Though the campaigns can become expensive, I view
purchasing online leads as high risk with the potential
for some reward, though I wouldn’t call it high reward. If
you’re spending around $1,000 per month on online leads,
it takes only one decent-sized transaction to pay those
costs back. However, as those costs add up, especially if
you’re paying more than that, it begins to take several
decent-sized deals to recoup your costs, and that really
starts to weigh on you. Honestly, the cost of purchasing
online leads is still higher for me than I’d like.
That’s why I’m in the midst of evaluating my return.
I’ve spent a lot of money on PPC, and tracking it has been
an ongoing trial-and-error process. But now I’ve got an
expert working on a cost-benefit analysis of my PPC campaigns so I can learn what they’re costing me per lead and
what my conversion ratio is. I’ve heard other brokers don’t
do PPC campaigns at all anymore because they believe the
benefit isn’t there.
Why I Do.
We’re not quite there yet. I do feel it’s expensive, but until
that analysis tells me otherwise, I still see enough value
that I expect to continue purchasing online leads.
I’ll be honest: There’s a fear of letting go. There’s a part
of me that’s afraid to stop because I’m trying to increase
the number of leads coming in as opposed to decreasing
them. It’s important to me to continue the flow of leads
at a consistent pace. If you slow those leads, you need to
proportionally increase them through your work on your
own Web site.
In addition, many of my competitors still market with
PPC. Other firms in Austin are accumulating more leads
than I am through these campaigns. One in particular is
just killing it. So there’s a lot of potential out there online.
It’s not so much that I feel I have to compete with them on
PPC as it is that if they’re still doing PPC, maybe I should
Finally, buying leads is also a proactive, targeted strat-
egy. We use it to target the most desirable communities in
our area. The Barton Creek community happens to be next
to my home, and it has high-dollar sales. One deal might
pay back all the cost of my PPC campaign there. So
The bottom line for me is that the flow
of leads is something I don’t want to in-
terrupt, and I’m still getting a positive
return on my investment in both my
Web site leads and PPC e;orts. Could
I save money? Probably. Should I get
rid of things like PPC campaigns alto-
gether? Maybe, but only if I can increase
the leads I generate on my own Web site. W
two dozen Web sites. Yet just two— www.seattle
home.com and www.seattlecondo.com—generate most of our
income. My advice to brokers: Don’t spread yourself thin
trying to make a ton of sites highly productive. Web sites
are a really crowded field. It’s all about focusing your best
e;orts on your primary site until you get to the top of the
search engine rankings. Then be sure to have a team to
handle the leads you generate.
Why I Stopped.
Also, don’t be afraid to invest in your own business. Many
brokers and sales associates are happy to spend $2,000 a
month on leads but afraid to spend $500 to set up a Web
site. In our case, the up-front cost of creating one site was
about what we’d spend on a month of leads, and we’ve spent
about $25,000 creating all of our Web sites.
Today, we spend about $1,000 per month to generate
40 to 50 leads a day from our sites, a return about 10 times
greater than when we purchased online leads. Our conversion rate is hard to compare because we used to have only
two sales associates working online leads, and today we
have 10, plus a telemarketer. However, even if we assume
the conversion rate is flat and we’re converting at only a
1 percent rate ( 1–5 percent the generally accepted average),
we’ve still significantly increased our return on investment.
We still have opportunities to add more tra;c by purchasing pay-per-click advertising on search engines like
Google, but it’s not necessary. What is necessary is a continued labor investment in our Web sites—blogging to
maximize search engine optimization because without
that, your visibility and online presence can slip away. But
blogging is not just beneficial to generating leads; it’s also
good for your business. It requires you to keep your ear to
the ground and increase your knowledge of the market.
You’re creating an identity online that doesn’t disappear
because you’ve stopped purchasing online leads.
Overall, buying online leads is a stop-gap measure if you
have to generate business immediately. In the long term,
however, it’s shooting yourself in the foot. If Internet lead
generators suddenly raise their prices dramatically—which
they’ve done—you could lose your income source overnight. You have no control over the rules, the platform,
or the pricing for online leads, and building a business on something you have no control over is a
fundamentally flawed strategy. In addition,
if you’re paying someone to provide you
with Internet leads while you’re trying to
generate them from your own Web sites,
you’re financing the people you’re competing against online when it comes to
search engine optimization. Ultimately,
it’s smarter for brokers and agents to
focus on investing in platforms that will
generate long-term business themselves. W