Understanding online lead generation in the age of AI
A new study from T3 Sixty and PrimeStreet surveyed brokerages on their lead-gen practices and use of online and AI tools. The latter has produced mixed results.
Key points:
- While online leads make up a small percentage of transaction volume, social media and company websites are the most effective tools for lead generation.
- Agents also are willing to pay a steep referral fee, upward of 50%, for “transaction-ready” opportunities.
- Interest in AI products appears to be split, with larger companies showing the most interest, while smaller companies don’t see as much of a need for it.
Lead generation is one of the cornerstones of real estate sales, and an aspect of the job that many agents spend a lot of time on. And while the internet has changed the way consumers buy and sell homes, it's also completely changed the way agents do business.
But how effective are leads purchased through the big real estate search portals? And what's the deal with AI chatbots? What are the tools and methods that the most successful agents lean on?
A new study from T3 Sixty sponsored by PrimeStreet seeks to answer these questions and more as they relate to lead generation success. (Note: T3 Sixty and Real Estate News share a founder, Stefan Swanepoel.)
Social media and agent websites are still important
Out of the many ways to seek leads online, agents said 25% come from social media, while another 25% come from their websites. The home search portals were weighted far lower, with agents saying that just 7.5% of their online leads came from Zillow, 9.2% from Realtor.com, and 5.2% from Homes.com.
"Third-party sources such as Realtor.com and Zillow accounted for 11% or less of a brokerage's online leads, underscoring the relatively minor role major real estate portals play in the brokerage lead generation ecosystem," T3 Sixty researchers wrote.
However, it's also important to note the majority of brokerages surveyed said that fewer than 10% of their total sales volume came from online leads. And only 21% of brokerages said online leads made up more than 26% of their overall sales volume.
Agents are willing to pay big fees for successful leads
When tracking lead success and lead sourcing, the study found agents and brokerages are not only interested and willing to outsource lead gen, but they're willing to pay handsomely for the service.
The study found that the vast majority of agents, or 77.4% of those surveyed who are willing to outsource, "are comfortable paying a referral fee up to 20% for a self-generated, transaction-ready opportunity."
Another 17% of those surveyed said they would be willing to pay a referral fee between 21%-30%, while only 5.7% said they would be comfortable paying between 31%-50% for a "transaction-ready opportunity."
What about using AI tools for lead generation?
While numerous brokerages and tech platforms have rushed new AI-powered products and platforms to market in the last 24 months, there appear to be some mixed results and feedback on the use of these tools.
Fewer than half — or 47.2% — of those surveyed said they were "very interested" or "extremely interested" in using AI in their lead generation and conversion strategies, the report found. And AI chatbots are less commonly used than live chat, even though results appear mixed with live chat.
Interest in and deployment of AI seems to follow a trend, however, with bigger firms having a more positive view toward AI, while smaller firms are less interested, T3 Sixty researchers found. But that likely comes down to costs, as smaller companies, "particularly those with fewer than 50 agents," may either not have the resources or "perceived need" for AI tools and assistants.