How to Create Real Estate Opportunities Through a Marketing Funnel

In a previous article, we discussed the significance of targeting the right market at the right time to attract more clients, irrespective of market conditions. While capturing the attention of your ideal client is crucial, it's equally important to convert them into leads and close more deals. Below, we'll explore how to achieve this effectively.

Online lead conversion begins with a funnel
Developing a robust marketing funnel is essential for capturing your audience's attention and converting more leads.

What is a real estate marketing funnel?
A marketing funnel serves as a "digital destination" where you drive traffic in and obtain leads or scheduled consultations out. It's a mechanism that transforms your traffic into tangible opportunities for growing your business.

We believe every agent should have at least one, but ideally multiple, funnels.

The components of a real estate marketing funnel
At its core, a funnel comprises three main elements:

- Your offer (what you are promoting)
- A lead-capture mechanism (how you obtain contact information)
- A lead follow-up strategy (how you convert leads into qualified opportunities—actual buyers and sellers)

Let's delve deeper into each component.

The offer
An offer is what you use to attract your ideal customer and obtain their contact information. There are two types of offers: high-funnel and down-funnel.

Offers for down-funnel leads
Down-funnel leads are individuals closer to making a purchasing decision. In real estate, these are prospects who are ready to buy or sell a home within the next one to three months.

To attract down-funnel leads, you should promote offers that assist them in their decision-making process. These offers target leads in the "Consideration" or "Action" stage.

Here are some examples of offers for down-funnel leads:

- Complimentary home valuations
- Lists of homes available in specific price ranges or neighborhoods, or MLS searches on your website
- Co-marketing local home loan programs with your lending partners, offering special benefits
- Considerations for attracting down-funnel leads

When targeting down-funnel leads, consider the pros, potential drawbacks, and the best channels to reach them:

Pros:
These leads require minimal nurturing and have shorter sales cycles.
They can generate business in the short-to-medium-term future.

Cons:
Acquiring these leads is typically more expensive.
There's a smaller pool of available leads.

Best channels:
We recommend using Google Ads to target these leads effectively.

Offers for high-funnel leads
High-funnel leads are individuals farther from making a purchasing decision. These could be prospects who are not ready to buy or sell a home immediately and may require six to twelve months of nurturing.

To attract high-funnel leads, promote educational offers that are less sales-oriented. These offers target leads in the "Awareness" or "Interest" stage.
Here are some examples of offers for high-funnel leads:

-[City Name] Home Selling Guide
-[City Name] Home Buying Guide
-Considerations for attracting high-funnel leads

When targeting high-funnel leads, consider the pros, potential drawbacks, and the best channels to reach them:

Pros:
The cost per lead is generally lower.
You can attract a higher volume of leads, crucial for long-term growth.

Cons:
Most leads will not be ready to transact immediately.
These leads require long-term nurturing (between 6 months to 2+ years).
Best channels:
Leverage Facebook & Instagram Ads, and TikTok to effectively target these leads.

It's crucial to have different offers to cater to both short-term and long-term business goals. Start with a down-funnel offer and then add high-funnel offers as your business grows.

Once you've created your offers, it's time to consider how to use them to capture leads.

Lead capture for real estate
In addition to your offer, you need a way to capture leads' contact information in exchange for access to your offer. There are various methods for this, with setting up a landing page being the simplest. At Luxury Presence, we provide our clients with pre-built templates. However, if you're handling this yourself, many landing page builders are available.

While creating landing pages for lead capture is important, you also need a comprehensive website.

Lead conversion for real estate
On average, it takes nine outreach attempts to get a response from a lead. As an agent, you may not have the time to make nine individual attempts for each lead, so automating this process with your CRM is advisable.

Most CRM systems enable you to create short-term nurturing sequences, where leads are automatically engaged nine to twelve times over seven days after capture, without your direct involvement.

For leads that don't respond within seven days, a long-term nurturing sequence is recommended. This is where the majority of your online leads will end up, so it's crucial. You should expect to nurture most of your online leads for at least 12 to 16 months before they convert into a deal.

While some leads may convert faster, a majority will require long-term nurturing through email, calls, and texts. This is the most effective way to scale and maximize your marketing efforts.

Elements of an effective lead conversion sequence
Several key points contribute to an effective real estate lead conversion strategy:

- Speed to lead is critical—initial contact should occur within the first two minutes.
- All messages should be personalized to the lead.
- Messages should align with the offer type that generated the lead.
- To simplify this process, we've created a free Lead Handling Guide. You can download it by clicking the image below.

Lead conversion benchmarks
To gauge the success of your efforts, monitor several metrics regularly. Your lead conversion rate is a crucial metric. The National Association of Realtors® (NAR) estimates the average real estate lead conversion rate to be 0.4%-1.2%.

Other important metrics include leading indicators, which indicate your funnel's health, and lagging indicators, which reflect your results. Here are examples of each:

Leading indicators:

- Lead response rate—the percentage of leads that respond to outreach
- Appointment booking rate—the percentage of responded leads that schedule consultations or listing appointments
- Close rate—the percentage of consultations that result in closed transactions

Lagging indicators:

- Cost per lead—the number of leads divided by the total campaign cost
- Cost per appointment or consultation—the number of conversations with leads divided by the total campaign cost
- Cost per client (cost of acquisition)—the number of clients divided by the total campaign cost

Initially, your cost of acquisition should be around 30%-40% of your total commission. For instance, if your commission on a deal is $10,000, your cost to acquire that deal should range from $3,000 to $4,000.

This cost should decrease over time as you implement an effective lead nurturing process.