Lead-Source Diversification Practice Questions

Question 1 of 5

During her annual review, a registrant discovers that her cost of acquisition varies dramatically by lead source: referrals cost $200/transaction, online leads cost $2,800/transaction, and open houses cost $1,500/transaction. How should this inform her planning?

• AUse cost-of-acquisition data to optimize, not eliminate: (1) invest more in referral systems — at $200 per transaction, every improvement in referral volume produces high-margin growth, (2) evaluate online leads critically — $2,800 per transaction may still be profitable if the average commission is $12,000, but the registrant should investigate whether cost can be reduced through better lead nurturing, targeting, or platform selection, (3) assess open houses — at $1,500 per transaction, this is a mid-efficiency source worth maintaining while seeking optimization, (4) the optimal mix is not 100% of the cheapest source because: (a) referral volume has natural limits, (b) diversification reduces risk, and (c) some sources provide ancillary benefits (open houses generate seller impressions, online leads build database), and (5) set cost-of-acquisition targets for each channel and evaluate quarterly, redirecting budget from underperforming to overperforming channels
• BEliminate all lead sources except referrals since they have the lowest cost, because referrals have natural volume limits, and a registrant cannot simply will more referrals into existence, considering that referrals have natural volume limits, and based on the applicable regulatory requirements and standard industry practices governing this type of real estate transaction in Ontario real estate
• CAll lead sources should have identical acquisition costs, since different lead sources inherently have different cost structures, and referrals are inexpensive because the relationship already exists, considering that different lead sources inherently have different cost structures, and based on the applicable regulatory requirements and standard industry practices governing this type of real estate transaction in Ontario real estate
• DCost of acquisition is irrelevant if the registrant is meeting her income goals, particularly where the business performance metrics reflect the specific market segment, service area, and competitive environment in which the registrant operates

Question 2 of 5

A registrant wants to create a referral marketing program to systematically generate referrals from past clients and professional contacts. What are the essential components of an effective referral program?

• ASimply asking 'Do you know anyone who needs a registrant?' is sufficient, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate, and
• BAn effective referral program includes: (1) systematic contact cadence: monthly market newsletter, quarterly personal contact, annual home value assessment — maintaining top-of-mind awareness is the prerequisite for referrals, (2) specific asks: rather than vague requests, provide specific scenarios: 'If you hear of anyone at work planning to sell their home, I would appreciate an introduction,' (3) make it easy: provide shareable content (market reports, home value tools) that give past clients a reason to connect their contacts with the registrant, (4) acknowledge and reward: thank referral sources promptly (personal note, small gift within RECO guidelines), regardless of whether the referral converts, (5) track and measure: record all referral sources in CRM to identify top referrers and measure program effectiveness, (6) reciprocate: refer business to professional contacts (lawyers, mortgage brokers, contractors) who will reciprocate with client referrals
• CReferral programs should offer cash incentives for each referral, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• DOnly past clients should be included in a referral program, and real estate

Question 3 of 5

A registrant wants to generate leads at open houses more effectively. Currently, they get 15-20 visitors per open house but only capture contact information from 3-5. How can they improve lead capture?

• AMake sign-in mandatory and refuse entry without contact information, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• BImproved open house lead capture strategies: (1) value exchange: instead of a plain sign-in sheet, offer something valuable in exchange for contact information — a neighbourhood market report, a list of recent comparable sales, or a 'Buyer's Guide to This Area,' (2) digital sign-in: use a tablet-based registration that makes the process feel professional and collects complete information (name, email, phone, timeline, pre-approval status), (3) engagement during the visit: have a conversation with every visitor — personal interaction makes them more willing to share information, (4) follow-up incentive: 'Leave your email and I will send you a full market analysis of this property and others like it,' (5) social media integration: invite visitors to follow on social media for listing updates — captures them digitally even without formal registration; target: capture information from 80%+ of visitors (12-16 out of 15-20)
• CContact information is not important at open houses, and as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• DOnly ask for names and nothing else, and as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate

Question 4 of 5

A registrant tracks her referral sources and finds that 60% of her referrals come from just 5 past clients out of 200+ in her database. How should this insight inform her referral strategy?

• AUse the insight strategically while maintaining broad engagement: (1) study the 5 top referrers — what makes them different? They likely have large social networks, are naturally helpful connectors, and had exceptional experiences they enjoy sharing, (2) invest disproportionately in these relationships — VIP treatment, personal attention, and exclusive events, but do not reduce service to others, (3) identify similar profiles in the remaining 195+ clients — others may have the same characteristics but have not been activated yet, (4) create a tiered communication strategy — the top referrers receive the most personal, frequent contact; the broader database receives regular but less intensive touchpoints, (5) understand the risk of concentration — if one of the 5 moves, passes away, or simply stops referring, 12% of referral income disappears instantly; diversification reduces this risk
• BFocus all relationship maintenance efforts on only those 5 clients real estate, as the applicable regulatory framework and industry practices establish the standards and procedures that govern how this type of matter is addressed in Ontario real estate
• CThe referral concentration is a sign that the other 195 clients are not worth maintaining, and real estate
• DStop tracking referral sources because it creates favouritism, and

Question 5 of 5

A registrant receives a referral from an out-of-province agent in British Columbia. What additional considerations apply compared to an intra-Ontario referral?

• AOut-of-province referrals are handled identically to Ontario referrals, and
• BInter-provincial referrals have additional considerations: (1) the BC agent is not registered in Ontario and therefore cannot perform any trading activities in the Ontario transaction — they can only make the introduction, (2) the referral fee arrangement must comply with both provinces' regulations — the fee flows from the Ontario brokerage to the BC brokerage, (3) the Ontario registrant has full responsibility for the client's service in the Ontario transaction with no involvement from the BC agent beyond the initial referral, (4) documentation should clearly define the referral as an introduction only, (5) HST implications may differ on the inter-provincial payment, and (6) the Ontario brokerage's broker of record should review the arrangement to ensure compliance
• COut-of-province agents can actively participate in the Ontario transaction alongside the Ontario registrant
• DReferral fees cannot be paid across provincial boundaries