What Should a Good Lead Cost?

I was just asked a great question from one of our clients.

“What should a good lead cost?”

Wow. Maybe it’s just something in the air today. But, that question on this day just struck me as very profound.

I would answer – “whatever you can afford to pay for it.” “Whatever offers you the greatest return on investment.”

You have to measure the ROI on your marketing and advertising dollars very carefully. I wrote a few months ago about the importance of a Marketing Plan, so you can check that out on my previous Blog posts. But trying to put into context the value of a good lead is almost impossible without knowing the clients specific needs and ability to close.

Here’s what I’m saying……..

If you are a real estate agent that specializes in luxury property sales, then naturally your commissions per sale are going to be much higher than your average real estate agent. So, you are probably willing to invest hundreds or even thousands of dollars to get a qualified client on board with you. But at the end of the day, measuring the ROI on that investment is the same.

If you are a real estate investor that averages $40,000 gross profit on each transaction, then you are very likely willing to pay hundreds or thousands of dollars to get to that opportunity in the first place. Why wouldn’t you?


I love it when people tell me that they get leads for no cost. They subscribe to this service or that service (COSTS). OR they just pass out cards, do some direct mail, attend networking meetings, or send out email blasts (COST, COST, COST) Whether it is time or money – a good client or deal will always have a cost associated with it. As the saying goes, nothing in life is free.

I recently had someone ask me…”Why should I use 1-800-SELL-NOW when I can buy leads online for $25 each. “

Naturally, my response was …..Because how many of those leads do you have to purchase to get one client or deal? (10-20 or more) How much time does it take you to make calls on 10-20 in a week to find that one? What’s your time worth? (BIG COST) Where do those online leads come from – a generated list, a home valuation site, a site that sells the same lead to multiple people? Why not invest in leads that CALL YOU directly because THEY NEED YOU? Take all the money, time, effort, and energy wasted on these ice cold leads and invest in HOT LEADS that WANT TO DO BUSINESS WITH YOU.

This one in particular always gets me……”I get all my leads for free. I don’t do any marketing. I have a partner. They do all the advertising, then I put the deal together. Then we split the profits.” So…….the cost to you is 50% of the profits of your deal. Explain to me again how you get your leads for Free?

The point is this.

Business success requires an investment in time and money. Blood, sweat, tears, and desire – you have to have it all to win. You have to be willing to evaluate and to be honest with yourself on what you are willing to do to attract new business to your company. But be HONEST…it will DEFINITELY require some effort and investment (COST).

Leads should cost you whatever it takes to make your wildest dreams come true. The best leads result in the best clients or deals, which result in your ULTIMATE success. If you invest in poor leads that have little chance of resulting in a client or a deal, then you can do the math….

Any guru will tell you that the truly valuable lead is the ONE THAT CALLS YOU. The one that picks up the phone or visits a website and contacts you directly. The one that has decided that they need YOU. Investing in these types of leads is where true success lies as a real estate professional.

As I said earlier, nothing in life is free. You will always get what you pay for.

Check out www.1800sellnow.com to learn more about our service.

Good Luck in Real Estate!

About Kent Clothier

Kent Clothier is President and CEO of Real Estate Worldwide (REWW), a highly sought-after speaker, the owner of three multi-million dollar a year Internet marketed brands, and proud husband and father. Kent is motivated by his love of family and freedom, creating products that enable people to live their lives the way they choose.

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