e-Book Edition

The Scienceof OnlineMarketing

By Matt Jones

Table of Contents

Introduction

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

A Final Note from Matt Jones

About the Author

IntroductionWhat an awesome time to be in real estate! I know

what you're thinking -- "Have you lost your mind?" --

but really. I'm dead serious. It really is an awesome

time to be in real estate, if you're doing real estate the

NEW way. Listen, if you'd have told me when I started

in real estate seven years ago, that our company would

be changing the real estate industry, I'd have laughed.

If you'd have told me that over 20,000 agents world-

wide would use technology that we invented, I'd have

said, "You're crazy."

If you'd have told me that over 100,000 agents just like

you would take part in our training so they could learn

this new way of doing real estate, I would never have

believed you. And if you'd have told me that my little

company would be featured on CNN as "changing the

way real estate is done" I would have said, "You have

lost your mind." But you know what? That's exactly

what happened.

Hi. My name is Matt Jones and I'm the President and

CEO of FavoriteAgent.com, but more importantly, as

you read this e-book I'm going to be your "science in-

structor". And as you read, you may notice that the feel

is that of a text book. That's because this material was

originally developed as a series of technical instruc-

tional articles for one of our industry's leading trade

publications.

Later, we took the entire series and compiled them into

a textbook for the FAST® Certification training offered

by Favorite Agent Real Estate Academy. The material

was so popular that we decided to offer an e-book ver-

sion. I trust you will enjoy it.

Now, I'm willing to bet you're reading this e-book for

one of two reasons. You're frustrated because you've

been working hard and yet not having the results you'd

like. I mean let's face it -- most agents today are work-

ing harder, and making less money than ever before.

And the truth is, you're probably even a little frustrated

because the very people who SHOULD be helping you

are just as clueless about what's going on as you are.

Either that or, you're being proactive. Maybe your real

estate career is doing fine, but you see the changing

direction of our industry and you feel like it's getting

tougher and tougher doing real estate the old way, so

you've decided it's time to invest in some training so

you can stay ahead of the crowd. Either way, you've

purchased this e-book and you're here, ready to learn.

I am honored.

Now, I'll warn you: if you're looking for a new twist on

old-school real estate, you've come to the wrong place.

Trust me when I tell you, this will be different from

anything you've ever been taught. But many agents

who've taken this training -- who are doing real estate

this new way -- the FavoriteAgent.com way -- are doing

10+ deals a month and working less than many of their

old-school counterparts.

So I want to make this pledge to you: If you'll really

focus and learn the material in this relatively short e-

book, and then, more importantly, take the time to ac-

tually apply the principles that I'm going to show you,

your business will never be the same again. I promise.

It's truly my greatest honor to be able to play even a

small part in your success. So thanks again for reading.

Important Update

Thank you for purchasing and reading my e-book. I

hope you find it helpful in your real estate practice,

and more importantly, I hope that by using some of

my ideas contained in these pages, you’ll make a lot of

money!

As you’ll discover soon enough, my approach to this

business is probably very different from the traditional

real estate model. My approach is a technology-based

model, and it is very cutting edge. It’s not for everyone,

and it might not be for you. But if it is -- if it resonates

with you -- then you’ll need some very specific technol-

ogy in order to implement it in your practice. That’s

the reason for my update:

At the time when I originally wrote this book, my

company only offered a technology option called

Pipeline-i, which is a state-of-the-art virtual office

technology suite we developed to meet the needs of

agents, teams, and brokerages. While it continues

to be a great application, many agents told us that it

was too expensive for them to be able to justify for

their single agent practices.

Well, we listened and we developed a brand new tech-

nology tool to meet that need. It has the very same

lead capture technology only without all the enterprise

bundle, and of course, without the enterprise price tag.

Now, instead of only the one option, we now offer two.

Our new LCM Gateway is a state-of-the-art lead cap-

ture technology for less than the price of a cup of coffee

a day and it has no long-term contract! And as my way

of thanking you for reading, I’m offering it to you at a

substantial discount.

So, as you’re reading this book and you encounter plac-

es where it makes reference to our technology, please

keep in mind that we now offer both options, and not

just the one that it refers to on the page.

Thanks again for reading,

Matt Jones

Broker/President/CEO

FavoriteAgent.com

Chapter 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.

The problem was that it simply wasn’t growing my

business fast enough, and I was looking hard at find-

ing something else to do. I was really bummed out so I

took a day to be alone and rethink everything I was do-

ing 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 see-

ing 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 expe-

riencing the very same thing I was, while a small hand-

ful had more business than they could handle. I looked

around and realized that the Internet had changed vir-

tually 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, Homes.

com, Realtor.com, iHouse 2000, Point2Agent, Suc-

cess 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 busi-

ness.

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 de-

signed to capture leads, I would have signed up imme-

diately. 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 rede-

signed 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 system-

atically arranged and showing the operation of general

laws: the science of online lead capture.

And that’s what I focused on — the science of online

lead capture. I learned that if I was going to do any

business online, I would not be able to use any tradi-

tional 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 cap-

tures a very typical 1% of all website visitors. And sup-

pose 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 bud-

get 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 stay

within your advertising 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 commis-

sion 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 commis-

sion 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 my 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 ask-

ing 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. To-

day 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, dif-

ferent programming languages, different everything —

if you can imagine it, we’ve experimented with it, care-

fully measuring and tracking every single result.

To give you an idea of 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 num-

bers, an email address, whether the customer is buy-

ing, 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 informa-

tion!

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 e-book is

going to be about. I am going to step-by-step walk you

through many of the things we’ve learned about online

lead capture 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. Imag-

ine how much money it could make you.

