Lead generation is at least 2-3x cost of agent websites.
Written by Mike Carter on December 1, 2008
Last year, Rightmove made close to £57 million in revenue. Let’s assume that the bulk of this is lead generation for estate agents. Further to this, let’s assume that there are 7,000 estate agents spending an average of £4k per annum on their website. This gives us a conservative estimate of £28 million spent. Taking into account some agents spend a lot more than this. I know that Foxtons and Marsh & Parsons (2 big London agents) spend well over £100k per year on their websites. A lot of agents are also part of franchises and therefore a website is included as a central cost to the office.
Make a third assumption…. estate agents are spending on more lead-generation websites than just Rightmove. With most agents this is true.
This gives us a very interesting (if statistically questionable) premise that estate agents spend a lot more on having properties listed on websites than they do on their own ‘list’ also known as their website. This is a subtle point but one that is worth exploring. The question is why.
If you’re an estate agent reading this post, we would like to hear your comments on lead generation costs versus website costs, why the disparity exists and what you think you will be doing in the future to re-balance your particular situation.
December 1st, 2008 at 5:49 pm
it’s because just having a website isn’t enough to get traffic and business.
You still need marketing to drive traffic through a variety of sources. Even natural search which has always been considered ‘free’ now requires a significant investment of money and resources. Judging by the quality of most estate agents websites, they haven’t got this right yet.
The property portals are in a strong position as they can use the agents revenues to market their sites effectively.
They portal sites are usually a better experience than having to go to multiple agents websites to find all the properties in an area. Users will always feel that they might have missed a property from a different agent.
The portals have a much wider coverage of property than any individual agent which allows them to market more broadly. TV campaigns would never make much sense for any agent that works in a limited region.
December 2nd, 2008 at 10:43 am
Hi Chris
Some good points. I agree that portals are well positioned to have a better user experience so consumers can find a lot of property. However, I do disagree on two points…
1. Use the agents revenues to market sites effectively. This is exactly where agents go wrong. Learn a little about web marketing (yes, invest time and resource to it) and you’ll be able to market your site as well. Think content creation and conversion.
2. Having a website isn’t enough to get traffic and business. Again, this hits to the heart of the matter. You are assuming right away that you cannot build traffic and your ‘business’ without the help of portals? Untrue. Portals are just a way to provide additional leads to bolster your marketing efforts. Your website is meant to be your main lead generator long and short term. If it’s just a list of properties and a contact us page, you are missing the boat. As per above, you need to have content beyond this. Relevant, targeted and content built by you and your staff who are the experts and selling properties in an area. Put that knowledge online and watch your website grow your business.
December 4th, 2008 at 7:49 pm
I really like what you guys have done for the residential market. it’s making a difference to give agents different options other than simply using RightMove.
Our site is tailored for commercial premises only, check it out;
http://www.commercialroute.com
Nice work so far guys!
January 13th, 2009 at 2:56 pm
Very good point, it’s something that we realised quite early on - agents spend allot of money creating their own website so why not also work on getting more traffic to their site.
It seems amazing that agents can spend thousands on setting up their website that may not be generating as many hits as hoped.
We help to generate new leads, instructions and website traffic for agents listed.
http://www.EstateAgents123.com
July 22nd, 2009 at 4:29 pm
I disagree completely -
An estate agent spends money on having a website created, so that they can market their portfolio of properties.
The problem with this is two fold :
a) the cost of setting up the site on their own
b) the cost of having it hosted by a larger portal - so it gets hosted together with 50 other agents
c) to get to that little website, on page 62 of the google search engine, you need to first go through hundreds and hundreds of pictures on other sites.
The research I did before is started my website indicated the following :
a) most people looking for property today do so on teh web
b) 98% of people I spoke to, do not have the time to search through endless websites, in the hopes of finding the perfect home
c) they hated the fact that they needed to fill in a form, from each and every site, over and over again.
d) they disliked the fact that they had to fill in a form for more information, and would have preferred to email them directly
The feedback from my clients has all been around the
a) time saving element (one form, no trawling through the internet)
b) that their inbox fills up overnight,, and they can shop at their leisure - they do not have to have the same coversation with 5 agents over and over again.
c) the leads generated to our agents, guaranteed that their website will be seen (the leads they receive, they email the client, and the client takes the link directly to their site) (100% visability, versus a shot in the dark???)
This is turning into a real winner…. lets be honest here, the estate agent / home buying business model has not changed for hundreds of years… everybody still waits for the buyer to find them… in amongst thousands of websites on the internet…. crazy!
Times have changed. Is it not time, that us agents, went and found them…..
think about it….. we wait for the client, yet we make it almost impossible for him to find us…
that just does not make any sense at all.