1. Determine the value of the lead
It boils down to how much, how soon, and how much effort. How much effort contains two parts. How much to get them to the committed client level and how much to serve them to a high level of satisfaction, so they buy?
2. Determine if they need, want, and can afford your service
Do they have a demonstrated need? Is there a gap between what they want and where they are currently in their home? Are they seeking assistance? Is there a desire to change, or is it a want or wish? Do they have the ability to proceed? This usually relates to financial equity, down payment, credit score, employment. Do they want someone's help?
Too often, we are trying to determine the interest of the prospect. Don't be fooled into thinking their interest has value to you as a Salesperson. The prospect's level of interest is meaningless. What matters is: Do they need it; do they want it; can they afford to take action. It's their desire, need, ability, and authority to take action. Interest is something that many Buyers and Sellers use to evade committing to you or anyone else.
I have an interest in securing more real estate. I am always looking to buy more. My interest is securing property for 70% or less of fair market value. How valuable is my interest to you now? I would be happy if you called me to tell me about properties that you have that meet that criteria. The truth is if you find that type of opportunity, you'd better be buying it yourself, not selling it to me.
When someone says they are interested, it's a short way to say, "If you could sell my home for $50,000 above market value and find me a home to buy for $50,000 below market value, I would let you represent me on those transactions." Oh gee, how magnanimous of you!
3. Categorize the lead
This is where a lot of Agents stumble. They don't have a clean categorization process. They don't have the ability to see the inventory of leads they currently have in their possession. Most Agents categorize leads based on time frame. I think that is the right approach, but it is only half the equation. We might create categories like "A" leads who will do something in thirty days or less and "B" leads who will take action in thirty to ninety days. We could create four to five categories like these.
The real question, beyond time frame, has not been factored into this typical type of system. The real question is a question of commitment. How committed is this person to working with you? How committed are they that they will give you at least an interview to represent their interests? To me, committed means that I would bet big money on these people. I would bet my car, my house, all of my possessions that I was going to get an interview or that they were going to list or buy with me. Someone in that category has great value to me and my business. Not everyone is in that category.
The next category would be those who will probably do business with me. A probability is something that happens 51% or more of the time. I know that is a wide gap between 51% and the committed level of 98%. People make a lot of money on probabilities because the odds are in their favor. Casinos play the probability game, and so should you.
The last category is a possibility. That is something that is a 50/50 chance or less. It could be only a 1% chance; that is still a possibility, but you'd better have a Plan B if you are going to operate with such low odds.
Your follow-up plans need to be designed on your ability to accurately assess the conversion probability of the prospect. If you can combine the typical Agent's time frame categorization that is letter based (A, B, C, D, etc.) with the commitment scale (1 - committed to you, 2 - probably with you, 3 - possibly with you), you will have a process that will enable you to maximize the return on your time, energy, and effort to increase your conversion and income. By tracking these different categories of leads, you will achieve a clear picture of the health of your business. To have a healthy business, we must have a reasonable level of leads in each category. We need to cultivate leads upward from long-term leads to short-term. We need to move leads up from the possibility level to the probability level quickly. If we can't move them at least to the probability level quickly, the odds are too long; refer them to another Agent. Let them invest their time and let them accept the high burnout rate on these leads.
We are in an inventory business; when you are out of inventory, you are out of future business.