form of Networking is working with other business owners and vendors you know and setting up informal agreements whereby you send them referral leads in exchange for them sending you referral leads. An organization that specializes in this is called BNI, Business Network International (see www.bni.com). You may want to see if there is a BNI group you can join in your area…or start one up!
Networking can be relatively inexpensive. Attending meetings should not cost that much, although membership fees and ticket prices can certainly add up. However, you need the right personality to Network effectively. If you are super-Introverted, then attending large gatherings of strangers on a regular basis may not be suitable for you on a long-term basis. But if you have an out-going Extroverted personality (or can fake it!) then attending a few networking events each month may be a good method for building your business.
Keep in mind that attending events, by itself, is not enough to build your business. There is an “art” to Networking effectively, so read some of Ivan R. Misner’s books on the subject to maximize this method of lead generation, such as:
- The 29% Solution
- Networking Like a Pro
- Business by Referral
Digital Marketing for Lead Generation in Real Estate
Digital (Internet) Marketing is a system that uses a website to offer unique Items of Value (IOVs) that people want and (hopefully) can’t find anywhere else. An example would be a “Top Places to Live In YOURMARKET” guide which is a great overview of the top neighborhoods in your area. When a prospect signs up for the guide, they willingly give you their contact information.
Once the contact information is in the system, an autoresponder automatically emails the IOV to the prospect, and then sends “drip” emails to the prospect on a regular basis. This “drip campaign” is designed to establish your credibility and build rapport with the prospect, with the hope that they will contact you when they are ready to buy or sell.
The terms “Digital Marketing” and “Internet Marketing” are used interchangeably. 🙂
This method of marketing your business takes a bit of time and effort to set up, but then it works for you 24X7, even when you sleep, for the rest of your career. It works best at attracting buyer clients, but can provide seller clients too, since most home buyers are home sellers too.
Having a website (such as a broker-provided website) that does not offer an Opt-In for an Item of Value, and is not tied to an automated drip campaign, is not an Digital Marketing System (IMS). Having accounts on Facebook, Instagram, Pinterest, and LinkedIn is not an IMS.
To be a complete Digital Marketing System, you must have all three parts in place:
- Item of Value to offer (with sign up page)
- Website to advertise the IOV
- Automatic email (drip) campaign
Digital Marketing is relatively inexpensive (compared to print advertising and direct mail campaigns) and long-lasting. If you spend 4 hours preparing for and hosting an Open House, when you are finished, that time is gone. How many leads do you have to show for it? But if you spend 4 hours writing a web page about a specific neighborhood, then that page can generate leads for years to come.
Plus, in today’s social world, people expect high-quality, successful agents to have a great website and digital platform. They want to see you “all over the Internet” when they vet you via online searches. So this kind of marketing strategy works very well at building your reputation as the local area real estate expert.
Summary of Marketing Strategies in Real Estate
The following graphic summarizes the four primary marketing strategies to help you with lead generation in real estate.
Keep in mind that there is no ONE perfect marketing strategy or lead generation system for all real estate agents. Some real estate agents succeed with a Farming strategy focused on open houses, while others do not. Some agents succeed with a Networking strategy focused on volunteer work at their kid’s school, while others don’t have school-aged kids and can’t use this strategy. Some agents succeed with a robust Digital Marketing strategy (like me!), while others do not.
Newbie agents are often looking for that ONE perfect system. However, what you should be focused on is finding the synergistic intersection between a profitable target market in your area, matched with your unique personality and skillset, and matched with the right marketing strategy for you and that target market. When those three things intersect and work together, that results in a powerful lead generation system.
Decide On the Best Marketing Strategy for You
You don’t have to use all four marketing strategies. You should only choose the strategies that are compatible with your personality, budget, and target market. During your first year, you may only implement one or two marketing strategies, and then add another strategy next year. It’s better to get really good at one or two strategies first, and then add more later, than to try to do everything your first year.
