Why you should go local online

Trulia's recent alliance with REBNY has raised eyebrows on more than few real estate blogs. Reading opinions on Bloodhound Blog and FBS over the weekend reminded me of the same concerns about online lead generation that mortgage brokers like myself faced at the turn of the century. Big names like LendingTree are just the tip of the online mortgage leads iceberg. I get at least four unsolicited e-mails a day from lead companies I've never heard of trying to "supercharge my pipeline" from leads they gained through direct competition with me. Gee, thanks. 

Mortgage lead companies know very little about mortgages, and a whole bunch about SEO. The LendingTree model was so simple to duplicate that just about any code junkie that could build an online application and knew how to send spam was fully qualified to join in.  For most small mortgage brokers, marketing through search engine results was over before  originators ever considered it.

Here's an interesting exercise: Think of a small mortgage outfit that you may have worked with in the past, then try to find their Web site on Google without inputting their name. For many popular queries, you'll be lucky to find any actual mortgage companies on Page One results.

Ten years into LendingTree's launch, the mortgage leads industry has grown to a staggering size. Yet, there are now more mortgage brokers then ever before and average commissions are HIGHER today than a decade ago. The technology to effectively parse leads in the real estate world has been more complicated to harness. Because of this delay, real estate agents can look at how the mortgage industry approached the issue for some guidance. While the exact business plan of each mortgage company is a little different, those who have thrived do so employing a mix of two strategies.

The first strategy is to embrace lead generation. I resent what they are doing, and have a hard time with this one, but it's pretty simple. Pay for the leads, and then sit back as the business comes to you. Many brokers do well, and some never bother with ANY other forms of marketing. They look at lead companies like contract marketers. 

For those who can’t stomach paying the competition, the second strategy is to not worry about vast reach of the Internet and focus in the one place where a single sales person has the most leverage against national brands -- go local. For some brokers, this means optimizing their Web sites for the areas they work in. For others, it means not worrying about search engine results. They focus on referals from real estaste agents, accountants, and their spheres of influence.

A real estate agent's idea of local my not be local enough. I mean really local. Not a state, not a metro area, not even a single city. Go hyper-local.  Every real estate agent should have a prospect farm. You mail out newsletters to just these people. You focus much of your market analysis on the neighborhood. You might even walk each block, introducing yourself door to door. But hardly any agents bother to put that commitment online. Why? Doesn’t make sense to me. I've personally reviewed over 400 real estate blogs over the last couple months. Only a handful of them attempt to do this. I look at most real estate sites and see an all inclusive catch all net for Internet fishing. Thats a strategy that works for now, but why not take advantage of the unused Web hosting bandwidth you are renting to build a separate, hyper-local Web site or blog for your marketing area? The alternative is to let people from out of town, who know more about html code than real estate, set up as your competition.

--Todd Carpenter, lenderama

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