In the last of his 5-part series, broker Nick Schlekeway looks at lead conversion. What is it, and why do so few agents ever get good at it?
This is the last in a five-part series covering the four Pillars to Success in real estate. So far we have covered personal development, strategic planning and lead generation. The fourth and final pillar to success in real estate is lead conversion.
So what is lead conversion?
Definitions are important and not everyone will define lead conversion the same way, so let me take a second to define what lead generation means to me.
I am a pragmatist, so I always look at the “point” or “objective” for anything we do and wrap the definition around that objective. The objective of converting leads is to solidify someone as a client working with you exclusively and ultimately to convert that relationship to a closed transaction that pays you and allows you to continue in the business of selling real estate.
Further, an additional goal of lead conversion would be to solidify that individual as a referral source and raving fan for years into the future.
So, what is lead conversion? Someone “raises their hand” and says, “I might be interested in working with you.” It doesn’t matter if it’s a phone call, email, text or internet lead. You have posted an advertisement or sent out a marketing piece or your name was given to them by a friend.
Now, how do you get them from the point where they say, “I might be interested in working with you” to agreeing to work with you as their agent, then go under contract with another party and, eventually, continue all the way to the closing table?
That process from initial inquiry to closed transaction can be a long and bumpy road. It is rarely easy or straightforward. You tend to find out pretty quickly why real estate agents get paid handsomely when they do get a deal across the finish line. If it was easy, everyone would get rich doing it.
Step one: Setting the appointment
The first step in the conversion process is often the most difficult for agents: Setting the appointment. The goal of any conversation with any prospect is to set up a face-to-face meeting. Only through a face-to-face consultation can you build the kind of rapport and do the type of investigation needed to cement this person as a client.
So how are you going to make sure that these people (often strangers) trust you enough to at least commit to a meeting?
Let’s say they agree to meet with you. Awesome. If you decide you still want to work with them during your meeting (don’t forget this interview goes both ways) then how are you going to convince them to trust you as their exclusive representative?
Proving yourself to potential clients
That process takes time and often extends beyond the initial meeting. Some buyers may need you to prove your stuff — via showings, analysis, knowledge of market, maybe an offer — before they agree to work with you, and any seller is likely to take multiple meetings and several conversations before they sign a representation agreement.
Once someone agrees to work with you, either explicitly or implicitly, you then have the task of getting them into a purchase and sale agreement with another party. Once under contract, you then must move through the escrow process with inspections, appraisals, renegotiations, clearing title and so on. It can be a long and arduous process to get the client what they need — and to get you paid.
If I had to relate one thing about lead conversion that I feel is the most important aspect to understand, it is that experience matters. Lead conversion is a skill whereas lead generation is more about willpower and the willingness to put yourself out there for rejection on a consistent basis — and simply do work that is not “fun”.
Conversion, on the other hand, requires more patience, practice and skill in order to bring deals to the finish line. Lead conversion relates directly back to personal development, which is the first pillar to success in real estate, because if you don’t have the knowledge and the expertise and the confidence, you’re going to really struggle with lead conversion.
You need to be comfortable speaking in front of other people, you need to have an expert-level understanding of your market, you need to understand how to market real estate to get buyers in the door, and more. Many of these skills take practice, and they take time.
The No. 1 reason most agents never get good at lead conversion
Most agents never get proficient at lead conversion because they simply do not have enough practice. They don’t generate enough leads to get adequate practice in their daily business and they refuse to practice with colleagues or friends in “mock” scenarios because they think it is embarrassing or trivial (it is not!).
I would estimate that the typical agent never goes on more than 50 to 75 listing appointments in their entire career. You cannot develop skills and become great at anything by doing it 50 times.
The number one reason that top producers take more and more market share over time is because they become great at lead conversion. They go on hundreds of appointments every year. Some of them pitch dozens of listings a month. They learn exactly how to tailor their message and their craft and their value proposition to get sellers to say “yes.”
A quote to ponder
“It’s much easier to double your business by doubling your conversion rate than by doubling your traffic.”
— Jeff Eisenberg
All of these pillars to success work together in harmony. The more you focus on your strategic plan, the faster you will get where you want to go and with fewer detours. The more you wrap your life around personal development, the more energy you will have to lead gen every day and the more impactful you will be in lead conversion.
The more lead gen you do, the more leads you work, the better you will get at converting leads to clients and clients to closings. Experience matters. Having a plan matters. If you work the system, the system will work for you.
Nick Schlekeway is the founder of Amherst Madison, a Boise, Idaho-based real estate brokerage. Connect with him on LinkedIn.