Use paid leads?Here’s what you need to know about FCC changes now | Private Equity Weekly

Do you pay a lead generation company or portal like Realtor.com or Zillow to generate real estate leads? Do you look for strangers on the phone?If that’s the case, there’s a New FCC Rules It states: “No telemarketer may make or cause to be made any telemarketing call to a consumer without the express written consent of the consumer.”

The big question is how these changes will impact agencies, teams, and portals and lead generation companies that are often in the business of selling leads.

When I first heard about the express written consent rule, I contacted Curtis Fenn, who redx, learn how these new rules will impact not only REDX’s lead generation business, but also agencies, teams, and others who rely on the paid lead model. (Full disclosure: Since its inception in 2007, REDX has sponsored my Conference on Distinguished Women in Real Estate. )

Significant changes in the lead generation environment

Regulations on cold calling, do-not-call lists and automated dialing date back to Telephone Consumer Protection Act of 1991. The regulations were intended to address early problems with robo-dial systems, which were linked to computers and randomly assembled phone numbers for the system to dial. When someone answers the phone, they are connected to the telemarketer selling to them.

“These laws came into play because people were tired of being harassed by these calls. When technology changes so dramatically, a major challenge for regulators is addressing changes to these old laws,” Finn said.

“What they mean by prior consent is that you have to have an established relationship with the person before you can call them to solicit business.”

Since REDX removes FSBO phone numbers and expired “do not call” lists, I asked him how this would affect agents making future cold calls.

Finn started with an important disclaimer: “I’m not a lawyer, and I’m not your agent. Everyone interprets these a little differently.”

He then explained, “I think the interpretation of all of these things depends on your legal counsel and your broker and the risk profile they’re willing to take. I think the most important thing to consider here is to look at what the consumer really wants. ”

Part of the challenge is that the laws themselves conflict. For example, Finn said, the FTC website says you can call if you’re not soliciting or there’s an ongoing investigation.

“In the past five or six years, lead generation companies have exploded and portals have started to get into the lead sales business. While there have always been large lead generation companies, the number that have emerged in the past five years has been unprecedented for the industry. A huge transformation,” Finn said.

“The FCC rules now are that you can’t say to a leader, ‘Hey, do you want to contact us?’ and then go out and sell leads to 1,000 people.”

The next generation of real estate agents transforms their approach to leads

Finn describes a surprising new trend among young agents entering the real estate industry.

“New agencies come into the industry and say, ‘My lead generation budget is $1,000 a month. Where do I buy leads?'” Finn explains. “It’s a completely different mentality than in the past where people started building a library with family and friends.”

Impact on portals and agency teams

already April 2022Zillow then began removing agents from its Premium Agent Program and instead emphasized its Flex program.according to Zillow website,

“Zillow Premier Agents partners pay for voice shares in zip codes to gain contacts and leads in specific geographic areas. Agents who join the Flex program can connect with home shoppers in their service area without paying Zillow upfront. “

One problem with Flex is that when a Flex lead closes, agents pay Zillow a 30% to 40% referral fee.

Once this rule goes into effect in July 2024, real estate lead generation companies like Zillow, Realtor.com, and others that sell the same leads to multiple people will now face a huge shift in the way they do business.

However, the problem goes beyond FCC and FTC rules.

“Gmail now has new rules that take effect in February 2023, and so does Yahoo,” Finn said.

“They said we don’t want you to email people who don’t want to receive your emails. The whole idea is, you have to build a relationship with the people you want to communicate with.”

Stop renting your lead generation pipeline and own it

In light of all these new regulations, many of which are driven by consumer complaints, Finn has these key takeaways about how agents should approach potential clients in the future:

“You can’t rent someone else’s lead generation pipeline anymore. You have to start owning your own pipeline because that’s how you build relationships, rather than using a generic ad that says, ‘Check the value of your home,'” Finn said .

Finn urges agents not to deal with cold contacts and instead focus on creating warm leads and letting the people you contact get to know you.

