Premier Agents to Zillow: The Leads Are Weak
I heard it again and again: The leads are no good. They’ve dropped significantly in quality and quantity. We don’t feel like Zillow is being honest with us.
Within minutes of my “Dear John” letter to Zillow hitting Inman subscribers’ inboxes, my phone began to ring. It was a Friday afternoon (usually pretty quiet for me) and my husband, who was working from home that day, asked what was going on.
“Just another agent who had a bad experience with Zillow,” I told him. It seemed that many other agents had experienced the same noticeable decline in lead quality and quantity — and that the drop occurred right around when Zillow rolled out its Flex program.
Background of Zillow’s Market-Based Pricing vs. Flex Programs
As background, until recently, Zillow operated on a market-based pricing (MBP) model, where “Premier Agents” purchased a share of leads and exposure based on home prices and compeitition within a specific zip code. More recently, the company rolled out a “Flex Program” that operates in some of the same areas as the MBP “Premier Agent” program. In the Flex program, Zillow provides connections and leads at no upfront cost “to the agents best positioned to convert them to home sales,” says the Zillow website. “In Flex, we are aligning the success of our business with yours — we only win when you win.”
Yet countless agents already enrolled in the MBP program — including many who have committed to months-long contracts — don’t feel like they’re in a win-win situation. Many agents paying for leads through the MBP program (including me) are very concerned that these two lead-distribution models directly conflict and compete with each other. And many of us are also concerned that MBP “Premier Agents” are subsidizing the Flex program, and that the best leads are going to agents who pay a referral back to Zillow. Plus, many of us have other questions — for example, will we be completely obsolete on the portal if and when Zillow completely transitions to this model?
Feedback from Dozens of Agents Across The Country
“You so eloquently wrote exactly how my husband and I have been feeling,” texted one Realtor from the West Coast. “We have spent $5-$6k every month (with Zillow) in the last five years and thrived until recently… We’re locked in at this price for another 5 months and I only hope to have the courage to break up with them once and for all.”
Terry McDonald, an agent with EXP in North Carolina, was even more direct. “Meg, you expressed this perfectly,” he said, of the Inman “Dear John” piece. “I’d been with Zillow for eight years, Best of Zillow from the beginning, my lead count was cut in half since July, and the quality went down to the vacant cheapest units on the market… Since Zillow curates 90 percent of the leads, why wouldn’t they send their more profitable Flex agents the best?” he asked.
Mc Donald concluded: “Like you, we paid a lot too over the years… good riddance.”
Of course, after the article hit the web, Zillow followed up to ask about my “experience” with the program. This is what a Zillow employee who asked to be identified as a “Partnership Rep” said about the mechanics of its Flex and Market-Based Pricing programs.
“To clear up a couple of pieces of misinformation about how we deliver leads across Flex and MBP, Zillow does not select which connections go to a partner in market-based pricing or Flex — these are assigned at random, and come from the same group of customers,” they wrote.
“Second, our investment in Flex doesn’t diminish the quality of connections we deliver to our market-based pricing partners. While some tests or pilots may come to Flex first, we are committed to innovation that benefits all our partners.”
“Third, while more agent demand in a market does impact the cost of connections to our MBP partners, we carefully evaluate market conditions before adding Flex partners to a market and adjust budget caps regularly to foster a marketplace where great agents, like you, can profit from their investment with us.”
The “Partnership Rep” continued her email:
“We look forward to partnering with you in the future, should you change your mind about maintaining your investment with us.”
I can confirm that I won’t be resuming my full Zillow spend anytime soon, and it seems like agents in many areas are reconsidering their investments in Zillow’s MBP program. I follow my own home market (Madison, NJ, 07940) very closely, and for several weeks, 54 percent of market share in my zip code has been available. A few years ago, agents had to wait weeks or months to buy into this zip code.
And perhaps in a most telling turn of events, I’ve seen a glut of ads promoting the “Premier Agent” MBP program come through my social media newsfeed in the past week, since my article was published and the sudden and dramatic end of Zillow’s Offers and iBuyer program. I’ve never seen advertising like this before, and have to wonder: Is Zillow looking for more revenue to replace its failed iBuyer initiative? Or is it just the Algorithm Gods having a little fun with my newsfeed?
I guess I’ll never know, but Zillow, please understand that the magic is gone for me and for many other agents who trusted and partnered with you for years.