There was an interesting article this week on Inman News, which concluded that real estate agents are spending too much money trying to be found online. NAR’s 2014 Trends report was used as the basis for the conclusions, but the answers that those numbers should have fleshed out might actually be quite different.

The study showed that around 10 percent of buyers who closed on a transaction found their agent through a website. Of course, this number is dwarfed by personal connections and referrals. Close to two out of every three buyers and sellers find their agent through their friends, agents they’ve worked with before, relocation companies, etc.

The obvious takeaway is that agents should focus primarily on their sphere–making new personal connections and staying in touch with current connections. There’s no argument there. This group of consumers, though, could be said to be a “kept” client group. A large portion of them are going to work with a “trusted source” no matter what–a friend/family member/former agent/relocation company out of a sense of loyalty or compulsion. For unassociated agents, focusing time on someone else’s “kept” buyers and sellers who already have a trusted real estate source could actually be just running on the hamster wheel.

The low-hanging fruit, on the other hand, are the 3 out of 10 buyers who are not using a “trusted source” to find their home. They’re open to researching themselves, and independently making a decision to work with someone they don’t yet know well. Just as often, they have zero strong connections to anyone in the industry and are simply looking for someone to get them into a home.

To say that focusing time and money on possibly the easiest clients to convert and become their first and foremost real estate advisor would be silly. These people can be prospected through traditional means, but here’s where the numbers get interesting.

Approximately 30 percent of the market is not using a trusted source. Right now, one out of every three of them is being converted through a website.

5 million homes were sold last year. 500,000 buyers found their agents through a website.

We talk a lot about focusing on a niche and owning it in real estate. Ten percent of the entire real estate market is a massive niche to pursue. Better tools could potentially allow agents to improve that conversion rate even further in this arena.

I have only respect for those real estate agents who do traditional prospecting. The top producers in the country are, by-and-large, the folks that shake hands, get on the phone, and knock on doors (or at least their teams do it for them). At the same time, shallow statistical comparisons that attempt to minimize the value of online prospecting (a huge market segment) aren’t beneficial in a real analysis of the value of a marketing dollar.

Sitting in an office doing “floor time”, which apparently converted 3 percent of all buyers and sellers last year, works for some. Considering how many hours of an agent’s life that can consume, a comparable number of hours devoted to an online lead generation program would, in my opinion, greatly outpace the success of floor time.  It would also be much less likely to slowly melt the brain of many agents.

The ROI of the marketing and prospecting we do can’t be compared simply on raw percentages. If we look at the potential clients, their likelihood of being “attainable”, the number of hours needed for a program, and the financial returns, all signs point to folks who are dedicated to online prospecting doing very well compared to their peers.