conversion rate lead to sale

[webmaster]

I am having a discussion with one of my long time (and top ranked) clients about lead to sale conversion and trying to figure out what a bad - decent - good and amazing number should be.

Now my client admittedly cherry picks a bit (no registration etc) and we always go back and forth on that one. But I am trying to make the general statement that with good follow up on valid leads (meaning a real first and last name and either email or phone) you should be able to convert at least 1% lead to sale.

He seems to think I am to optimistic (in this market)

So I am asking you folks - what do you think a good closing % is (closed deal from valid web lead with real info)

When you answer by honest with yourself (and us) in terms of how you would rate your "current" follow up system as well.

Is it "bad" "decent" "good" or "amazing"

inquiring minds want to know (or at least talk about it)

[RESteve]

5% has always stuck with me. Out of 100 web leads, with valid email address without a phone number, I could convert at least 5 to a closed transaction. With a valid phone number, I think that number should be higher.

I've always felt that this area was tough to keep an eye on, simply because there weren't tools available for me to easily do it. The REW lead manager is definitely a step in the right direction, and with enough custom work time, I think we could easily make it track conversion ratios like we all need.

Nonetheless, keeping track is really tough in my opinion, but I feel 5% is a good number to initially shoot for.

[papaul1621]

IMO, 2% or 3% is a good closing percentage and anything higher would be amazing.

[OCTeam]

All the BS aside, I'd like to know who is really converting 5% if they are getting 20+ leads a day. And, how many does it take on a team to convert those 20 leads to 1 sale a day if you don't have attorneys handling the transaction.

I happen to agree that "in this market" (ours is predominently short sales now) 1% would something to shoot for and in reality should be possible if the stars aligned with the planets correctly.

Our follow up is decent (we try to call ever lead within the day or preferably within an hour), but it will become amazing once we get the calendar module.

[RESteve]

NAR (it was the California Assoc of Realtors actually) released a study that showed that nearly 50% of leads that left a number, or wanted to be contacted expected a call within the hour.

EXPECTED.

Of that, the rest needed a call within the day. Hell, I think half that wanted it within the hour expected it to be instant.

Update: Found it:

If there’s one factor that sets Internet lead cultivation apart, it’s the imperative of a rapid response. According to the CALIFORNIA ASSOCIATION OF REALTORS® 2005 Internet vs. Traditional Buyer Study, 21 percent of Internet buyers expect a real estate sales associate to respond instantly to an inquiry. Another 23 percent expect a response in 30 minutes or less. Yet a mystery shopper survey of practitioners commissioned by REALTOR.com in August 2004 found that only 27 percent of practitioners responded within eight hours to an inquiry at REALTOR.com. A whopping 46 percent of inquiries received no response at all. http://www.realtor.org/archives/feature1may06

The speed at which you follow up matters alot when converting leads online. I think that attention this this right away could increase your ratios immediately, OCTeam. The quote above was from 06' too - I'd imagine that those numbers would be even more imperative three years later.

But my 5% is more of a "aim high to hit the mark thing". If I strive for 1%, I'll get 1% and I'm not satisfied with that.

[OCTeam]

I think that attention this this right away could increase your ratios immediately, OCTeam.

Steve, I agree entirely. However, the problem arising when you have the three team members over the weekend showing properties and writing 6 offers between them.. and they can't follow up on the new leads when they are with clients. And, I really don't want more on the team.

[RESteve]

And, I really don't want more on the team.

Ah, see I was going to suggest a lead conversion specialist until you said that. I honestly think a position like that can certainly pay for itself.

In regards to rating a follow up system, I would say mine is "fair". I haven't perfected using the REW Lead Manager (I'm getting there), but I think you'll have to master a system of using the REW and TP8i to achieve some great results.

[AugustaREGroup]

Would another point to consider be number of leads, as well as, number of leads to population?

Reason I mention this…

When you are analyzing a lower ranking web site (such as p 2-3 for “city real estate”) would they (my guess) experience a higher conversion ratio? With a website like this might capture more leads with well placed/meaningful blog posts, online community back links, personal emails, etc. While the low ranking example might have a higher conversion ratio… the site has much lower visitor/lead numbers.

Sites such as Orange County, CA real estate and Sarasota real estate's one percent might trump a lower ranking website’s five percent.

Is this safe to say? (this post was more of a question than a revelation)

[RESteve]

If we start dwelving into including population, densities, etc. we're beginning to compare apples to oranges (there's no way to compare cities with one another at that point). If we don't establish a common demoninator, if you will, as a community we won't be able to establish a system for converting online leads.

I think that common factor is already here, and that's visitors to registrations to meetings to written to closing. A buyer in Houston is the same as a buyer in Tulsa; they have similar driving factors to researching homes for sale online.

Aside from that, I have a strong belief that real estate is a numbers game. You'll going to achieve great results with amassing a large amount of leads; that's a problem everyone wants to have (well, at least I do).

[NORCAL wholesale]

Our lead conversion for our "I Buy Homes" campaign is about 1 deal in about 150 leads as of about 9 months ago; unfortunately the number has risen because of the fake leads that we've received over the last 6 months....