Real estate professionals buy lead generation for many of the same reasons an estimated 140 million Americans spend over $70 billion on lottery tickets every year:
I really could get rich with just a few bucks per month
If I don't buy, I can't win
Everyone else does it, so I must be missing something if i don’t
I may not win millions, but I know someone who won $5,000 once
For buyers, the lottery is about hope; hope and a belief in the fairy tale of a magical event of good fortune for doing very little at all.
As Dr. Stephen Goldbart said recently in a Psychology Today article, " When times are tough, and we are continually struggling to get in command of our financial lives, a little fantasy goes a long way to feeling better." He calls it "Lottery-itis."
For the majority of real estate pros who spend good money on bad lead generation, I call it "Lead-itis."
What exactly is Lead-itis?
Paying a lot of money each month for the same lead generation everyone else in your zip code is using
Spending good money on indiscriminate ads for your services or listings in hopes of getting ahead of your most-successful competition in your area
Buying lead generation and getting leads that take a lot of time and money to work to a close (or even just a phone call)
Paying for lead generation without knowing exactly how well you're doing for your money
Getting lead generation to "jump start" your new business
Buying lead generation because your website isn't getting you many leads
Paying for lead generation because all your peers are doing it and you'll be left out
Lead-itis is a chronic disease in the real estate profession right now, and one that could actually lead to the near-death of your business over the long haul. At best, it's very bad for overall business health.
So how can something that seems like the right thing to do be so bad? The answers are actually simple when you step back and think about it a bit.
A Little Does Not Equal a Lot
Did you know that the majority of people who buy lottery tickets earn the least annual income? Psychologically-speaking, lottery tickets play on the desire to get ahead of others, with little effort.
Bad lead generation companies play heavily to the same type of audience: those not doing well and who want to get of others ahead quickly.
And, like the lottery, most lead generation providers want you to keep buying.
The best way to charge you more is to show you some quick results from running lots of broad digital ads to give you a little taste, then ramp down the money they're spending to get you those indeterminate quality leads and ask you for more cash to get more leads.
It's all kinda like treating the symptoms and not the cause. As the months go on, you're left wondering why do I still feel so bad?
Bad lead generation not only prolongs your illness - it spreads it to the people you're trying to convert!
All of the most popular lead generation tools force users they DO drive to your site to login after a click or two. It's a proven marketing fact: users don't like being forced to give you their info.
Think about it. Which do you think is a better lead? One that chooses to reach out or one that's forced to? This means customers get a bad taste in their mouths from your site and they remember it when it does manage to show up in ads or search.
But that's not the worst of it. Perhaps the biggest impact on your business from buying bad lead generation? It causes you to ignore a marketing fundamental that makes you truly healthier over the course of your company’s life:
Your digital presence.
Meaning - how buyers and sellers find you as they search on the web, from their mobile and or on social media.
So, what does that mean exactly? Most real estate pros look at lead generation as a shortcut to gaining more leads.
After all, Search Engine Marketing (SEM) and optimizing your website (SEO) is a hard, time-consuming effort that must be continuously monitored.
But the cold, hard truth is - with more than 90% of all buyer and seller transactions starting online via search - how easily and well you're found by searchers will determine the health of your business more than anything else over the next 10 years as Millennials take control of more than $50 TRILLION in inherited wealth.
Turns out all that stuff your dad told you growing up is, well, true. Hard works always pays off; there are no shortcuts; there are no free lunches.
More importantly, all those successful competitors you're using lead generation to catch up to? I guarantee you their SEM is tip-top.
Encourage People to Come to You
Your website should be your top lead generation tool. Period. It's a key pillar of the most successful sales and marketing philosophy of our day - "Inbound Marketing” as opposed to most paid lead generation efforts which is the least promising type of marketing called "Outbound Marketing."
With inbound marketing, you get leads based on a buyer’s needs and interests. Conversely, paid lead generation is equivalent to walking down to your street corner and screaming at people as they walk buy to "buy! buy! buy!"
If you don't know how well your site appears in search, stop paying for that lead generation NOW and get a real (more on that in a future article) SEO/SEM expert to fix your site.
Then, it’s important to keep an eye on your performance over time.
SEM is a marathon and buyers and sellers constantly change their tastes and habits. If you "set it and forget it" with your site, I guarantee your search visibility is bad. It’s probably very bad. Which begs the question, if no one sees your site, why even have it?
Beware of Lead-itis. It’s costly to treat, dangerous and sometimes deadly. And it's highly contagious.
Keep your business healthy for the future and break out of the crowd you're moving in now, before it's too late. As my dad was also fond of saying when I was growing up, "If everyone jumped off a cliff, would you?"