Maximize Your Return on Internet Buyer Leads by Calculating the Cost of Acquisition


Let's get into buyer lead generation. This module is powerful in its simplicity. I mentioned chasing squirrels, and this is the biggest area where that is going on today. There is no "magic pill" to converting a lead; the buyer lead generation and conversion process comes down to very fundamental business principles. Managing this side of your business as a pillar of your business as a system that will ultimately run by itself.

There are 2 sources of buyer leads in my business. One is internet buyers, whether they are from social media, craigslist, and pay-per-click. The other kind is yard marketing.

Buyer leads are very easy to come by in general, but the process of turning these leads into appointments and closings is where the "magic" comes in.

Buyer lead generation is a numbers game, so you must know your conversion rates and lead acquisition cost.

It's become a pretty confusing and crowded space. When I first got into internet buyer leads, I got a Boomtown site. I was their 9th customer, and it was only my first full year in real estate.

The whole point here is that agents are bringing on multiple platforms, changing platforms, thinking that there is a magic pill and one platform is better than the other. They have different features, but at the end of the day, there is a buyer lead that needs to be serviced.

Internet Buyer Leads

Let's talk about internet buyers. I started my career using online classified ads. I believe in as low-branded sites as you can get. There wasn't even instant access to the website. The whole point is you have to have something exciting enough for a buyer to give you their information.

Getting one of these onboard and working it as a pipeline is critical in being able to scale your team. Our cost per lead is more in the $5-$10 range per lead, depending on the platform. I haven't heard of many agents above $25 or so in some of the higher priced markets.

From there, I don't know if our conversion rates are any worse than some of the bigger teams out there. They aren't really good. We are probably converting a little less than 2% to closing. We are scaling down our lead generation at this point because we just don't need the leads.

$10 per lead will put us at about $500 per closing for marketing.

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