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The REAL Problem with Buying Online Leads that No One Wants to Talk About

July 08 2021

If agents buy leads and grow their business through advertising, then they become transactional.

If agents are transactional, then they become a commodity.

If agents are a commodity, then they can be replaced by technology.

THIS is the REAL problem with buying online leads and any kind of advertising.

And here's the thing—the companies who sell you leads and advertising are definitely not going to talk about it. It's not in their best interests.

But the good news is that the data says you shouldn't buy online leads or any kind of advertising!

And here's the punchline: if you don't, then you will stay relevant and not be replaced by technology companies like Redfin and Zillow, and iBuyers like Opendoor.

Now let's dig into the facts…

How do homeowners find their agent?

According to the 2021 NARS Home Buyers and Sellers Generational Trends Report, upwards of 75% of home sellers used a referral or agent they knew from the past to list their house. In addition, 36% of sellers recommended their agent three times post-sale of their own home.

Conversely, 1% of sellers used advertising to choose an agent and 1% used direct mail.

...so why are real estate agents and brokers spending so much on these platforms?

The loose answer is, because that's what they are told. When a new agent starts their business, they are willing to go along with the status quo. As for brokers, they too have been led down the garden path, so to speak. They can only provide so many tools for their teams before they become antiquated or ineffective.

What do homeowners care about?

The three most important factors in choosing a real estate agent to sell, by level of service, according to the 2021 NAR report, are:

  1. Reputation of Agent: 31%
  2. Honesty and integrity: 26%
  3. Knowledge of Neighborhood: 15%

So, it stands to reason that if people choose their agents based on the factors above, wouldn't buying leads and paying for bus bench advertising be unnecessary?

Simple answer: Yes.

The three factors listed above clearly have little to do with the actions of buying leads or advertising. What they all have in common is human connection. It's been proven time and again that people work with people they "know, like and trust."

So how are real estate agents supposed to create this loyalty so they can build a business instead of being transactional? The primary objective of real estate agents should be to become more relevant by their clients and become indispensable to their community.

Additional problem: The Covid pandemic

Advertising has often been referred to as "merely a connection of strangers." Now, consider what being a consumer, during a pandemic, while trying to buy or sell your house with a stranger really entails? Not sold on the idea?

The pandemic has far reaching effects as it has created a lot of fear-based behavior. We no longer want to meet strangers face-to-face for fear of getting sick. We have created "safe" bubbles and are intentional with whom we "let in." These are people we know, like and, most importantly, TRUST.

Combine this with the fact that homeowners have had over five years of experiencing poor service from agents who attest they are the local market expert, only to find out they flash fancy numbers and show comparisons of other listed houses and call it a day.

With a 30% decline in conversion from advertising, evidence is now indicating a massive shift towards using agents that people know, like and trust or who were referred to them by people they trust.

"The data speaks for itself. Advertising is working less and relationships are working more. Whether an agent uses my company's solution or not, the key to growing your business in this new normal is to spend less time and money on buying leads in all the various ways, shapes and forms you can, and shift that time and money towards adding value to people," explains Grant Findlay-Shirras, Co-Founder and CEO of Parkbench.com, a leading online website that helps real estate agents connect with their community and foster relationships with homeowners and business owners.

Real estate agents who fundamentally understand these concepts can consistently generate new business. This can be accomplished using various techniques and implementing them into one's daily business routine.

Some concepts include, but are not limited to, the following:

  • Create a website and post local news and events (helps with SEO)
  • List the businesses in your community, and post their deals, sales and specials (helps with SEO)
  • Blog about local schools, parks, events, etc. (helps with SEO)

This list is endless, but the work isn't.

"A referral system can be grown organically through providing value upfront and then cultivating your database," says Rick Aurora, a broker of Royal LePage Infinity Realty in Toronto, Canada. "The best referral in life is a personal referral from someone you know."

Rick and many other business-conscious real estate brokers are turning to companies, like Parkbench, for alternate solutions to help their agents in this fast-paced and highly competitive industry.

"How can I help you?"

These are five simple words, but they can have a huge impact on and can change your business forever. These words can help you separate your real estate business from your competition. These words can lead you to become the go-to person in your community.

Service first

By serving people first, by investing your time and energy into others outside of yourself and creating relationships that will last a lifetime, you become that person people will know, like and trust. As you refer people and businesses to each other, they will naturally want to refer business to you! It's the Law of Reciprocity!

Now understanding the "Law of Reciprocity" is one thing; implementing it is another. Rick Aurora believes this wholeheartedly. His company, Royal LePage Infinity Realty, reached out to Grant Findlay-Shirras when he saw what the Parkbench platform could do for his team. They have since formed a partnership that allows real estate agents to use the platform on a pay-as-you-go basis. "Grant has offered us to 'try before you buy' his services. That takes TRUST!" Rick states.

How does it work?

The Parkbench system has client acquisition down to a science. It is a systematic and predictable process to help real estate agents give value to their community. "The average agent who uses Parkbench grows their income by 25% year over year and they profit more since it's built on relationships and referrals vs advertising. Aligning with brokers across North America strengthens our position for long-term growth and offers them [brokerages] the ability to create business differentiation," Grant says.

Do you want to do more relationship based, community-driven marketing?

If you're an agent in The GTA, contact Rick to get access to Parkbench at no upfront cost to you, and use it to help you get more listings and referrals!

If you're an agent in any other part of the world and you want to become the local market expert and increase your exposure within your geo farm community, reach out to Grant Findlay-Shirras to learn how.

If you're a broker owner or team leader who wants to give their agents a systematic and predictable way to create high quality leads in their geo farm that doesn't cost you any money, then contact [email protected] to learn more about "the local broker program."

Free resource

parkbench buying leadsDo you want to know the top 30 local professionals who refer the most business to agents?

Download this free ebook and learn who they are and how you can connect with them. Also, you will learn how to add value to business owners so that you can build referral generating relationships with them.