Chapter 2

Let’s talk for a minute about science. After all, I’ve

made the assertion that there was a science to online

lead capture. So with my having made such an asser-

tion, it is reasonable for you to expect me to back it up.

What do I mean by “the science of lead capture”? In the

introductory chapter I defined science as a branch of

knowledge or study dealing with a body of facts or truths

systematically arranged and showing the operation of

general laws: e.g., the science of online lead capture.

From that definition, you can assume two things: that

I have used a very systematic approach and that I’ve

identified certain principles with regard to online lead

capture. Let me throw out another definition:

scientific method – noun A process that is the basis for

scientific inquiry. The scientific method follows a series

of steps: (1) identify a problem you would like to solve,

(2) formulate a hypothesis, (3) test the hypothesis, (4)

collect and analyze the data, (5) make conclusions.

Now I am the first to admit, I’m no rocket scientist. But

I am very analytical by nature so I’ve followed a very

methodical approach to understanding and refining

online lead capture. Remember, I nearly failed in this

business because of a lack of customers, so I made it a

mission to generate an abundance of leads. As it turns

out, the approach I used was exactly that of the text-

book definition of the scientific method.

First I identified the problem I wanted to solve. For me

it was capturing the maximum number of leads (cus-

tomers) from my website. Remember, I initially did

this for me, not for other agents. Next, it was forming

a number of hypotheses or assumptions, one at a time,

about how online customers act or behave. Some of

those assumptions were correct, while others were

incorrect. How do I know? Because the next step

in the scientific method is testing the hypotheses or

assumptions.

Step three is testing the hypotheses. In order to prop-

erly test assumptions it’s important that you have

enough data to provide a valid conclusion and that you

build in systems to accurately measure your results. In

order to have a margin of error of 2% (a generally ac-

cepted level of accuracy) you must collect a minimum

of 2,500 data records for each assumption you are test-

ing. And you must similarly have as many data records

for the baseline against which you are comparing.

So in order to compare two choices against one anoth-

er, you must collect data from at least 5,000 custom-

ers over the same time period. For most of us, that

involves spending a lot of money to produce that much

traffic. Next, we collected and analyzed the data. In or-

der to measure the results we designed our test “LCM

Gateway” so that we could route our Internet traffic to

three different options while measuring and recording

the data (metrics) for each option, independently.

And to safeguard against differences in customer re-

sponses for various times of the day and days of the

week, we designed a proprietary traffic routing system

that randomly sends real-time traffic down three sep-

arate paths. This allows us to simultaneously gather

data for a baseline as well as to test two different as-

sumptions against that baseline and against each other.

Finally, after extensive testing and analysis, we were

able to make conclusions as to customer preferences,

each time allowing us to improve our results. Each

conclusion led to permanent changes in our LCM Gate-

way technology. Each minor change added to our LCM

Gateway’s efficiency, and ultimately to its power to

produce outstanding results.

Unfortunately, however, we’re testing and measuring

customer preferences, and customers are fickle. What

they like this month may be entirely different than

what they preferred 90 days ago or what they will like

90 days from now. That means that we never can stop

testing or the moment we do, we become obsolete.

Over the next few chapters, I intend to share with you

some of the things we have learned in this process of

years of testing. Some may come as a surprise while

other may seem obvious. What amazed me, person-

ally, is how some of the seemingly insignificant and

subtle changes resulted in some of our biggest gains. I

have also been surprised by the somewhat fluid nature

of customer preferences online. Just like styles and

tastes change, so do online shopping habits.

As you read this e-book, I would encourage you to take

notes. Many of the things I will discuss will allow you

to drastically improve your online marketing results,

and I sincerely hope, put money in your pocket. In

fact, I will make you this promise: if you read and ap-

ply the principles I’ll teach you in this course, it will

change forever the way you approach online market-

ing. I know it’s changed mine.

Chapter 3

By now I think we’ve come to understand that there

actually is a science to online lead capture, and we’ve

identified the methodology where we can actually test

and measure resulting in the ability to produce much

more bang for our Internet marketing buck. From here

we will examine and discuss at great length a number

of different crucial elements of the online lead capture

process.

First we’ll examine advertising copy. That means the

actual words to use as well as the words not to use for

your online advertising to result in the highest inter-

est. Let’s not forget that even the best capture device in

the world will not produce any meaningful results if no

traffic every comes to it. While we are on the subject of

advertising, ad placement is similarly important, so we

will discuss it in detail.

Where should you advertise? How should you adver-

tise? Should you hire an agency to manage your traffic

or should you do it yourself? Finally, I’ll address the

topic of search key words. What words pull the best

traffic? How can you know what words produce the

best results?

After covering the entire category of online advertis-

ing, we’ll move to the actual website. We’ll discuss the

all-important website landing page, or the page that

people come to when they click on your ad. We’ll look

at the value proposition or value propositions you’ve

included on the page. What do you offer that custom-

ers are interested in? From there we will move on to

the graphic and visual appeal of your website and par-

ticularly of the landing page.

I’ll share some of our findings regarding fonts, sizes,

colors, icons, etc. Most people don’t realize that people

tend to judge a book (or website) by its cover so the

visual appeal of the site is critical as we will discuss.

From there we will move on to some of the more ab-

stract elements. We’ll discuss site abandonment (the

people who come to your site and then for whatever

reason leave it).

I’ll share some of the tricks we’ve learned about how to

minimize abandonment. That will lead us to the form

page or as some refer to it, the registration page. What

information should you ask for? What should you not

ask for? Where should the form page be in the custom-

er path? Does having a form page or registration page

put your website into a different category with regard

to DOJ/NAR compliance?

