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Lead Generation Rates and Goal Attainment
Lead generation is crucial for business success, especially in competitive sectors like real estate. This chapter focuses on “lead generation ratios” and their use in achieving goals.
1. understanding❓ Lead Generation Ratios:
Lead generation ratios are metrics that define the number of contacts or actions required to generate one lead. These ratios vary based on factors including:
- Lead source: Existing (Met Database) or new (Haven’t Met Database).
- Contact method: Direct or indirect.
- Lead quality: Genuine interest.
1.1 Database Types and Conversion Rates:
- Met Database: Includes people you know, like past clients, professional contacts, friends, and family. Conversion rates are typically higher due to existing trust❓.
- Example: “8 x 8” or “33 Touch” program involves contacting each person in the database 33 times per year.
- Conversion Rate: “33 Touch” should result in repeat business and referrals at a rate of one referral and one repeat business per twelve people (12:2 Ratio).
- Haven’t Met Database: Includes people you haven’t contacted before, such as those in mailing lists, advertisements, and social media. Conversion rates are lower because you start from scratch in building trust and interest.
- Example: “12 Direct” program involves direct contact with each person in the database 12 times per year.
- Conversion Rate: “12 Direct” should produce one new piece of business for every fifty people (50:1 Ratio).
1.2 Factors Influencing Lead Generation Ratios:
Lead generation ratios are affected by internal and external factors.
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Internal Factors:
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Lead Conversion Rate: Percentage of leads converted into appointments.
Lead Conversion Rate = (Number of Appointments / Number of Leads) * 100 -
Appointment Conversion Rate: Percentage of appointments leading to signed agreements.
Appointment Conversion Rate = (Number of Signed Agreements / Number of Appointments) * 100 -
Listings Conversion Rate: Percentage of acquired listings that are actually sold.
Listings Conversion Rate = (Number of Listings Sold / Number of Listings Acquired) * 100
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External Factors:
- Seller’s Market: Shortage of homes for sale or large number of buyers.
- Buyer’s Market: Shortage of buyers or large number of homes for sale.
- Transitioning Market: Market shifts between seller’s and buyer’s markets.
2. Calculating Goals Based on Ratios:
To determine the number of leads needed to achieve a specific goal (e.g., 320 annual sales), determine conversion rates for both “Met” and “Haven’t Met” databases. Then, calculate the required contacts for each.
Example:
- Met Database: 12:2 ratio
- Haven’t Met Database: 50:1 ratio
To achieve 320 sales:
- Option 1: Focus on Met Database. Requires (320 sales * 6) = 1920 people.
- Option 2: Focus on Haven’t Met Database. Requires (320 sales * 50) = 16000 people.
- Option 3: Mix both. For example, 960 people in Met Database (yielding 160 sales) and 8000 people in Haven’t Met Database (yielding 160 sales).
3. Practical Applications and Related Experiences:
- Case Study: Real estate agency implemented “33 Touch” on its “Met Database.” After one year, referrals increased by 25% and repeat sales❓ increased by 15%.
- Experiment: Real estate agent tested two types of online ads. Ads targeting specific customer segment (e.g., first-time buyers) achieved 50% higher conversion rate compared to general ads.
4. Acquiring Names:
- Met Database:
- Attend social and professional events.
- Contact past clients.
- Request referrals from current clients.
- Participate in community activities.
- Haven’t Met Database:
- Purchase mailing lists.
- Collect data from online ads.
- Participate in exhibitions and trade events.
- Use social media for lead generation.
5. Adapting and Overcoming Challenges:
Lead generation ratios can change. Monitor them and adapt strategies.
- Regular Analysis: Monitor conversion rates periodically (weekly or monthly).
- Training and Development: Invest in sales team❓ training.
- Effective Marketing: Develop effective marketing strategies.
- Flexibility: Be ready to change strategies to adapt to market changes.
understanding lead generation ratios❓❓ and achieving goals is key to business success.
Chapter Summary
This chapter focuses on understanding❓ lead generation ratios❓ to achieve real estate goals, analyzing customer database figures and their effective utilization.
Key points:
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Lead Generation Ratios: Ratios vary based on database type (“met” vs. “never met”).
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Number of Necessary Contacts: Real estate agents can achieve 320 annual sales by focusing on increasing database size. Adding one person daily to a “met” database for 240 working days/year leads to sufficient database size for 320 annual sales after eight years. Alternatively, accumulate mailing lists to reach 16,000 in a “never met” database.
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Sources for Names: Addresses methods for obtaining names for databases, emphasizing a proactive approach.
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adapt❓ation and Overcoming Challenges: Emphasizes adapting to market changes; lead generation ratios may be relatively constant, but internal and external factors influence results.
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Internal Factors: Include lead-to-appointment conversion rate❓ (appointments/leads x 100), appointment-to-listing agreement conversion rate (listing agreements/appointments x 100), and listings-taken-to-listings-sold conversion rate (listings sold/listings taken x 100). These should be tracked, evaluated, and training❓ provided to improve performance. MREA benchmarks are provided for appointment conversion rates (65% buyers, 80% sellers) and listing conversion rates (80% buyers, 65% sellers).
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External Factors: Include seller’s market, buyer’s market, and transitioning market. Agents should understand and adapt to local conditions by tracking appropriate lead sources and adjusting marketing strategies.
