How to find real estate buyers in a difficult market
I wrote about the new CRIBZ platform in my previous note and how we identified a US$3bn niche market by measuring the amount of investment real estate developers make in their upfront market. Every dollar spent by a real estate developer has one objective — generating sales.
To generate sales, developers and all real estate brands for that matter need to generate leads. The more leads, the more chance of closing a buyer. That’s the whole logic behind upfront marketing. You don’t build a display suite and spend millions in images, marketing collateral and lead generation if you could sell out your project on the back of architectural drawings.
Lead generation is dominated by the giants
The best lead generation platforms are those with the highest quality traffic. REA Group is perhaps the best in the world, now valued at around $10bn. It’s all about distribution and eyeballs, the numbers speak for themselves.
Here is a slide from our CRIBZ Pitch Deck.
We estimate real estate developers are spending anywhere from $100–300 per quality lead. CBRE estimates their sales success rate at around 4% — which means 96% of the leads they generate don’t turn into sales. It’s probably even lower with online portal leads.
The temptation for many real estate brands is to just get more leads. Throwing more money into lead generation sounds like a good idea. But it’s stopped working. The marginal return on a real estate portal lead doesn’t improve with investment. In fact, it goes the other way. Real estate leads don’t scale past a certain point.
So what’s the answer? Lead Qualification.
Lead qualification is essential in any sales process
Salesforce estimates that around 86% of phone calls will go unanswered in their first attempt. CRIBZ data shows that around 55–60% of leads are coming through after 5pm, when the agents have finished off their day and probably on their way home.
Buyers are more distracted, they’re harder to communicate with and they want an instant response. The breakdown often leads to a rising cost of acquisition for real estate developers, particularly in a slowing market where the buyer appetite has less urgency.
According to real estate technology expert Mike DelPrette “Zillow and realtor.com are both lead generators. They drive traffic to their web sites, advertise real estate agents, and generate leads in the form of consumers who are looking to buy a house.
This is the lion’s share of their revenues and the core of their business models. The conversion of leads to actual, paying customers is left up to individual real estate agents, and nominally occurs offline. But this is changing…”
Our lead qualification approach
Our focus at CRIBZ is on building the most powerful lead qualification platform to real estate teams. Developers and agents who spend millions of dollars each year on generating leads are doing themselves a disservice by not spending a small fraction on lead qualification.
Click the link below if you want to learn more about the CRIBZ Platform and how we help some of the largest real estate brands in the world qualify their online buyers.
Our approach is data focused. By enriching each online lead with publically available information, we steer the agent into a better conversation making them more likely to close. Knowing who each lead is can help agents understand what is most important to them and how to best serve their needs.
Our estimate calculator
We built a simple calculator which takes your existing marketing investment in lead generation and shows how many more potential sales you could be making by investing in a lead qualification platform like CRIBZ. Our assumptions are based on the more than 7,000 leads we’re qualified in 2019.
Peter Esho is the Co-Founder of CRIBZ, a sales support platform for real estate companies. Connect with Peter on LinkedIn here. More on CRIBZ here.
