It’s interesting to see how many people weigh in on the debate to force registration on your website’s real estate IDX home search. You hear one side cry out to set the Internet free while the other side argues the importance of capturing more of your hard-earned website traffic as leads. I have my own opinion on this issue and with my 20 years of experience specializing in lead generation, lead conversion and lead Management, I like to pretend my opinion matters. More important than my opinion, I have tested both theories in great depth, spending $15,000 and have a more scientific conclusion to this debate.
Let’s first look at each side of the debate to gain a better understanding of each and the value they bring.
ARGUMENT- Capture Your Hard-Earned Website Traffic As Leads – Force Registration!
The argument makes sense given the fact that most visitors will NEVER register if they are not forced to. If you truly understand the life-cycle of an Internet home buyer then you will understand why they will not register voluntarily… at least not without some significant motivation or incentive. Where this argument falls flat is when you step back and look at the percentage of bogus leads that are created and the wasted man-hours determining that they are garbage. The bogus leads are not always as easy to identify as “mickey @mouse dot com”. Then there is also the point that visitors who refuse to register will simply never come back reducing your overall website traffic significantly. Still, despite the number of bogus leads, good leads are still generated and you will still close a few deals which is the whole reason we even bother driving traffic to our website.
ARGUMENT- The Internet Must Be Free!
On the opposite side of the debate is the argument that the Internet must be free. Their argument’s strongest point is that if the largest real estate sites online, like Zillow, Realtor.com, and Trulia are free, then why would anyone want to register on a small local site. Or rather, why register for something that you can get free elsewhere? This argument is very hard for many people to accept. If you are only receiving a few hundred people to your website each month and paying dearly for it, how can you be sure they will register when they are ready? That’s a huge risk for anyone to take but don’t worry, I have already taken that risk for you… to the tune of $15,000.
So what’s the answer? Who’s right? Unfortunately the answer is not as simple as A or B but I can give you the formula needed to gain the greatest lead generation from your website efforts. Let me begin by explaining how I tested and achieved my results.
In the beginning, like almost every other real estate professional with a website, I was nervous about leaving my website traffic to fate. However, unlike most agents, I decided to run a test to determine the best scenario. I started out with a 3 month budget of $5,000 per month. My site was brand-spanking new so the only traffic I received was through PPC from search engines like Google and Bing (MSN back then). I ran the following three tests and tracked the micro-conversions.
TEST 1 – Forced Registration
I started my new site by forcing every lead to register for their home search during the first 30 days. The results were very close to what I had expected. I received 3,448 visitors at an average $1.45 per click of which, 7% converted into a lead. Of the 241 leads, 62% had a bad phone number but only 47% had a bad email address. That left me with 128 viable leads for my team to work. I waited 9 months to measure the return on investment (24 months would be a better measure) and found that we were able to convert 3% or 7 closings. I believe this is a reasonable number of closings from the viable leads. After all, at $44,140 in commissions, it paid for that first test many, many times over. Conversion rate was 3% and overall ROI was 783%.
The downside to this scenario is that (as I had expected) only a small handful of the people that bounced or refused to register ever came back.
TEST 2 – Free Home Search
This test was scary for me which is why I started with the forced registration. I wanted to make sure we had some leads to work and some money coming in just in case this second test failed to produce. During the second month we had 3,603 visitors (thanks to a little tweaking to our campaigns) of which less than .05% registered. Yes, you heard me, I had 18 people register. I still had about the same percentage of fake phone numbers since that was a required field but I had only 1 fake email address. Percentage-wise, that was an incredible percentage of real leads however the overall number of leads made me want to throw up. I felt sick for days.
Of the leads that we did capture, most registered to save their search or receive e-alerts of just-listed properties. Only one registered for more information on a property and as luck would have it, she was a Realtor that LOVED my map-based home search feature and preferred to use my site over the MLS system. She later became one of our agents so it wasn’t all bad.
The real question here is, how many people kept coming back to my site and eventually registered? It’s hard to tell since I was unable to track their IP past 60 days but during that 60 days, I didn’t have as many return visitors as I would have liked. Consider the following, unless they bookmark your site or your site shows up on the first page of their search term ALL the time, it’s easy to forget the domain name. Let’s be honest, how many times have you found a site you loved and forgot to bookmark it just to spend hours looking for it again? Needless to say, a “Free Home Search” was far from “free” for me. Ouch. On a side note, we ended up closing one of those leads at a $6,300 commission. RECAP- Conversion rate was 5.6% and overall ROI was 26%.
TEST 3 – The Hybrid Model
After that dismal second month, I was happy to start testing my “Hybrid Model”. I was originally going to start out with this model but I knew I could never be sure if it worked the best unless I tested all three and at a volume where the results could truly be measured. This model consisted of allowing the visitor to view a set number of properties or conduct a specific number of searches before asking them to register. I believed that if they saw the true value of my site’s search over other search sites then more visitors would register, even if they were forced to.
To my satisfaction the results were very good (though I think they could still be better). We had 3,821 site visitors of which 13% registered (more tweaking of course which increased the number and quality of visitors). Of the 496 people that registered, 65% had bad phone numbers but only 8% had a bad email address. That is a HUGE improvement for email addresses over the first test. That gave my team 456 viable leads to work and cut my cost per lead drastically (also known as acquisition cost). We closed 17 of those leads after 12 months for a total of $100,980. RECAP- Conversion rate was 3.7% and overall ROI was 1,919%. NICE!!!
TEST 4 – The Hybrid Model, 2nd Edition – Not Ready
I have one more model I would like to test but this will require building out our own technology. My idea is to use the Hybrid Model but not actually force registration. Instead, the registration box would pop up after viewing the first four homes and explain the benefits of registering but they could close it and continue searching. The registration/benefits box would pop up at other times during the visitors stay as well as encourage them to bookmark the site, as well as offer different benefit to registering each time it pops up. The site would include multiple offers such as eBooks, free reports, and insider information if they register. In the end, if they chose not to register then … I haven’t gotten that far but would like to.
What do you think? I would love your thoughts and opinions on how to improve registration and offer a better search experience. Have you tested any of these models and if so, what kind of success have you had?