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In The Business Of Personal Relationships, Database Marketing Is More Effective Than SEO Marketing

Two years ago, NAR told us that 74% of people begin their home search online.  What they didn’t tell us, however, what percentage of those people write paper with the agent on whose site they began said search.

This omission is an important one.  Just because a person starts online doesn’t mean he finishes there.  If you’ve researched a product at multiple Web sites before making the actual purchase, you understand what I mean.

Every store except the last one was just a borrowed encyclopedia.

Click-throughs from a search engines are not “leads” and that’s why the NAR statistic is misleading.  Until a reader engages the author personally, the click-through is only that.

A Web site visitor that registers for free search, free reports, or free seminars is not your client.  He is a window-shopper taking home free samples.  He’s a client when he signs, and never before.

Today, the Federal Reserve will do something to the Fed Funds Rate and if history is an indicator, my Web site traffic will quadruple.  It happens every time.  It’s because I’m so high on Google for the term “fed funds rate mortgage“. 

Of the traffic from Google, not a single person will reach out to me for a “personal question” about their mortgage.  Again, history is my indicator.  I am the source of information of for a lot of people and that suits me fine.

Knowing that my clients would care about the same information, I have a planned email to my database that will do three things:

  1. Explain that the cut in Fed Funds Rate will likely cause mortgage rates to rise
  2. Introduce them to the concept of “why the Fed is taking a shower”
  3. Point them back to my Web site for a full explanation of the “shower” analogy

This email to my database will generate new business.  Once more, history is my indicator. 

The last time I saw this was when I sent my “stick people in houses” video on the same day the Fed dropped rates 0.750% out of nowhere.  The email generated much more business for my team than did placing high on Google’s page rank.

When you’re in the business of personal relationships, effective database marketing is far more productive than search engine marketing.  The calls from my database are warm leads; Google’s leads are algorithmically cold.

I’m going prove that again at 2:15 P.M. ET today.

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  • 20 comments

    20 Comments so far

    1. Doug Quance January 30th, 2008 11:41 am

      I have tire-kickers from 2001… still doing searches online.

      You are so very correct – a click-through does not a client make.

    2. Eric Blackwell January 30th, 2008 11:47 am

      Dan-

      Excellent points. I am working on a similar post coming soon, with a concrete example. It is the relationships that are important and (coming from an SEO oriented marketing person…no less) database marketing IS in fact often far more productive than SEO.

      I would point out, howeever, that they are not mutually exclusive and that working together, there is a synergistic effect. IMO the problem is when there is tunnel vision focusing on one way OR the other vs AND the other.

      Best;

      Eric

    3. Brian Brady January 30th, 2008 12:00 pm

      “I’m going prove that again at 2:15 P.M. ET today.”

      Ditto. 15 minutes away

    4. Andrew January 30th, 2008 12:00 pm

      I think these are two separate issues, which have to be managed differntly. We are talking about two different areas of the sales process. SEO marketing is closer to the top of the sales funnel, whereas DB marketing resides closer to the bottom of the sales funnel. Individual agents should focus on their client relationships first and let their brokers attack the SEO strategy and pass down the leads. Agents who try to jump into SEO will spend too much time trying to optimize their websites. If anything agents should be blogging or participating in an agent team blog to build up their DB marketing.

    5. Brian Brady January 30th, 2008 1:10 pm

      “Individual agents should focus on their client relationships first and let their brokers attack the SEO strategy and pass down the leads.”

      ??????

      Andrew, we advocate the exact opposite here. Are you a broker/owner?

    6. Kris Berg January 30th, 2008 1:50 pm

      Well isn’t that just a coincidence. I just checked in here after spending the last two hours cleaning up my data base. Today I have the luxury of an entire day to catch up with business housecleaning and client contact. This will be the most productive day I will spend all week. Oh, and I just sent two past clients birthday cards. That will trump your little interest rate announcement any day! :)

    7. Kevin Boer January 30th, 2008 2:19 pm

      Hear, hear! SEO is a numbers game — random Google clients do come, they do exist, and they do sign purchase contracts…but you have to get a lot of hits to turn one into a client.

      From a client acquisition point of view, then, why do I blog? Simple: it’s very synergistic with my other marketing activities, as Eric says above. e.g.

      – Write a post on Mountain View home prices. Email link to article to past and prospective Mountain View clients.

      – Write a post on neighborhood X. Hand out a copy at next open house in neighborhood X.

    8. Sean Purcell January 30th, 2008 2:43 pm

      Dan – dead on post. My partners and I were discussing this very issue at a marketing meeting this morning. Specifically: a realtor we know who is spending close to $2000/month on SEO, pay per clicks and so on. When you google the area he pops up near the top, click through and he has a real nice site. Ask him about his business and he doesn’t have any…

      IMHO blogs and web sites are phenomenal client retention tools. They are also very useful for elevating your expertise status. In the end though, success in real estate is a based on relationships and getting belly to belly with people.

    9. Kenneth Rolfe January 30th, 2008 6:24 pm

      This is a really great post! You have a very interesting point of view. I agree with you 100% that this industry is based on personal relationships. Even the business that is generated from a website needs to be this way. I think that is the key. We need to find ways to generate new business, but not put all our eggs in one basket. Great post!

    10. Tony Gallegos January 30th, 2008 8:02 pm

      Dan you are dead on! Too many times Realtors and Originators let the tail wag the dog and SEO is the tail.

