The Cost of Unqualified Leads

Following up on last week’s post about generating qualified leads, I wanted to share some thoughts on a pattern in lead generation I’ve seen over the past couple years that puzzles me.

An agent or broker will find themselves craving more real estate leads. No surprise there. To crank up the conversions, they’ll turn tactics that do indeed generate more leads, yet less qualified ones. Example tactics include things like forced registration websites.

In some cases, this creates a new problem: qualifying the less qualified leads. So they then hire additional office staff our call center services to respond to the less than qualified leads. This, of course, dramatically increases the cost per lead since you need to cover the cost of salaries or services.

This isn’t necessarily good or bad. I’m sharing this to help explain the costs involved in one particular lead generation tactic. If a large enough percentage of the less-qualified leads can be curated and converted into clients at a reasonable cost, this tactic would make sense.

As I mentioned last week, if I had the opportunity to talk to only one form of online generated lead, I’d love a phone call or email from someone who’s done some searching, poured over listing photos, discussed properties with their spouse, parents, etc., and then decided to contact me. My bias is toward giving consumers the information they’re looking for while demonstrating your professionalism and expertise online.

There are clearly as many lead generation strategies as there are Realtors, so suggesting there is a right or wrong way would be ridiculous. Which is why we work with our clients to measure what’s working in order to build websites that accommodate their business models.

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