As a real estate agent, you know leads are life. I’ve talked before about the six critical systems every real estate agent needs to build a sustainable business. These systems will help you maintain a steady flow of affordable leads, like the Gatorade you chug after a long, sweaty run (that’s how you picture yourself when you’re out running, right?).
But when it comes to real estate paid lead generation, what you actually want to know is when is it time to move beyond your existing systems and invest in some paid lead generation? There’s definitely a time and a place for it, and today, I’m going to go over the three signs you’re ready to invest in paid lead gen for your business.
1. Your Sphere of Influence Is Saturated
What’s that smell? It’s your saturated sphere of influence. When your phone starts blowing up with “I was talking to my sister’s husband’s cousin’s uncle’s friend from high school…” texts, it’s probably time to step up your lead generation strategy. Seriously, if you’re busy with transactions from your sphere, you might not need to invest in paid leads just yet. Hold on to your money and let that precious cash flow to the companies that are there to take your money.
Signs Your Sphere Is Saturated
- Your existing contacts are sending you most of your deals.
- You’re closing a lot of deals from referrals from your sphere, like your buddies, family, acquaintances, and old college friends.
- Your sphere doesn’t refer a deal to you. Not a single one.
If your sphere of influence is not bringing you enough business to keep you moving forward, it’s probably a sign that your contacts are so sick of hearing from you that they are actively avoiding your texts, emails, and that awkward wave across the bar. And maybe they’ve just blocked you. Either way, it’s time to start thinking about putting your hard-earned cash into paid lead generation. Or paying your friends to talk to you again. Whichever works.
2. Your Organic Marketing Is Healthy
This one’s a bit trickier because the general vibe from social media is that you need to have some flashy, expensive website and lots of social media followers and likes for paid lead generation to work. But that’s not true. In fact, I believe it is better to have healthy organic marketing first before diving into paid lead generation. This is a big indicator that paid lead gen will work for you. Think of it like this: Getting leads with paid advertising is like meeting someone online. The first thing they do is check your profile. If they like what they see, they will swipe right. But if they swipe left, it’s a hard pass. It’s just not meant to be.
How to Evaluate Your Organic Marketing
- Has your website gotten a lot of visits from your blog or website content?
- Do your social media followers regularly like, comment, and share your content?
- Do you have a healthy supply of new leads coming in from your current marketing efforts?
So if you want to build up your business first with free marketing strategies and grow your leads from there before you consider paid lead generation, you can check out these nine easy ways to get organic leads or read our comprehensive guide on how to do SEO for real estate agents.
3. You Have a Healthy Budget for Marketing
Look, if you’re not willing to spend some money on your business, I can only assume that you are a high schooler with a Chick-fil-A coupon and no money for gas. I hate to break it to you, but running a business isn’t cheap. And neither are leads. If you want to generate leads online, you are going to have to open up your wallet.
How to Know If You Have the Right Budget
- Estimate the cost per lead and average commission: A good starting point for most agents is to budget around $350 a month. Based on our research, a budget of this size should generate around 100 leads a month.
- Consider your conversion rates: Our conversion rates show that a budget of around $350 will generate around five transactions for you in a year.
- Play the long game: Remember that a solid strategy for paid lead generation requires a long-term commitment. It may take six to twelve months before you start seeing the fruits of your labor.
Consider doing a little math before diving in. Conversion rates are important. If you generate around 100 leads a month, you can expect about five of them to turn into a transaction. If your average commission is $15,000, then a $350 a month budget should give you about a $45,000 return on your investment, assuming all the signs point toward paid lead generation being right for you.
Paid lead generation isn’t a hard and fast science. When it comes down to it, it’s just not the right fit for a lot of agents, especially the newer ones. But if you know your ROI on paid lead gen, can afford to go for it, and the signs are right, it’s a great way to scale your business. If you’re not sure if paid lead generation is right for you, read this article to find out.
The short answer is, yes, you can absolutely generate leads without having to pay for them. But there are definite signs that indicate you are ready to start investing in leads. So if you’re an experienced agent who doesn’t have the time, energy, or even the desire to spend all your free time sifting through hundreds of cold leads, maybe it’s time to put those systems to use and start looking for a way to generate paid leads for your business.
What do you think? Are you ready to start generating paid leads? Let us know in the comments!
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