On the 438th episode of Mail-Right Show, Robert Newman and Jonathan Denwood discuss lead generation providers— Zillow Premier and Flex. Robert Newman is the founder of a real estate marketing company called InboundREM, which focuses on inbound marketing methods like SEO and story lead attraction conversion methodologies. On the other hand, Jonathan Denwood is the joint founder of Mail-Right, which builds great-looking websites on WordPress with CRM, a lead-generative platform, text messaging, email, and a social media calendar.
About Zillow
When Zillow consolidates its operations, it is expected to direct most high-quality leads to its own Zillow teams. In contrast, less qualified leads will be distributed to other agents. This approach allows Zillow to prioritize its salespeople, take a significant percentage of the revenue, and effectively manage its lead distribution.
Buying leads from Zillow means funding one of its strongest competitors, which may increasingly pose a challenge over time. Despite this, many agents overlook the issue, assuming it is not an immediate concern. As more funds flow to Zillow, the platform becomes more sophisticated, making it increasingly difficult for individual agents to operate independently. Zillow also trains new agents, who often become accustomed to working only with Zillow leads.
Google, which holds considerable influence in the real estate sector, is considered a significant competitor to Zillow. However, Google is generally seen as a less aggressive player than Zillow, which is perceived as actively seeking to undermine real estate agents. Embracing a hyperlocal strategy may be the key to countering Zillow’s dominance, as Google is less likely to threaten the real estate profession directly.
The Basic Outline of Zillow Premier Agent
Zillow’s Premier Agent program is what the company built its business on, primarily focused on selling leads through its main platform. When users visit the Zillow website to search for properties, they encounter pop-ups, sidebar advertisements, and other ads designed to capture their name, email, and phone number.
One particular feature of Zillow Premier is the display of specific properties with an agent’s name listed underneath, often leading users to assume that this agent represents the seller or buyer. However, this agent may have no real connection to the property, which can be misleading. The lead generated is then sold to a group of agents, and the allocation of leads is managed through a computerized system that evaluates various metrics, such as how quickly an agent responds to the initial lead. This system uses multiple inputs to determine, on a rotational basis, who will receive the lead in a specific area.
Zillow Flex Payment Structure Explained
Premier Agent is a demand-based pricing program. Pricing is not flat; the cost can be as low as $600 if there are available zip codes and leads. However, if demand is high, prices can rise to $3,000 per zip code or area, with no guarantee against competition. Over the years, Zillow Premier has attempted to improve lead quality by verifying them through calls.
Agents used to be frustrated when leads became renters after paying $600. In highly competitive territories, such as urbanized cities, the cost per lead increases significantly, as does the quality and rotation of leads. The price varies greatly depending on the agent’s location, whether in a major city like Los Angeles or Las Vegas, a state like Florida, or a small town in Kansas.
Furthermore, Zillow Flex is an invite-only program with no upfront fees, but it takes 35% of the commission on property sales. Agents must record conversation details and progress in a specific app, and Zillow periodically reviews their performance. Payment can be made through the title company or by check, and Zillow is strict about collecting fees. Agents must be top-tier performers with a credible track record to qualify for Flex.
Overall, Zillow needs to lower its prices as the market has become more challenging, and agents not making a substantial profit from buying leads will struggle.
Zillow Premier Agent vs. Zillow Flex
Zillow Flex competes with a