Should You Buy or Generate Leads in 2024?

"A CRM should never be an expense, it should be an investment".

This is how Greg Harrelson opens this week's webinar to the Real Geeks community, before he dives into one of the most common questions agents have:

Which lead source has the highest conversions?

Before we answer that question, consider that if you're not currently getting a return on your CRM, you might need some extra coaching.

This is where RG Mastery comes in. Greg's private community where he shares all the strategies his team currently implements to generate over 500+ organic leads every single month. Join for less than $200/month, and cancel anytime.

Now, back to our main question:

Which lead source has the highest conversions?

"I see this question all the time on Facebook groups." says Greg,  "Someone will say they have a budget of $1,000, and they'll ask what's the best source to spend that on."

Let's break this down, shall we?

Buying Real Estate Leads in 2024

There's no question about it – buying leads can get expensive. Especially if you have a team of agents working with you, and you need a large number of leads. 

So it makes sense that you'd want to know what the best channel is to spend your money on.

But guess what happens when someone asks this question online.

They get a hundred different answers.

"Don't spend a dollar on ads. SEO is the way."

"Never gotten better results than with Real Leads."

"Definitely social media. Leads there are convert much faster."

So, what's the truth?

The truth is it doesn't matter. Virtually every real estate lead source converts at a similar rate.

Now, that doesn't mean you should pick any lead source at random. While they convert at a similar rate, each lead source will have its advantages and disadvantages, depending on how you like to work.

Here's an example.

If you look at the people who are raving about Real Leads as a lead source, you will notice a very similar pattern.

They have a similar process for how quickly they call the leads once they're captured, a very similar frequency for calling them, very similar scripts that they text them, etcetera. 

The same thing happens for every lead source. 

Agents who say a certain source converts great all have a very similar process for working these leads. And agents who say a certain source is terrible also have a very similar process (or lack thereof) for working them.

And here's the one thing Greg keeps hammering about, that most agents don't want to hear:

"The agent who calls more is going to have a better conversion rate. This is a fact."

It's been studied and proven over and over again. If your process involves more calls than the next agent's, you're going to have a higher conversion rate.

You know this already. It's been true for decades. And it is still true in 2024.

Are All Real Estate Lead Sources the Same?

So, if success in this industry is so tied to our activities, are lead sources irrelevant?

Yes and no. Greg Harrelson believes there are certainly some lead sources who are famously low-quality. But they're in the minority.

"Most lead sources are going to convert over a 12 month period, as long as they're cultivating leads the same way."

And this is the caveat.

Some lead sources might be known for converting at a higher ratio, at least in the short term. And they might be famously expensive, too.

This is because the company's allocating more resources into finding these leads and pre-qualifying them for you. And this will be reflected on their price.

So, yes. They might convert faster than other sources, but they won't necessarily convert more.

It all depends on the game you want to play.

If you need leads to convert as soon as possible, because you have no other organic channel in place and are pressed for time, you might consider paying more for lead sources that convert faster.

On the other hand, if you've been developing your organic traffic through content, social media, and SEO, and you have a good lead nurturing campaign, and you've got a great referral program, then you can afford to spend less money on lead sources.

That's why it's so important that you're always developing these alternative sources of leads on your own, so you're not dependent on expensive external ones.

And this is exactly what Greg teaches you how to do in the RG Mastery community.

But let's assume that you'd rather pay more money for leads that convert faster rather than spend more time on generating leads.

There's plenty of agents who do this incredibly successfully.

They'll pay $400 per lead, and have a budget of $10k per month on external lead generation. And they're getting a return every month.

What's the secret? An extremely robust process for converting these leads.

They call the lead immediately. If they don't answer, they call them again. If they don't answer, they text them, they email them, and they don't stop until they get an answer.

The outcome is fairly obvious: their conversion rate is so high that they can afford to spend $10K a month on leads.

If this sounds like something you could do, then buying leads might be the perfect avenue for your business.

"Conversion is much more dependent on your process than it is on your lead source."

Generating vs. Buying

We've written several articles on organic generation of leads. We've even published a great talk with Roger Wakefield on how to leverage video content to generate massive amounts of organic traffic. 

You know our thoughts on this. Developing a content machine that continues to spit out potential customers every month and that grows exponentially is a core strategy for us.

But it doesn't need to be the only strategy you use.

"A great business will do both: generate leads, but also buy them." says Greg.

You never want to put all of your eggs in one basket.

Lead companies go out of business. The Google algorithm changes. It becomes harder to rank on a given social media.

These things happen all the time, so you want to diversify your channels to make sure you're always moving forward, even if one of these channels experiences a drop in traffic.

So, how many leads should you be buying vs. generating?

"In a perfect world you'd be buying no more than 50% of your leads, and generating the other 50% organically." recommends Greg.

Final Note from Greg

If we were to tell you that you can invest $100,000 on a piece of real estate, and in a year you'd get $175,000 back, you'd probably jump at that opportunity.

However, when it comes to buying leads, most people don't want to spend $1,000 to then get $4,000 in return over a year.

Where's the disconnect?

Greg believes the disconnect happens because the return on the leads depends on our efforts.

So, in this sense, lead source is irrelevant. Because most of your return will be dependant on your activities, rather than the specific channel.

The best lead source is going to be the one that works for you, depending on how you want to work.

And ideally, you want to be doing a combination of lead sources.

Invest some money on outsourcing lead generation and focus solely on building relationships and closing deals through a service like Real Leads.

Equally, invest some time on generating organic growth. This is where a coach like Greg Harrelson will be a key partner for you.

We hope this conversation was useful to you. 

Here's to a successful 2024!