Evolution of Lead Generation Websites

Inman News blog today, I discuss why lead generation companies like HomeGain, built on Web 1.0 platforms, can't adopt interactive Web 2.0 features. Why? Lead generation companies make their money by introducing potential consumer clients to the agents, and thus must keep them separated until the agent buys the lead... Web 2.0 fosters direct communication between the agent and that client, and it dissolves the potential to charge the agent for access to that client.

Here's a simple chronicle on the evolution of consumer-targeted lead generation sites.

Lead generation 1.0:

Housevalues.com and almost all of the literally thousands of lead gen sites are no-nonsense - consumers are funneled directly to the quote form

Your request will be forwarded to a Licensed Real Estate Professional for processing.

Related article:
Why there are thousands of Home Listing and FSBO sites

Lead Generation 1.1:

HomeGain.com took a lesson from Lending Tree and Auto Trader, websites that claim consumers will receive multiple proposals from various lenders/dealers upon registration.

They tweaked the message to entice the consumer into giving their contact info:
  • Realtors... send you customized proposals
  • Agents do not see your contact information
  • No obligation, no pressure
Even with this more hands off approach, many consumers are still unaware that they become leads because HomeGain has set up a system that has consumers choosing among the proposals, but then will charge the agent to access that client who has decided on the choice.

Faux Lead Generation 2.0:

Google "free instant home value estimate" and HomeGain and Housevalues show up as top sponsored links. Their home valuation service is free, but not instant like a Zillow AVM... the consumer still needs to fill out the Quote form and wait for that lead-paying agent to contact them with their estimate. Note that even though Homegain provides a
free, instant AVM like Zillow's, clicking on the Google sponsored link above will direct the consumer to a entry screen that requires they fill out a Quote form, instead of their AVM site (see graphic below).

Reply, also a sponsored link, forces the consumer to enter their basic contact information (which I'm assuming turns into some sort of lead) and wade through two screens touting mortgages and cars before finally delivering a Zillow like estimate.

Related articles on lead generation:

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  • 6/8/2007 8:29 AM David Bethoney wrote:
    All of these agent lead generation sites need to adapt to the environment if they are going to be successful in the long run. As full service agents begin to compete with discount brokerages like redfin, one way by lowering their commission slightly, they are going to be less likely to give away additional dollars to what has proven to be unqualified leads (at least that's what agents tell me when I speak to them). I think a great valuation model is one that Coldwell (onboard) employs. Give consumers access to the free automated valuation estimate, but then offer to the consumer a professional appraisal. This ensures the unique characteristics that can't be captured by algorithms are taken into consideration.
    Reply to this

  • 6/8/2007 9:23 AM Agent Scoreboard wrote:
    good post... back in the old days when I was the CTO of help-u-sell, we realized that listing data alone was becoming a commodity and that unless we could be the first or best at having all the properties (FSBO, IDX, Builders, etc) on the market in one place our website was just like everyone else’s...

    People are not stupid and home valuations and "free REO" lists don't mean they want to sell your buy. I wrote a post on my blog about how lead times have increased over the past ten years and how most of the leads we get from the internet are garbage.


    I've personally used both Homegain and HouseValues and they were, in my opinion, a waste of money.

    Agents need to understand there is a difference between someone who is looking at houses and someone who wants to buy a house and how to tell the difference.

    This was part of the reason we built Agent Scoreboard, we knew that people who are on an agent ratings site are "in market" what other reason is there to be there? Incubation times should be lower and the ability to measure ROI would be simple and justifying the marketing spend would be easy.

    I think most consumers are smarter than the lead generators and ultimately resent being funneled into someone else’s inbox. We should figure out a better way of attracting "in market" leads...
    Reply to this
    1. 6/10/2007 10:41 AM REALonomics wrote:
      The most significant statement in your comment is " think most consumers are smarter than the lead generators..."

      That's the heart of the issue. The RE industry's penchant for leads versus consumer relationships in a transparent relationship is obvious.

      Consumers are no longer willing to be duped into fickle relationships with short-sited real estate professionals who lack the long term fortitude to build consumer-centric relationships and models. Information is too easy to access and teh idea of registering or submitting personal information in exchange for service is loosing ground.

      Donald Teel - Founder
      Reply to this

  • 6/8/2007 9:23 AM John Schroeder - Waunakee RE/MAX Preferred Realtor wrote:
    As technology becomes easier to implement for REALTORS it would seem that it would be harder for these companies to survive. National Brokerages are already doing this with some charging a % and some doing it for free.
    Reply to this

  • 6/10/2007 9:49 AM REALonomics wrote:
    Lead generation is the real estate industry's appetite for self-serving instant cash flow gratification. In short, it's a reflection of the lack of transparency the consumer desires and instead is a mirror image of the business models erected by the RE industry during the past 50+ years.

    Consumer-centric models are emerging and are characterized by peer-to-peer relationships in local markets where consumer can dialogue with residents. Take a look at www.CityBlogUSA.com and see what e-Partner has done in 30k cities through resident platforms that allow consumers to get real-life dialogue with local residents.

    The RE industry's transformation is underway, but will out operating models line-up with the consumer who wants freedom, information and selective relationships.

    Lead gen and consumer registration are waning as the residual "smoke and mirrors" that has always been detested by informed consumers. Those Web 2.0 companies that open the conversational flood gates will be the long term winners. It will take some time because resistance within the industry is the gravity of complacency.

