What is a lead exactly? A lead is defined as “a qualified potential buyer who shows some level of interest in purchasing your product or solution.” As these are the people who are potentially interested in your services, you should keep them close -- very close.
This means you need to track your leads and develop strategies to acquire more and better leads -- ideally at the lowest cost possible.
What should you be tracking?
Here’s a few of the main lead metrics you should track. These will help you uncover how successful your lead generation activities are and how you can improve them:
Number of leads generated per month. First of all, it’s important to track whether you’re generating a steady flow of leads -- and make sure this number is rising month after month.
This metric measures lead quantity.
Leads converted into instructions. What percentage of your leads actually turns into a property sold? No matter what the percentage is now, always look to increase it over time.
This metric measures lead quality.
Cost per lead. For most real estate businesses, it’s hard to make an accurate calculation for this one. One way to do it is to divide your total marketing budget by the number of leads you generate for each month. For most real estate professionals, this is an imperfect metric, because some leads might come from other sources than marketing. Nonetheless, it will set a good benchmark for you.
This metric measures lead generation efficiency.
These are the metrics that will tell you something about the success of your lead generation activities. For instance, if you’ve managed to increase your lead quantity by changing your strategy, that means you must have been doing something right.
But, how do you keep track of your lead generation strategy?
The best metric here is lead source. The source of a lead is the main factor influencing all your other lead generation metrics -- lead quantity, lead quality and lead generation efficiency.
For all your leads, keep a record of how you obtained them. This way, you’ll be able to track which source generates most leads for you. Once you know this, you can put more resources toward that source.
Increasing lead quantity and quality
So, a great way to increase both quantity and quality of leads is to make changes to your lead source, and see how this influences your other metrics.
That last point is particularly important. It’ll help you to increase the number of quality of leads.
Next, make a selection of lead sources to focus on:
1. Source that has generated most leads
2. Source that has generated highest quality leads (i.e. Most leads converted into instructions)
3. Source that generated leads at lowest cost per lead
Testing lead source
Lead source usually is the most important factor that determines the ultimate quality of a lead. So, it’s a good idea to check out which source of leads bring your the best quality -- and quantity.
To start testing, it’s best to set up an A/B test. Here, you use two different lead sources under similar circumstances and check which one produced the most and the highest quality leads.
Select lead sources. Select at least 2 or 3 -- but don’t overdo it. You don’t want to spread yourself too thin.
Use these lead sources for at least 3 months and keep tracking all your metrics.
See which metric is going up and which one is going down
If a metric isn’t working well for you, ditch it. If it seems to be increasing your lead quantity and quality, start working on this lead source more so you maximize your return.