Zillow is a controversial topic in the real estate professional community. However, it can be highly useful to agents if used correctly. If you’re wondering what we’re talking about, then look no further than Zillow Premier Agent.
Related: Make sure you’re maximizing your lead generation efforts by reading our complete guide to real estate marketing.
What Is Zillow Premier Agent?
Zillow Premier Agent is a feature in Zillow’s online platform that lets real estate agents pay to be a preferred contact when someone inquires about a listing on their platform. At the product’s core, it’s a lead generation in the form of Zillow passing on a captive lead. If someone is eyeing a home on their site, but don’t have a buyer’s agent, you can connect with them.
While it’s a relatively new product, it’s clear that Zillow has big ambitions and will likely only grow from here. For that reason, you should consider Zillow Premier Agent as part of your marketing strategy. Read on to learn how the product works, pricing, pros and cons, and whether we think it’s worth the cost.
How The Lead Process Works
Before diving in, you should know how Zillow’s Premier Agent process works. It’s really quite simple, as they’re just passing along their inbound leads who’ve showed interest in connecting with an agent.
1. Customer Inquires
Customers using the Zillow platform are able to browse a listing and click “Contact Agent.” This essentially bypasses the need to route contact through the MLS and cuts out the middle-man.
Image Source: Zillow.com
2. Zillow Verifies
After clicking “Contact Agent,” you have the option to connect with the listing agent (the agent who created the ad) or a Premier Agent. The agent profiles show both reviews and number of recent sales.
3. Rep Transfers
By selecting an agent with whom you’d like to connect, the validation process kicks in. During this step, a company representative will call you to verify you’re serious about inquiring. If they determine you are just kicking tires, they won’t pass along your contact information. If you are a serious candidate, they’ll forward the call to you.
4. You Close
Once the prospect is connects with you, it’s your time to shine. Once you connect, you can see the homes they have viewed, track your interactions, and route follow-up calls to your team. Talk about an all in one real estate CRM!
How You Show Up
You’re probably wondering how you even show up on the list in step 2. Well, that’s the whole premise of the product model. There are three Premier Agents who have paid to be included in the results. We’ll get into pricing in the next section, but the core principal is that the agent willing to pay the most shows up first in the results. This is known in the advertising space as an “Ad Exchange” model.
Recommended Agent Positions
As you can see in the above example, there are three agents. Even though Diane shows up first, Rick has more recent sales, more reviews, and a professional looking photo. If I were interested in this house and knew no agents in Cape Cod, he’d be my first choice. This is my own opinion, but it looks like he’s taken the time to optimize his profile. If he’s invest time into his portfolio, my thought is that he’ll likely invest the time required to negotiate the transaction on my behalf.
Share Of Voice
In addition to your position on the Contact Agent page, you’ll also be allocated a Share Of Voice (SOV). This means that by spending more than the competition, Zillow will send you a higher percentage of the total leads for that zip code. And this, of course, is all determined by their variable pricing model.
Zillow Premier Agent Pricing
Unfortunately, pricing isn’t as simple as some of the other popular real estate CRMs. Ads vary by market and demand, which is a model similar to Google Ads. For example, if you’re selling a home in Beverly Hills that’s listed at $4,000,000, your acquisition cost will be much higher than a home in Detroit with a list price of $50,000.
Zillow’s marketing team is genius in this regard because they understand the basic laws of supply and demand. If they are taking a cut of the ad revenue, they have incentive to charge more for expensive listings where agents are more willing to pay more per lead. How much you’ll pay is determined by two factors.
1. Base Cost
The “base cost” of each ad is determined by total demand in each zip code. If you’re the only Premier Agent in Red Oak, IA, you’re likely not going to pay very much, as there are less listings and home prices are much lower than somewhere like Beverly Hills.
In addition to listing location, pricing is impacted by competition. Just like an auction, if you’re competing against 10 other agents for ad space, prices will naturally rise as the bidding increases. The more agents paying for ads in any given location, the higher prices rise.
The pricing structure is simple once you understand it, but is best illustrated with an example. Let’s say there are three agents in a given zip code participating in Zillow’s Premier Agent platform. We’ll use 3 agents for our example as there are 4 total spots on the agent listing page, and the first is usually the listing agent. That leaves 3 spots to fill.
Total SOV (Share Of Voice) is calculated by multiplying the number of agents by 100%. With 3 total agents, the total SOV is 300%. Then, each agent’s total ad budget (relative to the total ad budget) is multiplied by the total SOV.
Percentage Budget – Say Agent #1 spends $100, #2 spends $200, and #3 spends $300. This means the total SOV is 300%, and the total ad budget is $600. We’ll first calculate each agent’s percentage of total budget.
- Agent 1 – $100/$600 = 16.7%
- Agent 2 – $200/$600 = 33.3%
- Agent 3 – $300/$600 = 50%
Individual SOV – Next, we’ll multiply each agent’s percentage budget by the total SOV of 300% to get each individual agent’s total Share of Voice.
- Agent 1 – 16.7×300 = 50%
- Agent 2 – 33.3×300 = 100%
- Agent 3 – 50.0×300 = 150%
If you’re still confused, don’t worry. It took us a while to figure out what this means. Basically, Agent 3 will get 3 times the amount of leads as Agent 1, and 50% more leads than Agent 2, in addition to showing up higher on the Contact Agent list.
While we’ve never personally used Zillow Premier Agent, a few of our acquaintances have. Some say it’s a waste of money, and others swear by it. However, we’ve found the biggest differentiation between the two opinions is the total marketing budget of the agent.
One team leader we spoke with had $100,000 as his total marketing budget and he looked at the ROI of this product versus other software products. He swears by Zillow Premier, as it produced a high conversion rate at a modest lead generation rate. However, he’s also using other products, so this is just one way he generates leads. Granted, he is targeting higher-end homes in in a low competition zip code, so his experience isn’t a good barometer for the rest of the country.
On the other hand, we spoke to a few single agents who had tried to product but they found their organic efforts to be more fruitful than paying for leads. I personally think the difference comes down to total marketing dollars available. If you’re a team with 10 agents and have a healthy stream of income, this product can act as gas on your fire to generate even more leads than you’re currently producing.
However, if you’re an agent with a limited marketing budget, you can find less expensive ways to generate leads effectively. Either way, it’s still worth considering. Given pricing is determined by both location and competition, ad costs will vary.
At the end of the day, your ROI runs the show. If you pay Zillow $500 per month and get $5,000 in commissions, your total ROI is 10x. If direct mail costs you $500 per month and you’re only getting $3,000 in commissions, your total ROI is 6x. In that case, Zillow is your best bet. You can always test the market – you may be surprised at the results.
Should You Use Zillow Premier Agent?
In our experience, teams with large budgets have had better success with this product than single agents with limited money to spend. However, ads are location-specific, so it’s worth calling Zillow to get sample pricing. After all, marketing is most effective when you can reach a large amount of people using multiple methods. Because the company continues to grow every year, we think Zillow Premier Agent is worth a look.