The Power of CRM: What Does a Lost Lead Cost Your Business?

CRM systems play an important role in capturing and managing customer interactions, turning leads into lasting relationships.

CRM systems play an important role in capturing and managing customer interactions, turning leads into lasting relationships.

But just how much does a lost lead cost your business? $220 is the figure for a Dubai real estate agency (based on our probably imperfect calculations).

Allow me to explain. Firstly, by ‘lost leads’, I mean enquiries that come in to an agent but do not end up in the agency’s CRM. Most businesses have systems in place to automatically capture lead details from email and phone leads. But less so for WhatsApp, which in Dubai account for 60-70% of inbound property leads. And so WhatsApp leads into the CRM depend heavily on the agents manually inputting them in many instances.

This is not a fun task. And agents are particularly demotivated to do this if the lead in question is not likely to result in a transaction for them.

According to the boss of a fairly prominent Dubai agency, between 2-5% of enquiries result in transactions. This means that out of every 100 WhatsApp leads that come in, 95-98 are at risk of not being entered into the CRM.

Important emphasis here: an agent tends to not register leads in the CRM that are unlikely to result in a deal for HIM/HERSELF.

Maybe because the property that the lead enquired about was no longer available. Or didn’t have an elevator. Or whatever. But….That doesn’t mean that the agency doesn’t have another property in its inventory that the lead might be interested in. Without the lead details in the CRM, the agency will probably never know because the lead is essentially lost.Now, let's imagine that the leads DO end up in the CRM. From here, the agency can show the lead its full inventory of suitable properties. Which means it still has a chance of doing a deal even if the initial property enquired about did not go anywhere.

The 2-5% conversion rate from above means that there is a 2-5% probability that each initial lead converts into a transaction. For the leads that are now in the CRM and are being shown more properties, let's take the low end of 2% chance of conversion on an alternate property. To calculate what my high school maths teacher called the ‘expected value’ of every lead we simply multiply this 2% by the average commission ticket of around USD11k at our above-mentioned agency:2% x USD11k = USD220.If the conversion rate and/or average commission size are higher, this figure rises. If an agency is getting say 1000 WhatsApp leads per month and even half of those are not being recorded into the CRM. The agency is potentially missing out on USD110k monthly in lost revenue. Are you starting to see how much value is being left on the table?And it's not only the direct commission. What about ancillary services in the purchase process? And possibly taking the buyer's property if they also happen to be selling? And overall brand value based on great customer service? Calum White, Richard Waind, Lewis Allsopp, Luke Remington #realestate #property #dubai #dubairealestate #uaerealestate #whatsapp #crm #leadmanagement