The biggest impact of “written consent” will be on the agent team

Finn had an interesting take on how this will impact portals, and agency teams in particular.

“We typically advise new agents to join an agency team that generates leads for them. The written consent rule will make this more difficult, as both the portal and the team will have to obtain permission to communicate with people with whom they do not have a pre-existing relationship ,” Finn said.

For decades, the typical number of transactions in residential real estate has hovered around 5 million or 10 million. In 2023, this number dropped to approximately 4.1 million transactions or approximately 8.2 million square meters.

Finn then shared statistics provided by a spokesperson at a recent conference (which he has not yet verified), claiming that there will be 4.1 million transactions in 2023, with 4 billion leads sold.

This can become a major issue for agency team leaders, who often spend a lot of money on lead generation companies to provide leads to their team members.

“If a team gets leads from a third-party lead provider, the new written consent law could mean their team’s lead volume will be significantly reduced,” Finn said. His advice:

“Grow a referral-based business by working with past clients and your niche. The benefit of this is that you can call or text them without having to worry. That’s the advantage of having your own channel.”

Other solutions

Direct mail, door-to-door visits and open houses are still viable options. You can also contact others, including the owner of the expired list, but your strategy will need to change significantly.

When I returned to Los Angeles for training, several of our most creative agents would provide very detailed CMAs with detailed marketing plans to owners of expired listings overnight or in person. This method is expensive but effective.

Another solution is to use Facebook Messenger or LinkedIn messaging. As far as I know, you can only use it once unless the person you’re connecting with agrees to your friend request or LinkedIn invitation.

In terms of what to send, my suggestion is that you create an Equity Check (instead of a CMA, which almost every other agency uses).Equity checks include your CMA and detailed property report NARRPR.com (Realtor Property Resources, a free service provided by NAR to its Realtor members.)

In your direct message, you can mention that you have put together a 25 page (however long our CMA and RPR report is) equity check for their home. If they’re interested, ask them if they’d like to receive a link via text message or email. At this point, you now have an enthusiastic lead to reach out to because they asked you to send the report and provided you with their contact information.

This is an example of how to use “give marketing” or “attraction-based selling” to work in a new environment.

“Fishing” replaces “hunting” and “farming”

Finn describes “fishing” as a method of offering a service (bait, such as an equity check) and asking the other party if they would accept it. You can also use the Fishing/Attractions offer in your printed agricultural materials.

One proven strategy for maximizing responses and converting more leads is to use QR codes. When someone scans the QR code, you’ll instantly receive their contact information. What’s more, it only takes a few seconds for the person to get the information they requested.

Build custom audiences on Facebook and Instagram

Based on what Fenn’s most successful agencies do to generate leads, Fenn recommends that agencies with large databases (or who want to build a database using tools provided by their company) use Facebook and Instagram’s Custom Audience Tool. To use these tools, you must have a specific audience of at least 1,000 people.

according to Yuan“Custom audiences are Ad targeting options that allow you to find your existing audience across meta-technologies. You can create a custom audience of people who already know about your business using sources like customer lists, website or app traffic, or engagement across meta-technologies. “

Shopify has detailed Beginner’s Guide The steps required to do this are described.

Fenn shared the following example of how to enhance a video popular with contacts or other content and share it with a custom audience for about $2 per day.

“Let me give you an example, one of our clients was hosting an open house and she reached out to 1,000 homeowners near where the open house was being held. She posted a video of herself in front of her house and in front of a local landmark, said Finn.

“So, people watched her videos over and over again. The result was that when these people met agents at open houses, she kept hearing, ‘I know you don’t know me, but I feel like I’m seeing your business through Got to know you,” or “Wow, you really made one. There’s a lot of real estate business here. At that point, you have a warm lead to connect with.”

Finn’s last suggestion

Given that business is always changing, Finn strongly urges agents to stop renting a lead generation pipeline and start with past clients and their niche and work on generating their own leads. In this new environment, attraction is the name of the game. If you’re not already using fishing and attracting strategies, now is the time to integrate these methods into your business.