    11. [...] some place and time to be a pain in the ass to him to, but he’s absolutely on the money with this post: Click-throughs from a search engines are not “leads” and that’s why the NAR statistic is [...]

    12. Bob in San Diego January 30th, 2008 10:29 pm

      I love this! Keep selling it so others keep buying it. In the meantime I’ll take my “random Google” traffic and watch others use PPC for the same type of “random Google” traffic that costs me less than half a cent per unique visitor but yields an ROI in excess of 20,000%.

      I work with agents around the country who do quite well with this model.

      Like many agents, I hate cold calling and despise door knocking. It doesn’t work for me.

      One’s lack of success at something is not proof it doesn’t work.

    13. Eric Blackwell January 31st, 2008 5:55 am

      Fair warning (grin) long comment ahead.

      OK, I hadn’t looked at the comments since mine…I guess I need to clarify a few things…

      SEO (or more correctly Search engine marketing) is NOT mutually exclusive from Database marketing and Database marketing is not cold calling.

      They are three distinctly different things that bring in customers three different ways, in my opinion. One is not better than the other. (although I will admit that I do NOT like GETTING or MAKING cold calls…so I don’t really advocate that…Especially since I beleive in the adage and ethos of “do unto others” ) In our office, we have folks who have used all 3 to great success.

      Dan’s post and his opinion are TRUE as it applies to him and many others. As well, Bob has had great success (as have we) in getting leads via search engine traffic.

      I would offer this opinion: Without doing the database marketing that comes BEHIND SEO on the timeline and without keeping up with your customers and CONTINUING to build them into RAVING FANS, you are wasting much of the effort (and ROI) spent in getting a site to the top.

      My agreement with Dan is that I think continuing to market and build the relationship with your sphere of influence is the cornerstone. Without it, other lead gen activities will not be successful, long term. With it ALL lead generation activities maximize their ROI’s. Since it is also a lead generating activity on it’s own, it would be the FIRST brick and cornerstone in building the marketing structure.

      @Sean- If a person is spending $2,000 a month and generating $15,000 a month in sales off of it, they are doing it wrong or there is something missing. I work with agents everyday using PPC, SEO, hyperlocal blogs, and other online techniques and ANY of these can and regularly to generate those kinds of ROIs.

      You CAN in fact do it all. As Brian commented above, this is NOT just for brokers, in fact agents can have much success in online lead generation…why shouldn’t they? I consult with agents that do this all of the time.

      My guess is that Bob in the comment above is pretty careful in building lasting relationships with the good folks that visit his website online and choose to use his services. My guess is that Greg Swann, Kris Berg, et al all do the same. (That why I would refer to them). That is why database marketing is the most effective in my opinion. It is, in fact, the dog.

      Thoughts?

    14. Eric Blackwell January 31st, 2008 5:58 am

      EDIT:

      @Sean- If a person is spending $2,000 a month and NOT generating $15,000 a month in sales off of it,

      My apologies..It’s EARLY here! (grin)

    15. Sean Purcell January 31st, 2008 7:26 am

      Eric – very thoughtful comment and I agree with you. My take on Dan’s original post (reiterate: my opinion – please do not confuse my loose change with Dan’s crisp $100 bill) is this:

      Many of us lose sight of the purpose of marketing. Improving your page rank, getting 10,000 hits per month on your site or buying lots of PPCs are all very strong ways of generating leads… but successful agents (such as you mentioned in your comment) view them as methods and not goals. The GOAL is to convert all that traffic into prospects, clients and eventually raving fans.

      One of the best ways to make that conversion is through your blog. It narrows down the field to those that want to do business with someone like you. Blogs are also a great way to stay in front of your data base. But when all is said and done, it is the personal touch that creates business. Bob in San Diego mentions “random Google” traffic, but I’ll bet dollars to donuts they do not remain “random” for long.

      The clicker at the door tells us how well we are doing getting people in the store. But the reason we opened the store is to help our clients in their PURCHASE, not count them coming… and going.

    16. [...] selling real estate… I have to advise you to stop.  Spend that time doing something else.  Database marketing maybe.  Join a civic organization or something.  Work at a charity.  Because there’s no way that [...]

    17. David Faudman January 31st, 2008 10:17 pm

      Dan, very well said.
      Real estate (and loans)is a Relationship Game. This is exactly my experience as a broker and as a CEO/Founder of the agent-client collaboration tool CleanOffer.com.

    18. Dennis - Florence Oregon February 4th, 2008 1:35 am

      I do well from search engine traffic, but I like to be reminded to work my database of past clients occasionally. Sometimes I get so wrapped up in working with new leads that I neglect to keep close relationships with past clients or older leads that have not yet purchased.
      Your database is your goldmine, and it has to be worked.

    19. [...] and MargeKris Berg — Going Green, Going Green – finally!Dan Green — Database Marketing, In The Business Of Personal Relationships, Database Marketing Is More Effective Than SEO MarketingMarc Grayson — Are You IN or OUT?, Are You IN or OUT With Real Estate Blogging?Dan Green [...]

    20. [...] week’s People’s Choice Award goes to Dan Green for In The Business Of Personal Relationships, Database Marketing Is More Effective Than SEO Marketing: Two years ago, NAR told us that 74% of people begin their home search online.  What they [...]