Finally, we’ll discuss some very important technical

concerns. Is there any difference in online lead cap-

ture depending on how your website is programmed?

The short answer is absolutely. Where it is hosted is

very critical as well. Page load times effect abandon-

ment and the capture rate. We will discuss processing,

both client side (on the web page being served up to

someone’s browser) and server side (how fast the ac-

tual hosting server processes the various requests for

information).

For example there are programming languages, pro-

gramming scripts, form validation, and programming

architecture used on agent websites that have very slow

processing times and actually dramatically effect the

site’s efficiency in capturing customers. How can an

agent who is not a geek make sure his site is meeting

the technical requirements so that it works well? And

last but not least, we’ll discuss the importance of inte-

gration of your website to your contact management

platform.

Clearly that is a lot of ground to cover, and I want to

take the time to cover it in enough detail that it is valu-

able to the average agent who is not a geek but simply

wants to maximize his online results. Because every-

one is at a different place, technically speaking, I want

you to feel comfortable asking me questions.

Believe me, if you are having the question there are

probably dozens of others with the exact same question

so please, for the sake of the entire online real estate

community, ask away!

In the next chapter we will cover the entire gambit of

online advertising, from advertising copy, to ad place-

ment, key words and so forth. You definitely won’t

want to miss it. Just knowing how to advertise online

could save you thousands of dollars over the next year.

In the mean time, please share this e-book with your

fellow agents. Remember, there is plenty of business

for all of us, if we just learn how to go get it!

Chapter 4

In this chapter we’ll examine the subject of online ad-

vertising. I am probably going to use some terminol-

ogy that is new to you, but I will attempt to either keep

it simple or provide explanations as I go so even the

most un-tech-savvy agent should have no problem tak-

ing something of value away from this chapter.

I need you to forget everything you’ve ever heard about

advertising while you read and I want you to turn on

your common sense — not very common these days —

and see if this doesn’t resonate with you down deep in-

side. I believe it will, and I believe it will result in your

changing the way you look at advertising, and particu-

larly online advertising forever.

First let’s talk about advertising. What is it? The dic-

tionary definition of advertising is the act or practice of

calling public attention to one’s product, service, need,

etc., especially by paid announcements in newspapers

and magazines, over radio or television, on billboards,

etc.: to get more customers by advertising.

We all can agree on what advertising is. Where we have

some problems agreeing is how. The confusion really

comes down to a changing industry. In the old days

the old “build it and they will come” was the way of

advertising. We were taught of branding and position-

ing and we worked hard to get our name “out there” so

customers would find us. Now the rules have changed.

Now it is “go and get them and they will come” and

those who passively wait for business to come to them

are now starting to say, “Would you like fries with that

burger, sir?”

What do I mean? I mean that we need to think direct

response in our advertising. We need to put a very

specific value proposition out there with a clear call to

action. Here is an example of a successful Google ad-

vertisement.

Waterloo Iowa Real Estate

Search All Waterloo Homes

Using the Local MLS Database

http:FavoriteAgent.com

Note the headline. It is exactly what the customer is

searching for when he sees your ad. It doesn’t include

the agent’s name, his photo (God forbid!), or lots of su-

perlatives about how great the agent is. It simply gives

the customer exactly what he is searching for, in very

simple terms.

Next it clarifies the value proposition to the customer

with a very specific call to action. Anyone seeing this ad

will know exactly what to expect when they click on the

ad. Having tested hundreds of different ads, the for-

mat above has repeatedly pulled the highest response

rate from the people who matter — customers.

Now let’s discuss advertising key words. When you

advertise on a search engine (like Google) you get to

choose the key words, or the words your customer will

search for when you want your ad to be displayed. For

example, if you wanted people searching for real estate

in Waterloo, Iowa to see your ad, you would want to

use the key words “Waterloo Iowa real estate” or Wa-

terloo IA real estate”.

We have tested hundreds of different combinations

of key words to measure which ones have the greatest

reach to the real estate shopper. Here is a list of those

65 most popular key word combinations: (Feel free to

copy them and substitute your city’s name for the name

“yourcity” and your state’s name for “yourstatelong”

and the two letter abbreviation for “yourstateshort”.)

appraisal yourcity

appraisal yourcity yourstateshort

appraisal yourcity yourstatelong

appraiser yourcity

appraiser yourcity yourstateshort

appraiser yourcity yourstatelong

home value yourcity

home value yourcity yourstateshort

home value yourcity yourstatelong

home values yourcity

home values yourcity yourstateshort

home values yourcity yourstatelong

homes for sale yourcity

homes for sale yourcity yourstateshort

homes for sale yourcity yourstatelong

homes yourcity homes

yourcity yourstateshort homes

yourcity yourstatelong house value

yourcity house value

yourcity yourstateshort

house value yourcity

yourstatelong house values

yourcity house values

yourcity yourstateshort house values

yourcity yourstatelong house values

yourcity appraisal yourcity appraiser

yourcity home value

yourcity home values

yourcity homes

yourcity house value

yourcity house values

yourcity yourstateshort appraisal

yourcity yourstateshort appraiser

yourcity yourstateshort home value

yourcity yourstateshort home values

yourcity yourstateshort homes

yourcity yourstateshort house value

yourcity yourstateshort house values

yourcity yourstateshort real estate

yourcity yourstateshort realtor

yourcity yourstateshort realtors

yourcity yourstatelong appraisal

yourcity yourstatelong appraiser

yourcity yourstatelong home value

yourcity yourstatelong home values

yourcity yourstatelong homes

yourcity yourstatelong house value

yourcity yourstatelong house values

yourcity yourstatelong real estate

yourcity yourstatelong realtor

yourcity yourstatelong realtors

yourcity realtor

yourcity realtors

real estate yourcity

real estate yourcity yourstateshort

real estate yourcity yourstatelong

realtor yourcity

realtor yourcity yourstateshort

realtor yourcity yourstatelong

realtors yourcity

realtors yourcity yourstateshort

realtors yourcity yourstatelong

sell homes yourcity

sell homes yourcity yourstateshort

sell homes yourcity yourstatelong

Now that we have the ad and the search key words, let’s

discuss where to advertise. Having done lots of online

advertising, we’ve had our very best results using pay-

per-click (or pay-per-visitor) advertising in the major

search engines. By creating a campaign in both Yahoo

and Google’s search networks, you have effectively cov-

ered 98% of all US based web searches.

