One of the phrases that we hear in the industry is "lead with revenue." I'm fortunate to have had a reasonable amount of success with lead generation, primarily over the internet.

Two strong prospects called and left messages while I was out Saturday with buyers. I followed up with them and converted them into clients. In addition, three different people called my voicemail without leaving messages. I returned the call to the numbers captured hours later and one of them completed loan apps at my lender's site, I'm following up with another today, but could not reach the third person. There were also leads left at my site that I'm working that came in while I was out showing houses. That was two or three strong leads and might have been four or five in one day, a scenario that repeats frequently.

I often wonder how many more leads could have been converted had I been available when they called or wrote. I'm thinking about moving toward a business model that focuses primarily on lead generation and referring out leads to others at a 25% referral fee payable at closing. I'd get the client approved through one of my direct lenders and then refer them out. I do, however, have concerns about the receiving agent taking the same level of interest in the client that I have. After all, this is my livelihood being entrusted to someone else and it will suffer if too many deals fell through because of lack of interest by the agent.

In addition to the online strategy, I'm thinking about presenting to the staffs of local employers about home ownership incentives, attending trade shows, distributing my newsletter and more. Frankly, there are other things that I could be doing to generate leads too, but buyers take up a good deal of that time.

I enjoy working with buyers, but need to get to the next level and I can't continue leaving money (leads) on the table.

What are your thoughts on this concept? How can it be made better? Is this the right time?

Greene,

In a way, this is exactly my business model, although I don't consider myself a lead generator. I hung up my license in May to focus on getting my next book out this fall, and interestingly have been somewhat slammed with leads ever since. Which, has given me the inspiration to create a more formal approach to drumming up business that I can refer out. The secret, for me, is that I MUST have referral sources that I trust 100% and am proud to refer to, since the majority of these incoming leads found me via my SOI or my blog... so they feel they know me and want to work with ME.

Like you, I'm great at converting phone calls to clients, and I'm also good at creating opportunities for people to contact me so I can convert them. So far, my outgoing referrals have been pretty successful - and I'm stepping up my efforts in that direction. Funny, it's almost more fun to figure out ways to generate business for others than for myself!

I also just created an agent-to-agent referral network for people who have read my book, drunk the kool-aid and agree to a client-centric code of behavior. It's going really well, too!

I think there's tremendous potential in honest-to-goodness referrals that focus on taking good care of the client. If you produce bona-fide leads and refer them to great agents, you are providing a service to everyone and should definitely be compensated.

As an agent I have purchased leads. I get calls all the time from lead companies. I refuse to buy them. When I talk to a lead company I now ask "Will you take the fee on the back end of the deal via the HUD Statement, you get paid when I get paid". They say no, I say good day to you.

So if I understand what you (and Jennifer) are talking about, its 25% fee after the fact, I'd sign up for that. I'd be willing to test it for you in Dayton Ohio.

I can generate leads all day long.When you hand them off the hard part for agents is they still have to massage that lead and many don't have a system or steps to get to closing.

Lead generation companies know this and even if they give them an awesome credible lead if they were paid at closing their business would be a crap shoot.

When you hand off the lead the ability of that agent to overcome objections,follow up,and get to closing comes into play.Also the fact that the split at their current broker will make a difference as well.

Imagine this as you hand off a lead at 25 percent.The agent receiving the referral is on a 70/30 split with a franchise fee of 5 percent. So they are at a 65 gross when it closes.Now after a referral of 25 to 30 percent they will be at 35 to 40 percent gross on the HUD at closing.

As soon as that referral gets hard and another buyer without a fee comes in they will lose interest.This is why you have to be selective on who you send to.

I was thinking of prospects in Georgia where most of my marketing is targeted and you are correct REO. I would get paid when they the receiving agent got paid. I just need to come up with some way of continuing to be involved, so that things move along as intended. Normally, however, handing off the lead also means handing off all control and that has been the main reason for my hesitation.

Super, there were a few times this year when I would have gladly paid the referral fee despite the company splits if it put food on the table, but I see your point (I did a transaction this year for $59K, the lowest of my short career). Of course, if an agent is able to generate their own leads, then this might not be of interest to them. But there are old school "list to last only" folks at my office who are losing their very nice homes who have already asked me for referrals, so I think there's an opportunity here.

The other thing is that the cycle time from initial meeting to the closing table has lengthened considerably (for me anyway), so it can't be turnkey. I'd have to move into this gradually, if at all.

Yep, I expect a fee only if there's a closing. Most of my SOI & blog referrals go to Denver agents (and I refer to just a few there), but the SWS Referral Network is nationwide. However, it's an agent-to-agent referral program (for now) so the bulk of the referral fee goes to the referring agent.

I do think that any agent can supplement his or her income by generating local leads to refer to quality agents who are better suited to handle that particular lead. That's what I'm working on for myself. Whether or not it can be a sole source of income would depend on a lot of factors, obviously. I know an agent in Florida who is a SAHM and generates about $5k/month in referral income without leaving the house. Big bucks? No, but it's perfect for her and her situation.

I am working on a system where I keep the lead until it matures into a buyer ready to make a purchase. Most internet leads won't do anything until some future date and I don't want to have to hire someone to track the leads given out against the sales to see if I am due a referral fee.

Thus, if I nurture the lead and then turn it over at the last minute there will be less checking up to do. Currently I have close to 5,000 people getting auto updates from the MLS and it is starting to get pretty busy.

I was thinking of doing this because I have a background in Internet marketing and would love to generate a ton of leads and refer them all to my colleagues that I work with but unfortunately I'm a rookie agent and that's surely a no go with my broker until I can prove myself.

It seems to me that this is a trend that is really catching on in some areas and with the ever increasing use of the Internet for real estate it's only going to become more common.

Ive been generating tons of leads for a while. The problem is finding agents who are reliable and follow up well. My biggest advantage over other agents has been my ability to get more leads faster.

Funny I posted a similar question about being able to track referrals.
But my referrals would be for rental properties and I would be sending the lead directly to the listing agent of the rental property. Do you guys think that would be easier to track.? what are some tips for tracking your referrals?