Why 95% of REALTORS Are Leaving BIG Money on the Table
EDITOR'S NOTE: This is Part 2 of a four-part series. Read Part 1, "Passing Up Easy, Instant Traffic -- How to Take Advantage of a Common Mistake."
The majority of real estate professionals today are leaving significant revenue opportunities on the table. A small percentage has figured how to profit using very simple, often ignored strategies.
A listing is your most valuable marketing asset. Traffic comes from MLS exposure, offline marketing and online marketing, which we discussed in Part 1. Insomuch as you can generate traffic by maximizing a property’s exposure, you would have accomplished a key objective. But that’s only the first step. You can dramatically increase the value of the traffic, by increasing the percentage of actual inquiries generated from that traffic, all by publishing a better quality listing.
For the purposes of this discussion, a listing is the part of a property description that is not necessarily public record. It’s the qualitative description, not the quantitative description. It’s a subtle point that’s very important. Many newer consumer real estate search sites these days speak of their focus on publishing richer listing data, while they pull in a load of public record information about listings, such as lot legal description, surveys, taxation, etc. It’s not my opinion that this content adds a lot of value to consumers looking up homes on the Internet. Rich data is qualitative, descriptive information that captures and retains the consumer’s interest. The listing agent and their client are the best ones to provide this data.
What exactly is rich data? Everyone in the industry should be aware of published research like the 2006 Profile of Home Buyers and Sellers, put out by the NAR. The data tells us that 95% of visitors to real estate web sites are looking for listings, and that the most valuable content to them is photos and property descriptions. The detailed findings appear at right*:
* NAR 2006 Profile of Home Buyers and Sellers.
If it is clear that consumers value photos and descriptions the most, why is there often such sparse data online? We are still struggling to move from a mentality of trying to bait the consumer by providing basic information and then requiring contact information for more data. When the consumer contacts the agent, the agent opens up the MLS book for the complete information. Well, today, that information is opening up. Holding back or publishing sparse information will make the consumer leave a web site in search for a more complete source. They know it is out there and they know how to find it. If you don’t provide it, your prospect will become your competitor’s customer. When an individual listing is concerned, sparse information means no inquiries, which in turn means lost opportunities.
If you are not on board with the story behind the above trend, let’s look at the data. A general conclusion about the perils of withholding data can be drawn by proving that the effectiveness of demanding registration in return for information is decreasing. The following numbers are taken from 100,000 Point2 web sites over the last 3 1/2 year period. The study compares the number of views received by IDX pages that had required registration, against the number of successful registrations.
* Point2 NLS UltraStats on Use of Registration Forms – Jan. 2004 to March 2007.
The data clearly shows that the effectiveness of requiring registration as a lead generation strategy is shifting. The catalyst is that there are many more sources for real estate listing data today than ever before. Even if we argued that listings have been readily available online for a very long time via Realtor.com, I would submit that for many years, over 50% of the listings on the site did not include photos. As a consumer, at the time, I would have chosen to register for information on an agent or brokerage site, if I thought I this would give me access to more complete information. But today, the thinking is no longer valid because there are so many sources online for complete listing information. All you would do is encourage users to leave your web site.
Again, as far as individual listings are concerned, publishing a listing with sparse information just makes the visitor click away to find what they are looking for; be it that house with the perfect yard, the perfect kitchen, or the dream basement.
In general, the real estate industry has performed poorly in adapting to online marketing. Part of the problem is trying to move away from this data protectionism; another is how effective the MLS can be on its own; another part is the duplication of effort to re-enter listing data with more information on their web site, which many brokers and agents perceive as a waste of time and resources. The final part of the problem is simply lack of attention to a powerful trend that has emerged.
The most damning comments in this industry come from within. It’s reported that the CEO of Realogy, Alex Perrilio stated at a Real Trends Gathering of Eagles conference that REALTORS® today are being out marketed by 10 year olds selling baseball cards on eBay.
Let’s get back to the facts. We looked at 100,000 Point2 NLS (National Listing Services) listings and measured the number of views listings received and the number of inquiries they generated. We then separated the listings by the number of featured photos. We hypothesized, based on widely available research data, that if photos were the most important content to consumers, then listings that feature more photos would produce more inquiries. Here is a compilation of the data*:
* Point2 UltraStats: Photo / Inquiry Report.
The distribution could not have been more picture-perfect. As more photos are added, more views and more inquiries are generated. The difference between a listing with 21 or more photos and listing with one is huge. To the agent, the data suggests there is a significant opportunity to capture more revenue off of the Web. To a brokerage with a large team of agents, the impact on the bottom line can be huge if only a few extra minutes are spent to add more photos and information to listing entries.
In the first part of this series, we looked at how you can generate more free traffic online. Here, the conclusion is that the best way to generate inquiries from this traffic is to publish better, more complete listings. If you’re in an area that allows dual agency, you are increasing your odds of doubling your commission. Regardless of where you are, you know that any inquiry is a possible client, be it a buyer, a seller or both.
In the next article, we will examine the value of analytics and how to take advantage of reports to distance yourself from your competitors.
(Jeff Tomlin is manager of channel relations at Point2 Technologies Inc. and a key member of the Point2 National Listing Service (Point2 NLS) strategic initiative team. You can post questions or comments for discussion with Jeff, or visit www.Point2NLS.com to learn more about listing syndication.)