Lead gen 2.0: RE/MAX app will go through agent contact lists to predict sellers
The app is the result of the company’s December acquisition of tech startup First
RE/MAX Holdings is taking its latest lead generation play to the robots.
The company will launch a machine-learning app exclusive to its agents on Monday that uses machine-learning to comb through agents’ pre-existing contact lists and predict who is most likely to sell their home — and tells agents when they should reach out. RE/MAX announced the app on its fourth quarter earnings call Friday.
“Agents are losing patience on just ‘buying leads,’” said RE/MAX CEO Adam Contos during the call. “In many cases, they have the leads they need.”
Agents will have to pay a $49 monthly subscription fee to access the app, which will initially only be available in the U.S. On the call, RE/MAX CFO Karri Callahan said the company is subsidizing the cost of the app for agents by 50 percent.
“We think this is a really compelling opportunity… driving at the heart of lead generation,” said Callahan.
The app was built by North Carolina-based startup First, which RE/MAX acquired in late December.
The app, which was developed by First and bears its name, can search through agents’ contact list in three minutes and ascertain where they live and what property they own, its founder Mike Schneider told Inman in December.
In addition to alerting agents when they should reach out to specific contacts who are most likely to sell, the app also organizes agents’ contacts and provides reports on how much business they do within their network.
The First app is already on the market and being used by non-RE/MAX agents. Those pre-existing user contracts will expire in 2020 and going forward the app will be exclusive to subscribing agents at RE/MAX, Callahan said.
First was founded in 2016 and raised $16 million in venture capital funding. Though the financial terms of RE/MAX’s acquisition of First were not disclosed, Callahan said on the earnings call that the company paid using cash on hand and offered up equity.
The First acquisition comes amid RE/MAX’s broader push in technology investment. In 2018, it acquired booj, a web development and software firm that’s now become a platform of agents tools, including customized agent websites. Earlier this year, it announced a lead referral partnership with Redfin, which was canceled two months in.
RE/MAX noted during the call that First’s staff would be developing other tools and was part of a bigger push from the brokerage to build its “bench strength” of technologists, according to Callahan.
Overall, the company reported $68.2 million in revenue, a 34 percent increase year over year compared to 2018’s revenue of $50.8 million. The increase was attributed to RE/MAX mortgage business, Motto, and revenues from ad and marketing platform Marketing Funds, which it acquired in January 2019.
Expenses grew by 17 percent to $35.2 million year over year. Callahan explained the increase as in part due to higher equity-based compensation and increased legal costs. She noted that for 2020, RE/MAX expects a $4.5 million drag on earnings partly due to legal fees.
The company was named in two class-action lawsuits last spring alleging that the National Association of Realtors’ buyer broker compensation rules violate antitrust law.
The company’s total agent count grew 5.3 percent with the addition of more than 6,600 agents to a record figure of over 130,000.
Write to Erin Hudson at email@example.com