Editor's note: This is the first of a two-part guest perspective series focusing on online lead generation. Part 1 explores the difference between a contact and a lead, and Part 2 discusses how to implement a long-term strategy for Internet-generated contacts and leads.

The Internet has influenced a structural shift in most real estate professionals' marketing mix. Whether you work for an independent or branded residential agency, it is becoming increasingly difficult -- and painful -- to ignore marketing your firm or yourself on the Web. From personal Web sites to sophisticated search-engine marketing programs, the sourcing of new business and clients is increasingly an online proposition.

What events are influencing this structural marketing shift?

Fueled by the average American's thirst for information and scarcity of time, the Internet is where the action is today -- in real time.

According to "Search Engine Marketing, Inc.," by Moran & Hunt, total Web users surpassed the 300 million mark in 2004, with paid placement advertising generating nearly $3 billion in 2005 and expected to grow to $5.5 billion by 2009. Naturally, real estate professionals are among those turning to the Web as a source of new business in the form of "lead generation."

Besides this volume of both bodies and dollars orbiting the Web, consider further that, according to the National Association of Realtors, more than 70 percent of those initiating the sale or purchase of a home begin doing so online. As of 2006, 72 percent of all Internet users in the United States have the use of broadband to access the Internet, according to Neilsen/NetRatings -- that's 103 million Americans able to quickly view and download large graphics files such as photos and virtual tours available in more than 930 multiple listing service databases across the country.

With the maturity of the Internet and the genesis of third-party "lead generation" Web sites, many agents and brokers are in a quandary as to which, if any, such vendors they should engage to increase their online marketing exposure.

That is not surprising. A recent Google search for "real estate lead generation Web site" yielded 9.3 million results. A vast labyrinth of Web sites and vendors await an agent's search in cyberspace. Eager to enroll real estate agents into their program for a fee with promises of "robust," "qualified" and "exclusive" leads, many of these vendors fall short of agent expectations for a variety of reasons -- not all of which are the vendors' fault.

So, what is an Internet or e-commerce lead anyway?

Well, let's consider what a "lead" is in the first place. According to the Merriam-Webster online dictionary, a lead or "prospect" is "a potential buyer or customer."

Chad Pinson, managing director of contact referral Web site HomePoint.com, states, "a 'qualified' real estate lead is a consumer who:


is likely to retain professional assistance from a real estate agent;


is qualified to consummate a real estate transaction because the consumer is:

Ready -- Will make a purchase or sale decision within 12 months of initial contact

Willing -- Either wants to, is compelled to, or must do the transaction

Able -- Has the legal and financial capacity to consummate the transaction."

With regard to the Internet and e-commerce then, what is a lead?

Many agents who enroll in online referral programs such as HomeGain.com, RealEstate.com, HouseValues.com, HomePoint.com and others are under the impression -- rightly or wrongly, depending on the vendor's sales force -- that every referral from such programs is a qualified lead. This is not necessarily so. Some programs offer pre-screened, qualified leads, but many do not. For instance, Lead2Realty.com prescreens subscribers' leads and charges between $30 and $70 per lead, depending on whether the lead is a buyer, seller or combined buyer and seller.

More often, such referral programs generate "potential" leads in the form of "contacts." A contact exists when a person searches real estate topics such as "sell a house in Green Bay" or "buy a home in Denver" at a search engine or portal like Google, Yahoo, AOL and MSN. A potential client (the searcher) then identifies and visits a Web site included among the search results to screen properties and consider real estate agents to list a home for sale or to assist in the purchase of a home. Typically, these sites require the searcher to enter contact information to gain access to the MLS database available through the given vendor's site. The operative term here is "contact information," not "lead information."

While it may seem a matter of semantics, the difference between "contact" and "lead" information significantly affects the value of the referral. A "contact" does not become a lead until some reliable system or some knowledgeable party "qualifies" the lead as described above. This is where many referral program Web sites disappoint their subscriber agents. They call contacts "leads," which sets an unrealistic or false expectation for the subscriber agent. So, when the agent subscriber responds to an e-mail "lead" referral and follows up with the potential client, only to have the person advise them that they just wanted to see what homes are selling for in their neighborhood and are not presently in the market, the agent subscriber is disappointed and often perceives the referral service as a poor resource for new lead generation.

Source:
http://www.inman.com/inmannews.aspx?ID=56148

It certainly is a new world for real estate agents, isn't it? Used to be, all information regarding homes for sale was like a little secret known only to a select few. Now, with the advent of online sites, it's all public knowledge.

Changes the playing field, for sure.