It has been the business model for expensive real estate lead generation websites for several years now. Unfortunately, this business model rarely works for lenders long term and can actually cripple explosive growth for the agent.
Lenders typically don’t see a good return under this model and tend to stop their financial contributions after a short period of time.
This prompts the agent to focus on finding new lenders to fill the financial void, rather than focusing on a marketing strategy that improves their brand equity and client experience.
It may seem hard to believe, but many agents actually focus more energy on trying to get an extra $500 or $1,000 from a lender, opposed ot spending it on planning a viable, multi-channel marketing strategy that can be adjusted based on which tactics are working and which are not.
Here are some key reasons agents should avoid the trap of signing up multiple lenders for their lead generation programs in hopes of covering an extra $500 or $1,000 per month in costs.
Pay-per-click is just a Marketing Tactic
Successful co-marketing is a long-term business partnership.
Co-marketing should not be limited to a single tactic that produces the least amount of profit. A successful co-marketing strategy should be focused on leveraging the collective brand strength and the combined value proposition of both professionals.
Listings Are Where the Money Is
Some of the companies that sell agents on these systems generate scattered and random low-converting leads that are early in the buying lifecycle.
Millennials, in particular, view the traditional buyer’s agent as basically useless. They don’t see value in hiring someone less tech-savvy than they are to find information and drive them around.
They would much rather do their own research and initial due diligence than contact the listing teams directly. In many cases, a team member or buyer’s agent who works for the listing agent ends up showing the home and negotiating the offer.
You Need to Think Bigger
Many agents are seduced by the treadmill of endless leads.
Make no mistake, agents need leads to be successful but it's rare that lead generation websites are going to help build the type of brand equity that pays off long after they stop feeding the meter.
When the clock starts over every year, agents want to have multiple sellers calling them, because they saw signs in their neighborhood, received postcards in the mail, read a social media or blog post and heard from a friend what a great experience a buyer had with their team.
The most profitable agents have one primary lender as a co-marketing partner. Typically, that decision is made by considering which lender is most like-minded and can help execute an overall vision of high-quality customer experiences and building a long-lasting, local brand.