Here is the latest data (April 2008) from Hitwise:

Google has the largest market share of U.S. based web

searches at 67%; Yahoo is second with a market share

of 20%; MSN is third with a market share of 7%; Ask

is fourth with a market share of 4%. Combine those

four and you have nearly all domestic searches. And by

advertising on the Yahoo and Google search networks,

you reach all of those search engines and many more.

Advertising doesn’t have to be complicated either.

When I was managing all my own ads I spent about a

month getting them all perfected, and then I left them

alone and checked on them about every quarter. They

were on auto pilot. I didn’t ever use an advertising

agency because it was so simple I could manage it my-

self in a few minutes a quarter. I could pause the cam-

paigns with a couple of clicks if I had too many leads to

keep up or if I wanted to go on vacation. The beauty of

online advertising is that it is simple, it’s scalable, and

it’s inexpensive, assuming you have good lead capture

in place.

Oh, a final note about search engine optimization or

SEO is probably in order. First, for those of you un-

familiar with the term, here’s Wikipedia’s definition:

“Search engine optimization (SEO) is the process of

improving the volume and quality of traffic to a web

site from search engines via “natural” (”organic” or “al-

gorithmic”) search results for targeted keywords. Usu-

ally, the earlier a site is presented in the search results

or the higher it “ranks”, the more searchers will visit

that site.”

Now in order for SEO techniques to work, it is impera-

tive that those techniques fool the search engine bots

(robots that constantly scan every website on the Inter-

net and catalog the content on each) into thinking that

the optimized website is more important, relatively,

than it really is. For that reason, in order for a search

engine to remain competitive, it must continually de-

feat the latest clever SEO technique or it will lose mar-

ket share to search engines that do a better job.

In other words, you must continue to optimize forever

or you may temporarily gain top organic ranking but

you will soon fade away as the search engines become

wise to the techniques you are using to defeat them.

As someone who tried search engine optimization, I

will offer my advice. It is much better to spend your

money on PPC (pay-per-click) advertising than SEO

because it is predictable, scalable, and inexpensive.

SOE is expensive and unpredictable. With PPC you

know exactly what results you will get within a day of

placing the ad.

I know there are quite a few companies that do SEO out

there and they are offering to help agents with search

engine ranking. I get an email from one of them prac-

tically every day. Don’t get fooled by promises of easy

web traffic. It’s not that easy and it’s very expensive.

Ok, enough about SEO. Spend your money on PPC.

It’s honest, it’s cheap, and it’s predictable.

Next we will talk about your website. What do you

need to include on your site? We will talk about the

value proposition, the graphic appeal, and we will dis-

cuss site abandonment. I’ll share with you how you can

make your site exactly what the typical home shopper

is looking for, so don’t miss it! In the mean time, you

need to think about how efficient your site is at lead

capture.

Chapter 5

OK, so we’ve talked about advertising — the value

proposition in the ad, the call to action, the advertising

key words, as well as sources of Internet traffic. We

discussed pay-per-click (or pay-per-visitor) advertis-

ing and search engine optimization (SEO). Now it’s

time to talk about the actual website.

What do the customers see once they have clicked on

your Internet advertisement? In this segment we will

be discussing everything about your website, from the

website’s landing page, to the content, to the value

propositions, to graphic appeal and finally to keeping

those customers on your site for as long as possible, or

to minimizing abandonment.

Before we launch into the various aspects of your web-

site, let me tell you right at the outset that I expect this

to be different from anything you’ve heard before about

online marketing or websites. That’s ok. I’ve been to

plenty of technology classes and I’ve heard the stan-

dard stuff they all teach. Typically the class is taught

by someone who doesn’t have a clue about online mar-

keting, but rather, who is simply selling something —

either a website or some kind of advertising product.

In all that training I’ve been taught again and again

that “content is king!” The more content you have, the

more visitors you’ll get. They often teach that requir-

ing customers to register is a bad idea because it will

cause a large number of them to leave your site. Well,

as you probably surmised from the earlier chapters,

I’ve tested websites extensively for six years now. I’ve

had as many as 2,000 pages of content, and I’ve had as

few as three.

I’ve tested colors, fonts, graphics, layout, with forms

and without forms. I’ve tried complicated and flashy,

and I’ve tried plain and simple. I’ve surveyed consum-

ers to see what they want in real estate websites. After

years of testing for and measuring customer response

levels, I have arrived at a few strong opinions regarding

real estate websites.

In the following paragraphs I will share them with you,

but I want you to understand that they are just that —

my opinions. I don’t want you to feel any obligation to

embrace or adopt them. I share them with you so that

you can improve your results with online marketing,

and that’s all.

You would probably be surprised to know that I think

that your website is actually not that important. With

the proper lead capture technology, the website is all

but irrelevant. Nevertheless, I do think it is important

to have the best website possible so as to keep your cus-

tomers as happy as possible.

