The Science of Online Marketing (Part 1)

In June 2002 I got my real estate license and embarked on a brand  new career — selling houses!  I was excited.  I studied everything I could find.  I took classes.  I read dozens of books on real estate practice.  I couldn’t wait… and then nothing happened. Don’t get me wrong — I did all the things that all the experts said I should do, but my results were very limited at best.

After three months (and about 70% of my savings) I realized I was in trouble.  As much as I wanted this new career, it looked like it wasn’t going to happen.  I was working about 12 hours a day doing mailings, walking neighborhoods, calling my network (until they didn’t want to hear from me), sitting floor duty, sitting new construction model homes and open houses — all the things that all the experts tell us to do.

But the problem is that it simply wasn’t growing my business fast enough and I was looking hard at finding something else to do.  I was really bummed out so I took a day to be alone and rethink everything I was doing and to do some serious soul searching.  Did I make a huge mistake coming into real estate?  I didn’t think so.  More real estate was being sold than at any time in the history of civilization!  There were more mortgage products than ever, too, allowing just about anyone to qualify to purchase.  The problem was that I wasn’t seeing my fair share of that business.

As I sat alone and pondered my decision, it occurred to me that  my problem was not my sales skill.  It was my lack of sales leads.  And I wasn’t the only one with that same problem.  It seemed that most agents were experiencing the very same thing I was, while a small handful had more business than they could handle.  I looked around and realized that the Internet had changed virtually every other business, so I thought that perhaps real estate was no exception.

I decided that I needed to turn to the Internet to get customers. I got a real estate website,  but soon realized that having a website was not the answer.  I found out very quickly that there was a huge difference between having a website and capturing customers online.  I looked at lots of websites:  Advanced Access,,, iHouse 2000, Point2Agent, Success Websites, and many others.  I learned that nearly all of them were eerily similar.  I also noticed that none of them captured customers well.  Why?  Because that’s not what they were designed to do.  They were designed to give out content to website visitors, and they did that pretty well, but they were not designed to capture business.

I decided that I would have to build my own website.  Don’t get me wrong, if I’d been able to find a site designed to capture leads, I would have signed up immediately.  The problem is I couldn’t find one, so I had to become a geek!  I bought Microsoft Publisher and some books on website design and started learning.  It wasn’t fun, but then, I was desperate. I designed and redesigned my website.  I learned that there was a science to capturing leads online.

sci·ence [sahy-uhns] – noun A branch of knowledge or study dealing with a body of facts or truths systematically arranged and showing the operation of general laws: the science of online marketing.

And that’s what I focused on — the science of online marketing.  I learned that if I was going to do any business online, I would not be able to use any traditional website.  Why?  Because Internet traffic is too expensive.  Whether you choose to use pay-per-visitor  (pay-per-click) advertising, or whether you opt for search engine optimization (SEO), any way you slice it, website traffic costs money.  Lots of money.

So why is that important?  Here’s why:  Suppose you have a typical “I love me” real estate website, that captures a very typical 1% of all website visitors.  And suppose your traffic (however you choose to advertise) costs you $1 per visitor, which is a very low price, by the way. Let’s do the math.  One hundred visitors costs $100 in advertising, and you capture 1% or in other words, one lead.  That makes your cost per lead $100!  If it takes you 24 leads to close a transaction (that’s the national average, by the way), then your advertising cost per transaction is $2,400!

Now suppose you want to keep your advertising budget at 20% of gross commission income (GCI), again a widely recommended budget, then you need to have an average gross commission of $12,000 just to keep your advertising in budget.  That means that if you want to be “in budget” you need to sell houses over $400,000 ($12,000 / 3%) assuming a 3% transaction side.  I think you’ll agree that most markets average much less than that, both in sales price and commission percentage.

Now supposed you were able to capture just 5% of your traffic instead of 1%.  That would bring your cost per lead down to $20! Now your average gross commission only has to be $480 (24 leads times $20 per lead).  Now, unless your market has an average sale price of under $16,000, the internet is now a good source of advertising ($480 average commission divided by 3% average side equals $16,000).

Do you see how powerful that is?  I hope so.  When I realized that power, I began to study the science of lead capture. And it turned my business around.  Soon I was a top producing agent.  Then I began to build a team to help me handle all my business.  Then the team outgrew the Century 21 office where I worked and we started our own company.  Then the company grew to become the largest company in our market.

Before long, other agents around the country were asking me to help them with their websites.  After realizing that I couldn’t coach agents to build their sites, I began to license them my technology in April of 2004.  First it was a dozen or so, then hundreds, then thousands.  Today over 14,000 agents license our technology in one form or another.

Now, six years later, besides running a very large real estate brokerage, my company has perfected online lead capture.  Our lead capture module (LCM), designed to work with any website, captures leads at an astounding 20-30% depending on the market and price point.  We started with simple changes.  We experimented with different fonts, different colors, different graphics, different programming languages, different everything — if you can imagine it, we’ve experimented with it, carefully measuring and tracking every single result.

To give you an idea what I mean, this is from last night’s report:  LCM Path A, 23.6%; LCM Path B, 24.6%; LCM Path C, 23.4%.  In other words, as I type this, we have three separate versions of our LCM in operation, nationally, in real time.  These are actual numbers from last night!  And I’m not talking about just capturing a name and an email address.  We capture a name, two phone numbers, an email address, whether the customer is buying, selling, or buying and selling,  the price range, the amount of cash they have for down payment, and their self-proclaimed credit rating.  And we are currently capturing a fourth of all visitors with all that information!

See?  It’s a science.  Most websites capture 1% and get only a name and an email address!  We get all eight items and capture a fourth of the visitors!  Have I piqued your interest?  Good!  That’s what this series of blog posts is going to be about.  I am going to step-by-step walk you through many of the things we’ve learned about online marketing in the last five years.  Feel free to contact me with any questions you may have, or feel free to browse our website to learn more about lead capture technology.  Imagine how powerful having good lead capture on your site could be.  Imagine how much money it could make you.  Now stay tuned for the next installment…

Share this :

I give away about 99% of all my technology and digital training content, completely free of charge, because I want to see other agents have the same kind of success that I've had. But one thing I charge for is my Ultimate Website technology. This is the web technology I created for myself that turned my real estate practice around overnight, and now I license it agents everywhere. But right now it's too popular and is currently waitlisted. Click here to get on the website as soon as possible and I'll notify you as soon as new invitations become available.

Comments 1

  1. author The Science of Online Lead Capture (Part 2) « Blog, Matt. Blog! posted March 23rd 2010. 1:28 pm Reply

    […] for you to expect me to back it up.  What do I mean by “the science of lead capture”? In the introductory article I defined science as a branch of knowledge or study dealing with a body of facts or truths […]

Leave a Comment!

Your email address will not be published. Required fields are marked *