In the last installment, I discussed website basics.  I intentionally left off one part of the typical website: the capture mechanism or gateway.  Some call it the form or registration page, but whatever you call it, it is the most important part of your site.  As far as I’m concerned, it is more important than the website itself.  Yes, I really said that.  Let me repeat myself: It is more important than the website.

I’m always amazed when I’m told by veteran agents — agents who are otherwise intelligent and successful in every area of their practice — that they would never put a capture gateway on their website.  I look at them stunned and ask, “Why?”  The answer is the truly shocking part: “Because many visitors would leave and go to another site.”

Now do you see how ridiculous that statement is?  What difference does it make where they go if they are not going to you?  I say good riddance!  Get rid of the free-loaders.  If they are not willing to identify themselves to me in exchange for looking at MLS listings on my site, then I say they don’t qualify to work with me.  I’m not running a charity website.  I’m not a free source of information and services.  Most agent websites today are like a department store without a cash register.  Imagine if Walmart filled their store with all the merchandise that the typical shopper wanted and then opened their door and let anyone come in and pick up what they wanted.   I bet they would have more visitors that way.  But how much more sales would they do if they installed cash registers at the front of the store?

Unless you are running a real estate charity, you need to think about your “store”.  Your lead capture gateway is your cash register.  I’m not saying that your website should charge cash, but there should be an exchange of value.  You give the customer free access to all the inventory in your market, as well as other valuable information, and they give you something in return: their contact information.  And just like large retailers such as Walmart continually study shopping habits of their customers, you should be studying the shopping habits of yours.  You can bet that Walmart knows exactly where to put the cash registers.  They know exactly how many to install.  They even know what merchandise to place around the register to maximize sales.

That’s what our company does — it’s why we exist.  We’ve made a science of learning customer online shopping habits, and we continue to test preferences every day, in real time.  For example, we are currently testing a new version of our LCM (lead capture module) and so we are routing a third of all of our traffic through that new gateway design.  We learned in yesterday’s test that we have discovered a way to improve lead capture rates by a substantial amount.  So far our margin of error is 3.479%, so we are continuing to test, but by tomorrow we will know within a 2% margin of error.

What does that mean, practically speaking?  In this case, the difference is significant:  31.1% capture rate from our new design versus 25.7% average capture rate for the same period of time from our current LCM gateway.  That means that we can reduce our agents’ advertising cost by 21% with this new version if the testing proves to hold consistent.  That means that we can reduce the average lead cost for our agents from $4.16 to $3.29!  If so, this new design will be a huge breakthrough for us.  We’ve been working on this new design for months, and we thought that if our estimates were correct, we could bring aggregate national lead capture rates for our technology users from 25% to over 30%.  It looks like we exceeded our expectations.

So how did we do it?  In this case, there were a host of changes, although most were not visible to the customer.  We changed the way the browser processed the form, we changed the way the site inserted the lead into our database, and how we notified the agent of his or her new lead.  We made only a minor visible change to customer pathway, and we didn’t change or eliminate any of the information we were capturing.  And the net was a 6% increase in CR or an improvement of 21%!  See, it’s a science.

If you are an agent with a typical real estate website your capture rate (according the the latest numbers released in the National Association of REALTORS® 2007 Member Profile) is only 0.87% of your visitors.  Here is the data:

• A full 60% of all 1.3 million REALTOR® have websites - nearly twice as many as five years ago.
• There are 780,000 real estate websites and 7.5 million homes selling (15 million transaction sides)
• There are 19.23 transaction sides available per real state website!
• There are an average of 462 website visitors per real estate website
• Despite all of this opportunity, the typical REALTOR® receives a mere four inquiries from their Web site accounting for only 3% of their business.
• On average, real estate websites capture customers at a stunningly low percentile of all vistors — at a rate of 0.87%!

What if you captured 25% instead of 0.87% of your website visitors?  Instead of your typical website lead costing you $116, it would now cost you only $4.16!  Imagine what that could do to your advertising and marketing budget?  That single move could have a financial impact on your business of literally tens of thousands of dollars.

So how do you go about installing efficient lead capture on your website?  First, if you don’t do anything else, just turning on your registration form in the customer path before the IDX link will be a step in the right direction.  Next, you need to decide to either build it yourself or find a good solution from a third party.  Feel free to look at our solution while you are at it — our LCM gateway technology works with or without a website, and it requires no setup or elaborate installation process.  Any solution you look at should pay for itself in 1-2 leads.  If it doesn’t, keep looking.  Don’t be fooled by fancy bells and whistles.  Remember Google.  Customers prefer simple.

Finally, I’d like to share a word about DOJ/NAR compliance.  I’ve recently written an article about the new settlement between the US Department of Justice and the National Association of REALTORS®, and our company has studied the impact of the new settlement agreement on our agents at great length.  After consulting with our attorney and spending two days on the phone with the DOJ and NAR attorneys, we’ve come away with an unpopular opinion on the subject of compliance.  I’ve had several patronizing and insulting emails from leaders in our industry about our position, but at the end of the day our agents will not run into compliance problems, even if others do.

The problems all come down to the interpretation of the term “VOW” or virtual office website.  In the grand scheme of things, it’s clear that companies like Zillow, Redfin, and Zip Realty are the ones the NAR was targeting in protecting the listings, and not individual agents offering IDX links on their websites.  But the simple fact is that the actual settlement documents define a VOW (for the purposes of the agreement).  In the agreement, any website that offers listings (MLS or IDX) to the public is considered a “virtual office website”, even if they don’t attempt to establish a formal relationship with the customer.  It is a widely held opinion that those agents with IDX links and that don’t attempt to capture customer leads will likely not be targets of enforcement, much like drivers who drive 60 in a 55 mph speed limit, but they are clearly required to be in compliance according to the agreement, and adding a lead capture gateway decreases the risk of compliance enforcement.

Nevertheless, as a company who licenses technology to over 14,000 agents worldwide, and whose business is the efficient capture of customer data on behalf of agents, we felt it was necessary to teach agents to comply with the letter of the settlement agreement.  We even put our money where our mouth was, and offered a fully DOJ/NAR compliant gateway free of charge to any agent that wanted it.  The reason I mention the subject of compliance while I discuss installing efficient lead capture technology on your website is that it would be wise for you to make sure that any solution you look at be fully DOJ/NAR compliant.  It doesn’t cost any more to do it properly.

In the next and final installment, I’ll be discussing putting it all together into a seamless online marketing strategy, and we’ll discuss making the decision of either buying or building your lead capture technology.  Finally, if you’d like a free thirty-minute one-on-one online marketing evaluation, by one of our experts, click here.   We would be happy to help any reader out with understanding online marketing and lead generation in detail.  Don’t worry, no salesman will try to pressure you or sell you anything.  Go ahead and let us check out your online marketing — it’s free with no strings attached.  We will likely find a few places to save you money or increase your results.