First, I will share with you in broad strokes some basics

we’ve learned about real estate websites over the last

six years. I’m not sharing simply opinion, but rather

results we have gathered by tabulating data drawn

from over 30 million unique website visitors over the

last 5 years. Here are four simple principles that we’ve

learned:

1. Customers want to search for homes. Everything

else is irrelevant by comparison. Currently, 94% of

all customers want to search for listings on a real

estate website. When we learned that customers

don’t really come to real estate websites for informa-

tion about schools, mortgages, little league scores,

weather, hotels, etc., we scaled back the services on

our site, and customers liked it much better. Make

it easy to find the MLS home search, and your cus-

tomers will come back again and again. Make it dif-

ficult, and they will move on to another site.

2. Customers want simplicity. Think Google. Google

has a 66% market share of domestic searches be-

cause they are the simplest of all search engines. At

one time we had over 2,000 pages of content on our

website. Keeping up with it all was a nightmare. It

was forever out of date or inaccurate. It was hard

to navigate, and it was confusing. Now our site has

a total of 3 pages! It has next to no content — it al-

lows you to search the MLS, to request listings by

email, and to get a free CMA. That’s it, and visitors

love it! Most customers will give you about 2-3 sec-

onds to find what they want before they go to an-

other website to find it. They want browse listings,

so give them what they want!

3. Customers want to know that they are not mak-

ing a commitment by visiting your website. When

we figured that out, our conversion numbers dou-

bled. Now we always give our visitors the choice of

finding homes without an agent, or with one. The

customer is boss on our website. The fact is that

76% of all buyers and 74% of all sellers will work

with the first agent they meet, so be first and don’t

make them uncomfortable and you will earn their

business 3 out of 4 times!

4. Customers don’t mind a fair exchange of value.

They are happy to register to use your site if the

promised content is exactly what they want. Our

LCM Gateway technology typically gets a first and

last name, two phone numbers, an email address,

whether a customer is buying, selling or buying and

selling, the price range they are seeking, the amount

of cash they have available to put as a down pay-

ment, and their self-reported credit rating. We get

all of that information while capturing 20-30% of

all visitors. Remember, typical real estate websites

capture less than 1% (0.87% according to NAR) and

generally only get a name and email address.

Now how simple is that? Four principles that can work

wonders on your site. I know it’s not what you hear

from the “experts”, but it’s what we’ve learned through

the votes of over 30 million real customers. Now let’s

talk about a few of the details.

When a customer visits your website, the first place he

or she goes is referred to as the “landing page” (the page

they land on). Many times that page is your “home

page”, but it doesn’t necessarily have to be. Whichever

page the customer arrives at first from your ad must

contain several things. It is amazing how creative peo-

ple can be to entice swarms of customers to click on

their ads, but then immediately lose them after they ar-

rive at the page.

This is generally due to a disconnect between the mes-

sage of the ad and the message of the landing page. If

your ad says, “Click to see blue elephant”, then you ought

to show them a blue elephant when they get there. To

the degree that the landing page delivers on the prom-

ises of the ad, the customer will continue to trust you

and maybe stick around a while. Or to put it another

way, if it’s not on your landing page, it shouldn’t be in

your ad, or you are wasting your money.

Next let’s discuss content. Today all the experts are

saying that you must have lots of content to keep your

customers engaged. Having tested it extensively for six

years, I say that’s just plain not true. What you must

have is what the customer wants. If you are advertising

access to the MLS listings (the number one requested

item on real estate websites) then your website should

make getting those listings very simple and easy.

Don’t make it hard for the customer to find the listings

or the customer will leave your site. (This phenomenon

is known as site abandonment.) The measure of a very

good site is how easy it is to find what you are looking

for when you visit.

Around the turn of the century, when the Internet was

really becoming mainstream, and every day brought

the IPO of yet another Internet company, there was a

big turf-war for online search. It was know as the “Por-

tal War”. Companies like AOL, MSN, Yahoo!, Excite,

Lycos, Ask Jeeves, InfoSeek, DogPile, and many others

were trying to dominate the world of Internet search.

There was a tiny search engine started in the dorm

room of two Standford grad students: Larry Page and

Sergey Brin. It’s name was BackRub. All the other

“Portals” or search engines were (and are) complicated

websites with thousands of words, links, and graphics,

but not BackRub. They liked to keep it simple.

Want to guess what happened in the Portal Wars?

That tiny company (BackRub) had the largest IPO in

the history of the stock market. Some time before then,

of course, BackRub changed it’s name to Google. It be-

came the Goliath in the Internet search space and now

claims a full 67% of all domestic web searches (or twice

the volume of everyone else combined).

I hadn’t used this illustration in several months, so I

thought I would check these sites again quickly before

giving you the numbers. They are astounding, and they

make an important point. You are welcome to check

them yourself — you will be amazed! Here is the word

count for the landing page of the following websites:

* MSN — 1087 words, 39 images

* Dogpile — 367 words, 18 images

* Ask Jeeves (Ask.com) — 1250 words, 27 images

* Yahoo! — 3120 words, 25 images

* AOL — 1388 words, 68 images

* Lycos — 537 words, 32 images

* Excite — 5338 words, 31 images

* Infoseek (now Go.com) — 553 words, 28 images

* Google — 46 words, 1 image

No, it’s not a typo. Google has a very strict policy and

has from the beginning: if the landing page contains

50 words, then it’s time for a redesign. What’s funny

is that most of the other sites (not Google) had ads on

their landing pages; one even displayed Google ads.

The average number of words on the landing pages for

all the other search engines above is 1705 and the aver-

age number of images is 34, while Google has 46 words

and 1 image.

Need I say more? The lesson is clear: Less is more!