    Donald Teel - Founder
    Reply to this

  • 6/11/2007 7:02 AM Douglas Trudeau wrote:
    Louis - Thanks for the information. I have been using HomeGain for several years. Since learning blogging a few months back I learned how to tie in, via HTML, my website and relevant blogs to my point potential buyers and sellers to my site and enhance my chances of them selecting me.

    I and also using ActiveRain to make my presence felt. Zillow and Trulia haven't produced anything. The Trulia Voice has been a disappointment with no real leads.
    Reply to this
  • 6/12/2007 6:52 AM Keith Jeppson wrote:
    Like others commenting, I've used homegain, househunt, and currently mlsonline. The leads are primarily garbage. Most are bogus names and contact info. those that are legit are usually curiosity seekers and not active buyers/sellers.

    Regardless of the evolution, they are still not worth the money.
    Reply to this
  • 6/12/2007 8:26 AM Incredible Agent wrote:
    As a lead generator(web 1.0) and a web 2.0 junkie, I have to say that I agree with Louis Cammarosano from HomeGain. Let's face it, we're all in this business to make money. It seems as though agents and brokerages are welcoming the changes to the lead generation model, which are regressing to simple ad impressions and zero guarantees for success.

    Yes, the current lead generators are not as "transparent" as the web 2.0 companies. But what does that mean for the business of agents and brokerages? Basically, it means that they better have their own lead capture model on their site or they will be throwing their money away faster than they did with the lead generators.

    The lead generation (web 1.0) companies are capturing the business for the agent and are making sure they get something for their money. Advertising is the ultimate non-committal business model. The current 2.0 models don't even offer guarantees of traffic, only impressions.

    Overall, my point is simply that the web 2.0 companies have to develop a better value model if they want to grow their revenue to the size of the web 1.0 companies.
    Reply to this
    1. 6/23/2007 6:07 PM Louis Cammarosano wrote:
      Thanks incredible agent

      Its alway easier to respond to posters who agree with me!

      What I find most interesting is that these web 2.0 supposedly are giving the consumers transparency and a more pleasant user experience which should have consumers flocking to these site.

      Zillow however hasn't grown traffic in more than a year.

      More harmful however is the quality of
      the visitor to zillow can't be as compelling to the realtor advertiser as a lead from Homegain

      Afterall Zillow's site is populated by users who are looking up the "value" of their neighbors' home or those of celebrities-not exactly a target lead.
      Lots of impressions though...

      HomeGain's web 1.0 approach is less based on entertaining its visitors and more interested in attracting consumers who are looking to engage in a real estate transaction (either buying or selling) and need to find a realtor to work with.

      We also have a homevaluation tool-had it well before Zillow back in 1999-2001 on our site
      ou can view it here http://www.homegain.com
      Note we encourage the user to get a professional cma.
      Reply to this
  • 6/13/2007 9:08 AM Agent Scoreboard wrote:
    There is the myth that listings create "leads" people are looking at listings so they must 1) want to buy a house 2) what my services to help them buy that house 3) what to give up their person information just to look at pictures and listings of home.

    Those are the assumptions of 1.0, They are mostly ridiculous. 2.0 assumes that someone asks the question, How can I buy a house? or Who is the best person to help me buy this house? The model is to distribute the questions to community and charge to participate in the community. It lowers your overall cost of a lead based on your participation in that community. The more you contribute, the lower the cost. As it should be an equitable distribution of resources. (god I almost sound like a communist) People want to look at houses, for 1000 different reasons, when they are ready, they want to talk to agents. Thats how the consumers wants it. Why not make it easy and non-committal to talk to an agent at anytime? Why should asking a real estate person a question mean giving up my personal email and getting 52 weeks "Jim's Newsletter" chock full of carrot bread recipes and "how you know if you have termites" or "50 steps to the perfect shrub", I don't care about that.
    Reply to this
  • 10/9/2007 2:40 AM Andy Piper wrote:
    If you want all the leads you can handle, develop a compelling Web presence where people can find out about your area, you, your listings and how you work with buyers and sellers in your real estate market. Make it personal and unique to your style. It can be a blog or a content management website - doesn't really matter. Once you have a strong website that is well ranked in the search engines - Then drive people to the pages that are most relevant to their search, either through pay per click, or home gain etc. It costs money and takes time. Do these things and you will generate plenty of quality leads.
    Reply to this
  • 8/13/2008 7:11 AM Lead Generation Web Site wrote:
    The reason why site visitors don't subscribe because they are afraid that the site will only get an information from them and sell it. Giving free chapters of the book or free sneak previews to information products including software, DVDs, CDs and MP3s will help increase the sales leads. This tactic will overcome your prospects' fears of the unknown and people will get hooked and buy the products.
    Reply to this
  • 11/10/2008 10:26 AM Real Estate Lead Generation wrote:
    CMAs are definitely the way to go for people looking to find their house worth, and lead gen companies provide that link between home sellers and agents. Some services these days provide a CRM tool along with their lead generation services that can be very beneficial to the agent.
    Reply to this
  • 11/10/2008 10:28 AM Real Estate Lead Generation wrote:
    CMAs are definitely the way to go for people looking to find their house worth, and lead gen companies provide that link between home sellers and agents. Some services these days provide a CRM tool along with their lead generation services that can be very beneficial to the agent.
    Reply to this

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