Your Target Market: ___________________________________
If you don’t know your Target Market (which may be the most critical aspect of being successful at lead generation) then you need to take the time to analyze your market and select a PROFITABLE target market. Don’t just “wing it” on this part of your lead generation strategy. You don’t want to waste a lot of time and money on the wrong target market.
For example, you may think Farming the neighborhood where you live is a good idea. However, if your neighborhood has low turnover (such as only 10 sales a year) and you need to sell 15 houses to meet your income goals, then even if you had 100% market share, you still would not meet your goals.
Or if you choose a niche based on your personal interests, but that niche doesn’t really exist in your market area, then you will be wasting time and money.
If you truly want to be successful in real estate, then choosing a profitable target market based on real data analysis is the best way to achieve your goals.
Consider Your Personality
Your personality type should greatly influence the marketing strategies that you choose. You don’t have to do ALL the marketing activities available. Being great at just a few things can be much more effective than being mediocre at many things.
Go online right now and take a free DISC assessment as well as a free Myers-Briggs Type Indicator assessment to help determine your personality type.
- DISC ⇒ http://www.123test.com/disc-personality-test
- Myers-Briggs ⇒ http://www.humanmetrics.com/cgi-win/jtypes2.asp
Matching your personality type to the right marketing activities is useful in preventing burn-out and frustration. For example, if you choose Networking as your primary marketing strategy, but you are naturally Introverted, then you will probably burn-out very quickly. However, if you are super-Extroverted, then Networking will be an easy and natural way for you to market your business.
Consider Your Budget
Your budget will also influence the strategy you choose. If you have a very limited budget, then Farming an area with direct mail, billboards, and newspaper ads may not be possible at the beginning of your career. However, you can use some low-cost Farming techniques such as door-knocking and hosting open houses.
Consider Your Target Market
The type of target market and niche that you want to focus on will also influence the type of marketing strategy that you choose. Think about your target market and how they find information about real estate. If your market is first-time home buyer Millennials, then Digital Marketing will be a smart choice because they probably use the Internet to find information. However, if your target market is retirees looking to downsize, then Digital Marketing may not be effective (since that market may not be likely to use the Internet to find you).
Choose Your Marketing Activities
After you select the best marketing strategies for you and your target market, then you should decide which marketing activities you want to implement your first year. For example, if you plan to target the First-Time Home Buyer niche, they are probably Millennials, so you will need to use social media activities in the Prospecting strategy as well as implement an Digital Marketing campaign that targets first-time home buyers in your area. If your target market is FSBO sellers, then you will need a strong Farming campaign, but you may not be able to afford Radio/TV ads yet.
Think about your target market as you go through the following tables and check off the specific lead generating activities that you can implement this year, that match your personality (Introvert or Extrovert) and your budget.
Summary
When you’re trying to grow your real estate business, lead generation in real estate is one of the most important skills that you should master. You’ll need reliable systems that help you meet new people, stay in touch, and turn into clients.
Our unique way of teaching lead generation in real estate organizes all the possible 100+ lead generation activities into four major strategies—Prospecting, Digital Marketing, Farming, and Networking—so you can choose the right fit based on your personality, budget, and target market.
Not every strategy is right for every agent, so the key is choosing one or two approaches that match YOUR unique strengths. That way you won’t burn out like you will if you try to force yourself to do things that aren’t a good match. Whether you’re an introvert or an extrovert, on a tight budget or ready to invest, there’s a lead generation system that will work for you. The sooner you focus on building the right system, the faster you’ll start attracting clients and closing deals.
Use our Easy Marketing Plan Template for Real Estate Agents to create a marketing plan that will actually grow your real estate business.
From Guessing to Growing: Create a Real Estate Marketing Strategy That Delivers
This Easy Marketing Plan Template gives you a guided structure for choosing the right lead-generation strategies, aligning your marketing with your income goals, and developing a marketing plan that will help you on the path to success.