Customers are looking for a simple online experience.

If you fail to learn that lesson, you will do so at your

own peril. Keep the content short and sweet. Give

the customers exactly what they’re looking for and no

more.

Don’t confuse them with an ocean of irrelevant infor-

mation. Less is more! Keep your graphics simple and

small so they load quickly. Make the site about your

customer and not about you. You will greatly increase

your chances to capture their business.

I understand that that’s a lot to absorb in one sit-

ting, so I’ll stop for this chapter. In our next chapter,

we will discuss the actual capture mechanism — the

registration form. We’ll talk about what is required

and what isn’t. We’ll discuss the area of DOJ and

NAR compliance, and finally, I’ll give you some tips

to help you get the most customers to “give up their

information” and become a “lead”.

Chapter 6

In the last chapter, I discussed website basics. I inten-

tionally left off one part of the typical website: the cap-

ture mechanism or gateway. Some call it the form or

registration page, but whatever you call it, it is the most

important part of your site. As far as I’m concerned, it

is more important than the website itself. Yes, I really

said that. Let me repeat myself: It is more important

than the website

I’m always amazed when I’m told by veteran agents

— agents who are otherwise intelligent and successful

in every area of their practice — that they would nev-

er put a capture gateway on their website. I look at

them stunned and ask, “Why?” The answer is the truly

shocking part: “Because many visitors would leave and

go to another site.”

Now do you see how ridiculous that statement is?

What difference does it make where they go if they are

not going to you? I say good riddance! Get rid of the

free-loaders. If they are not willing to identify them-

selves to me in exchange for looking at MLS listings on

my site, then I say they don’t qualify to work with me.

I’m not running a charity website. I’m not a free source

of information and services.

Most agent websites today are like a department store

without a cash register. Imagine if Walmart filled their

store with all the merchandise that the typical shop-

per wanted and then opened their door and let any-

one come in and pick up what they wanted. I bet they

would have more visitors that way. But how much

more sales would they do if they installed cash regis-

ters at the front of the store?

Unless you are running a real estate charity, you need

to think about your “store”. Your lead capture gateway

is your cash register. I’m not saying that your website

should charge cash, but there should be an exchange

of value. You give the customer free access to all the

inventory in your market, as well as other valuable in-

formation, and they give you something in return: their

contact information.

And just like large retailers such as Walmart continual-

ly study shopping habits of their customers, you should

be studying the shopping habits of yours. You can bet

that Walmart knows exactly where to put the cash reg-

isters. They know exactly how many to install. They

even know what merchandise to place around the reg-

ister to maximize sales.

That’s what our company does — it’s why we exist.

We’ve made a science of learning customer online

shopping habits, and we continue to test preferences

every day, in real time. For example, we are currently

testing a new version of our LCM (lead capture mod-

ule) and so we are routing a third of all of our traffic

through that new gateway design.

We learned in yesterday’s test that we have discovered

a way to improve lead capture rates by a substantial

amount. So far our margin of error is 3.479%, so we

are continuing to test, but by tomorrow we will know

within a 2% margin of error.

What does that mean, practically speaking? In this

case, the difference is significant: 31.1% capture rate

from our new design versus 25.7% average capture rate

for the same period of time from our current LCM gate-

way. That means that we can reduce our agents’ adver-

tising cost by 21% with this new version if the testing

proves to hold consistent.

That means that we can reduce the average lead cost for

our agents from $4.16 to $3.29! If so, this new design

will be a huge breakthrough for us. We’ve been work-

ing on this new design for months, and we thought that

if our estimates were correct, we could bring aggregate

national lead capture rates for our technology users

from 25% to over 30%. It looks like we exceeded our

expectations.

So how did we do it? In this case, there were a host

of changes, although most were not visible to the cus-

tomer. We changed the way the browser processed the

form, we changed the way the site inserted the lead into

our database, and how we notified the agent of his or

her new lead. We made only a minor visible change to

customer pathway, and we didn’t change or eliminate

any of the information we were capturing. And the net

was a 6% increase in CR or an improvement of 21%!

See, it’s a science.

If you are an agent with a typical real estate website

your capture rate (according to the latest numbers re-

leased in the National Association of REALTORS®

2007 Member Profile) is only 0.87% of your visitors.

Here is the data:

* A full 60% of all 1.3 million REALTOR® have web

sites - nearly twice as many as five years ago.

* There are 780,000 real estate websites and 7.5 mil

lion homes selling (15 million transaction sides)

* There are 19.23 transaction sides available per

real estate website!

* There are an average of 462 website visitors per

real estate website.

* Despite all of this opportunity, the typical

REALTOR® receives a mere four inquiries from

their Web site accounting for only 3% of their

business.

* On average, real estate websites capture

customers at a stunningly low percentile of all

visitors — at a rate of 0.87%!

What if you captured 25% instead of 0.87% of your

website visitors? Instead of your typical website lead

costing you $116, it would now cost you only $4.16!

Imagine what that could do to your advertising and

marketing budget? That single move could have a fi-

nancial impact on your business of literally tens of

thousands of dollars.

So how do you go about installing efficient lead capture

on your website? First, if you don’t do anything else,

just turning on your registration form in the custom-

er path before the IDX link will be a step in the right

direction. Next, you need to decide to either build it

yourself or find a good solution from a third party.

Feel free to look at our solution while you are at it —

our LCM gateway technology works with or without a

website, and it requires no setup or elaborate installa-

tion process. Any solution you look at should pay for

itself in 1-2 leads. If it doesn’t, keep looking. Don’t be

fooled by fancy bells and whistles. Remember Google.

Customers prefer simple.

