We’ve been hearing a lot from our customers about the proposed Zillow+Trulia merger. Who can blame them?
As Steve Murray of REAL Trends was quoted by Bloomberg, “Zillow has locked up the absolute dominate position in online real estate in United States.”
When #1 gobbles up #2 to control nearly 50-70% of the online lead market, there is cause for consternation. Traffic stats vary. For August 2014, comScore who tracks online visitors in the real estate category reported Zillow got 43% of 95.8 million monthly visitors, Trulia pulled in 25% (combined 68%), Realtor.com attracted 19%, Homes.com 9%, and Redfin about 5% of total traffic. On September 1, the Top 15 Most Popular Real Estate Websites ranked by eBizMBA reported estimated unique monthly visitors was 123 million and Zillow got 29.3%, Trulia 18.7% (combined 48%), Yahoo!Homes 16.3%, Realtor.com 14.6%, and RedFin 4.9%. The remaining 10 had 16.2% of estimated visitors combined. How ever you count visitors, clearly Zillow+Trulia will be the giant that captures most of the property search “leads” out there.
What’s the “Little Guy” to do?
The answer lies in a comment by Zillow CEO Spencer Rascoff in an interview with RE/MAX’s Dave Lininger in late August after the Zillow+Trulia announcement in late July. Rascoff noted that out of the $12 billion a year agents spend on property advertising and marketing, only 4% is spent with Zillow+Trulia in online advertising. As Rascoff pointed out, 96% of agent marketing is spent elsewhere, and mostly offline. (REAL Trends estimates the real estate marketing pie at $6 billion annually, according to the Wall Street Journal.)
How exactly can the Little Guy beat the giant portals to prospects?
The one-word answer is: Pre-Leads.
The secret to survival before the “Zulia” deal closes sometime next year – and after – is for local agents to work their local databases harder and smarter than ever before. Pre-leads are early-stage local people who need a lightning-quick response to their inquiry from a local agent to buy or sell, as contrasted with a virtual website visitor.
Where do agents find pre-leads?
Pre-leads are simply past clients, sphere, and local prospects agents already know – or want to know in the case of expireds, FSBOs and targeted farms. Connecting intelligently to all three local databases simultaneously is the key. When agents work their (1) Postal Database where people live (address, city, state, zip) and their (2) Email Database where people communicate (via email), and their (3) Social Networks (where people share viral referrals) the Little Guy can beat the giant portals every time to “pre-leads” – local people who are most likely to buy and sell with the agent.
The essential technique is to “fish upstream” because that is where the fish are hungriest. The secret is to connect with local prospects before and after they click on the listing portals to see homes for sale. And, click they will. Don’t get me wrong. Refreshing a database with new buyer prospects is certainly smart, and, after all, some buyer prospects will have a home to sell too. Capturing buyers from home search registrations is what the advertising portals do best…just like the duty desk captured calls from classified advertising back in the day.
Focus on People, Not Property
Capturing early-stage prospects – or “pre-leads” – will be even more valuable to the most successful Rainmakers tomorrow — as the advertising portals siphon off more buyer search leads.
After all, generating hyperlocal pre-leads is what the Little Guy does best. How? The little guy has local fingers on the smartphone and local shoes on the street to help local sellers learn the true value of their homes and help local buyers negotiate for the dream homes they saw online.
Nobody engages local prospects better than the Little Guy. Nobody guides their buyers and sellers every step of the way through closing better than the Little Guy. No listing portal can compete with that personal relationship. To specialize in people — not property — successful real estate agents must work the only target that is truly valuable: the customer.
Simply put, agents must focus on local pre-leads who rise out of the people they already know. Work your Postal Database, your Email Database and your Social Networks together and you’ll catch a boatload of local pre-leads every time before the giant portals get a chance to sell the “leads” back to you.
First published in REALTrends News, October 2014. To see article online or download PDF click here.