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Be Selective in Choosing Your Leads

Aug 27, 2012

Posted by

Heather Lutze

Heather Lutze has spent the last 10 years as CEO of The Findability Group, formerly Lutze Consulting – a Search Engine Marketing firm that works with companies to attai Read more

One of the critical questions to ask yourself is “What is a realistic lead?”  What is your definition of a lead?  Everyone’s definition will tell a great deal about where he/she is in the business.  When I first started in real estate, my definition of a lead was someone who wanted to buy or sell sometime in the relatively near future.  It was a very simple definition.  It was also a very broad definition and excluded very few people.

My definition has changed dramatically over the years.  Today it is someone who wants to buy or sell in the next 30 days.  How did I get from one very broad definition to one that is quite narrow?  Let’s take a look at the process.

“Time Is Money”

When I started, like most new agents, I had very little knowledge of the business.  I was chasing after any and every deal I could find.  Because my definition or philosophy about a lead was so broad, everybody on the face of the earth was qualified as a potential client.  Because of this, I had too many potential clients to work with.  Most of my potential clients, however, would never buy or sell a home in 30 days—let alone one through me.  Not at that time.

I spent a tremendous amount of time trying to persuade unmotivated people.  I learned then to tighten down my initial definition to anyone who would buy or sell within a year.  After a while, I tightened even more to anyone who would buy or sell within six months.  Then I tightened it down to 90 days, 60 days, and finally to 30 days!

Quality, Quality, Quality

If I had tightened my definition from the very beginning, I would have saved myself from a lot of mistakes, anguish, and lost income.  Do not wait to clearly define a lead.  Instead, spend your new-found time working to find more leads through better prospecting.  Having fewer good leads is better than having a bunch of marginal ones.  Quality, versus quantity, is the road to success.  If you want to sell a home in a week or a month, you only need two to three true leads a week to accomplish your goal.  Think in terms of qualified people who want to do something now!

All the time I spent working with people who were too far out cost me a lot of money.  We have all spoken with people many times or even put people in our car to show property who did not have the true motivation to buy or sell now.  Do not continue that process.  Change today!

Realism

Today, there really are people who want to buy and sell a home.  Our job is to go find them and help them do it.  My goal is to ensure they do it through me by incorporating sales skills and effective follow-up.  You might call it relentless follow-up.  Do not let go of a good lead.  Have you ever tried to get a bone away from a big dog?  Develop that attitude with good leads.

Here is a little hint for you:  a true lead should be someone who wants to buy or sell in 60 days or less.  Any further out and you are not creating closings.  You are also likely to be investing in someone who will never buy or sell.  Remember you are investing your time —your most precious commodity.  Do not waste it for anyone or anything.  We are all only given so much time in life.  If you have too many future potential clients rather than realistic clients, you will suffer a high level of frustration with no control of your business -- not to mention the financial losses you will face.

“Project Clients”

Keep your number of long-term or “project clients” down, so you can invest your time finding people who need help now.  I define a “project client” as someone who is:

•  Looking for the “perfect house.”  I guarantee they will never find it.

•  Looking for a “tremendous deal.”  The deal is rarely good enough for them to commit today.  If the deal is so tremendous, some other smart agent has sold it already.

•  Waiting for the right house, so they can put their own home on the market.  If they do not become motivated to sell after showing them a few houses that meet their criteria, you need to reevaluate whether they will or will not sell in the near future.

•  Still having low motivation even after you have called them back a few times.

Be Realistic

Stop working with people who are not committed to doing something now.  The old maxim of “great salespeople should be able to sell ice to an Eskimo” is false.  Great salespeople have clear definitions of what constitutes a lead.  They clearly follow their narrow definitions.  They prospect enough to keep a constant supply of leads flowing, so they can qualify and define them carefully.  When you do not evaluate effectively, you get so bogged down with future business that you miss the “now” clients.

Reflect and Clearly Define Prospects

Re-evaluate and review your definition every quarter to see if it has changed.  Stick to your guns.  Do not compromise because most of the time you will be burned.  There is nothing more painful than to compromise and then not get paid for your efforts.  The pain in the pit of your stomach is like no other.  Also, once in a while you will find that the person you worked so hard for will buy or sell with someone else.  I’ve found that more often than not, you probably saved yourself a lot of time and frustration.

Above all, do not be concerned if you made a mistake by over qualifying or over defining a prospect or lead, which might cause someone to use another agent.  Great salespeople do not worry about the transaction or closing they never had.  They focus on the key four-letter word in sales ... next!