Finally, I’d like to share a word about DOJ/NAR com-

pliance. I’ve recently written an article about the new

settlement between the US Department of Justice and

the National Association of REALTORS®, and our

company has studied the impact of the new settlement

agreement on our agents at great length.

After consulting with our attorney and spending two

days on the phone with the DOJ and NAR attorneys,

we’ve come away with an unpopular opinion on the

subject of compliance. I’ve had several patronizing and

insulting emails from leaders in our industry about our

position, but at the end of the day our agents will not

run into compliance problems, even if others do.

The problems all come down to the interpretation of

the term “VOW” or virtual office website. In the grand

scheme of things, it’s clear that companies like Zil-

low, Redfin, and Zip Realty are the ones the NAR was

targeting in protecting the listings, and not individual

agents offering IDX links on their websites.

But the simple fact is that the actual settlement docu-

ments define a VOW (for the purposes of the agree-

ment). In the agreement, any website that offers list-

ings (MLS or IDX) to the public is considered a “virtual

office website”, even if they don’t attempt to establish a

formal relationship with the customer.

It is a widely held opinion that those agents with IDX

links and that don’t attempt to capture customer leads

will likely not be targets of enforcement, much like

drivers who drive 60 in a 55 mph speed limit, but they

are clearly required to be in compliance according to

the agreement, and adding a lead capture gateway de-

creases the risk of compliance enforcement.

Nevertheless, as a company who licenses technology

to over 14,000 agents worldwide, and whose business

is the efficient capture of customer data on behalf of

agents, we felt it was necessary to teach agents to com-

ply with the letter of the settlement agreement. We

even put our money where our mouth was, and offered

a fully DOJ/NAR compliant gateway free of charge to

any agent that wanted it.

The reason I mention the subject of compliance while

I discuss installing efficient lead capture technology on

your website is that it would be wise for you to make

sure that any solution you look at be fully DOJ/NAR

compliant. It doesn’t cost any more to do it properly.

In the next and final chapter, I’ll be discussing putting

it all together into a seamless online marketing strate-

gy, and we’ll discuss making the decision of either buy-

ing or building your lead capture technology.

Chapter 7First I’d like to commend you for sticking with me

through the previous six chapters. We’ve covered a

lot of ground, and hopefully you’ve been able to take

something of value away from each chapter. Now we

finally come to the end.

We’ve discussed lots of topics, from technology to ad-

vertising. From theory to practical application. Now

it’s time to help you assemble your own online mar-

keting plan and what specific steps you need to take to

put your newly formed strategy into action. So let’s get

started.

Before jumping into your plan, we need to consider

your budget. In my practice, my online and offline

marketing budgets were initially split evenly. As I be-

gan to see that I got a higher return on investment for

my online marketing, I began to slowly phase out my

offline strategies and spend almost all my marketing

budget online.

With the number of real estate customers who begin

their search online increasing year after year, I think

you should start by apportioning at least half of your

budget to online advertising. So how much should

your advertising budget be? The experts tell us that

you should commit 20% of GCI (gross commission

income) to marketing. I believe that if you use low-

cost online marketing, you can generate more business

than you can handle for 10% of GCI.

So let me suggest this: If the experts say 20% of GCI,

let’s take half that amount (10%) and spend it on your

online marketing. Then when you see the amazing re-

sults possible, you can begin to phase out your offline

budget until eventually you are left with only your 10%

being spent online. One other thing I’d like to mention

about your budgeting is this:

You have to budget your advertising based on what you

want your income level to be, not what it currently is.

For example, if you’d like to gross $100,000 next year,

you should budget for $20,000 in marketing expenses.

That’s $1,667 per month that you need to invest, and

you have to invest it before you get it back. Much like

farmers have to buy seed before they reap their crop,

you must invest in the seeds of your sales, and that’s

your marketing.

Next let’s talk about how much you can afford to spend

per lead in advertising. Using the proper lead capture

technology you should be able to stay well under that

amount, but you need to know what your leads cost you

and whether you are within your budget. Here’s how

you can determine your budget per lead. Find the av-

erage sale price in your market. Multiply that by your

average transaction side percentage, and then multiply

the result by your company split.

For example, if the average sale price is $200,000 and

your average transaction side is 3%, your average gross

commission is $6,000. If you are on an 80% commis-

sion split with your company, your average net com-

mission is $4,800. Twenty percent of that is $960 per

closed deal in advertising.

Now take that number and divide it by 24 (the average

number of leads required to produce a closed transac-

tion), and you have a maximum cost of $40 per lead. If

your eyes are glazing over, get out a calculator and go

back and re-read the first part of the chapter. It’s really

pretty simple.

Now, you need to look at your website. If your cur-

rent website produces leads within your per-lead bud-

get you don’t have to do anything. If you’re like most

agents, however, your cost per lead produced is much

higher than your budget. Nationally, the average cost

per online lead is $116.

That means that unless your average commission (af-

ter broker split) is $13,920 the cost per lead is too high.

($116 times 24 leads per deal is $2,784 divided by 20%

is $13,920) Let’s assume you need to improve your

website capture before spending money. What should

you do next? I believe you need to decide whether you

want to buy better technology or whether it might be

better to build your own.

First let’s discuss building it yourself. If you go back

and study this e-book, you should have the basic infor-

mation you need to start building your own lead cap-

ture technology. Do you have the technical skills to do

it yourself? That’s what I did back in 2002. I looked

around on the Internet for a ready-to-go solution and

couldn’t find one. All I found were template websites

for agents, all focused on giving out information rather

than capturing customers.

