Lars Hedenborg spent up to $5,000 a month on Zillow leads starting in 2016, paying 40% of commissions. He argues agents should spend only 10% of gross commission income on lead acquisition instead, keeping more money and control of their business.
40%
$5,000 per month
Late 2016 / early 2017
3,000 Google reviews
10% of GCI
As an industry, we're so heavily marketed to, people are just selling us buyer leads. And so there's this, like, if I can just, you know, trick out my database to send out the right emails and texts and property searches, I can pay realtor.com for these leads or do Google pay per click or whatever. And that's going to somehow lead into a thriving business, doesn't because you're not controlling the inventory and you're always at the beck and call of the person that's providing the lead to you. Zillow is the perfect example. I just got a text from my former business partner. So that started in, like, late 2016, early 2017. We never spent a lot of money with Zillow, but we were up to 5,000 per month with Zillow. And we were good enough at conversion where it made sense financially. Wiped that out completely. And even getting Zillow reviews we decided against because of a longer story than I have time to tell. But he just text me, they just had passed the system that I put in place when there were no Google reviews. They just passed 3,000 Google reviews. And he said, thank you for the vision you had, knowing that Zillow, who charges 40% now. 40%, they charge the vision that we had to get out of that paid lead source. And here's the crazy thing. There are people that are like, I got to have Zillow Flex. It's the best thing ever. And they're paying 40% to Zillow. And our model accounts for 10% of GCI can go to getting something to close. So on a $15,000 commission check, you could spend 1500 bucks, but on a $15,000 commission Check with Zillow, you're spending $6,000. But they're like, yeah, but I'm taking home 9,000. It's 100% profit. I'm like, that's the mindset of a producer that will never have freedom financially or time versus, like, the business builders. Like, nope, I'm going to crack the code on the 10%. I'm going to get, you know, I'm going to get a million GCI and spend 100,000 for it instead of a million GCI and spend 400,000 for it and have to show all those homes on all the evenings and weekends and like, just be like a slave to your business. So there's no freedom in not figuring this stuff out.