So, I got a couple of books and learned to build my own

using Microsoft Publisher (not recommended). To be

honest, the last thing I wanted to do was spend hours

every night after work learning to build my own web-

site, but I didn’t have any choice. Frankly, if I’d have

been able to get the technology for less than the price

of a magazine ad a month, I would have done it in a

second.

Another solution might be to find a low-cost geek to

build it for you. A good place to start looking might be

asking at your local high school computer department,

or advertising on Craig’s List or Guru.com to find a

low-cost geek for hire.

Again, if it were me, and the technology was available

reasonably, I’d buy it. My problem was that it wasn’t

available when I needed it so I built my own. And it

worked so well that I eventually started licensing my

solution to other agents, and our technology division

was born.

Many generations later, our solution is only $120 per

month, turn key. I’d appreciate it if you’d at least take a

look at it. It comes with an integrated contact manager

(better than Top Producer or Agent Office) and a free

website.

But many agents use their own existing website, and

that works fine too.

The point is that if it reduces your cost per lead from

$116 to $4, it’s nearly paid for itself on the first lead.

But whether you build it yourself or buy it, it is abso-

lutely imperative that you acquire good lead capture

technology before spending advertising money on an

inefficient website. Without an efficient gateway, your

cost per lead is just going to be very high, and you’ll run

out of money before you attract enough customers.

I’d like to mention one other thing about your lead cap-

ture solution. You should search for a technology that

is integrated with a contact manager or CRM. The rea-

son for this is that many of your customer leads will

come to you during phase one of the buying cycle.

Because of that, you will need to manage your commu-

nication with them for as much as 90 days before actu-

ally showing them houses or listing their property. In-

tegrated contact management will cut your work load

down to a fraction. Imagine keeping up with hundreds

of conversations and emails with dozens of leads.

With our LCM gateway technology, when a lead is cap-

tured, it is not only emailed or text messaged to the

agent, but it is simultaneously dropped into their con-

tact manager to assist in hassle-free follow-up. With a

single click, our agents can see the entire history of any

customer. With another they can access dozens of tem-

plate emails, make their own templates, or send a non-

template email and have it placed in the permanent

history file. Believe me, when you are working lots of

leads, having the integration is a huge advantage.

Well, that brings me to the end. Feel free to print out

the installments and to read them again prior to taking

your final exam. It's only 10 questions and they are all

true/false, but if you don't know the material, you will

likely not get the eight correct you need to receive your

certificate or to qualify toward your FAST® Certifica-

tion. So do take the time to study what I’ve shown you

and then — more importantly — to apply it. If you do,

your real estate business will never be the same again.

Final Note fromMatt Jones

Thank you for reading this The Science of Online Mar-

keting e-book. I hope you enjoyed it. More important-

ly, I hope you will take the time to apply the principles

that I showed you. If you do, your business will never

be the same again. This is my sincere promise. It’s my

greatest honor to be able to play a small part in your

success.

I can’t begin to tell you how much time and effort went

into the writing, editing, typesetting, proofing, and

publishing of this e-book. I trust that you will enjoy

it, and that you might even want to share it with fellow

agents or friends. Please encourage them to buy their

own copy -- let’s face it: the price is very low consider-

ing the information found inside. If they don’t buy it,

they won’t value it anyway, so please encourage them

to make the tiny investment themselves. It will help us

to continue to produce valuable training at affordable

prices.

If you received this publication from anyone other than

a licensed reseller, or directly from me, you’ve received

a pirated copy. Please do the right thing and notify me

via e-mail or phone. My email address is Matt.Jones@

FavoriteAgent.com and my direct phone number is

910-808-1212. Okay, here is my “official legal notice”:

This publication, in its entirety, is protected under the

US Copyright Act of 1976 and all other applicable in-

ternational, federal, state and local laws, and all rights

are reserved.

Thank you so much for reading. May you have much

success in your practice of this the greatest business in

the world -- real estate!

About the Author

Author, speaker, syndicated columnist, local broker-

owner, and CEO of FavoriteAgent.com, Matt Jones is

not your typical real estate guru. Unlike many of to-

day’s “experts” he is actually personally involved in the

real estate business on a daily basis. In 2002 Matt listed

114 homes during his first year in the business and did

$7 million in production in a market where the aver-

age sale price was only $100,000. By his third year, his

single-agent practice had grown to become the largest

brokerage in his market of Fayetteville, North Carolina.

Jones’ company has been profiled by numerous ma-

jor media outlets as an innovator and a pioneer in the

industry, and CNN’s Pulse on America claimed Favor-

iteAgent.com is “changing the way real estate is done

in America.” Over 20,000 agents throughout the US,

Canada, Great Britain, Australia, and New Zealand

have licensed his virtual office technology, and over

100,000 agents worldwide have taken his real estate

training.

Although Matt keeps an incredibly busy schedule, he

invites his readers to contact him online or by phone

with any questions or comments. His phone number is

(910) 808-1212, and his email address is Matt.Jones@

FavoriteAgent.com.

Books By This Author

LCM:

The Secret to Success in the New Age of Real Estate

The Ultimate Listing Presentation

Traffic:

How to Sell Fast and Net More

Becoming a Mega-Producer

The Science of Online Marketing

Ten Steps to Real Estate Success

20 Questions:

Everything You Always Wanted to Know about

Real Estate... but Were Afraid to Ask

The Virtual Office Model

The Science of Online Marketing

Spinnaker Publishing

2915 Raeford Road, Suite 103

Fayetteville, NC 28303

Copyright ©2010 Matt Jones

Interior text design and cover design by Janet Cherry

ISBN: 978-0-9770438-5-9

All rights reserved. Except for brief excerpts used in re-

views, no portion of this work may be reproduced or

published without express written permission from the

author or the author’s agent.

First Edition