Pull the plug or double down? Why one brokerage invested in new tech to get more value from their low-conversion paid leads

Stephens Real Estate describes themselves as a "traditional, full-service brokerage." And everything from their location — in the heartland of Lawrence, Kansas — to their business model does seem pretty conventional.

But when new broker/owners Pat McCandless and Chris Earl stepped in to run the firm in 2013, they knew that continued success would require that they innovate and invest in technology for their agents and clients.

Here's how they created an office technology culture that didn't interfere with the company's longstanding traditions.

Q. You recently had to choose whether to invest more or pass on your primary online portal contract. What provoked this?

Pat McCandless: We purchased the company in January 2013, and for the first year we really just focused on not interfering in any way that would derail their longstanding success.  We are one of the top companies in the area and our reputation is excellent. But we did realize our support systems were out of date; in order for our agents to maintain our standards of service, we had to update those support and tech systems.

Q. What systems are you talking about, and how did you first learn that your systems were no longer efficient?

Chris Earl: Two weeks before renewal of our contract with realtor.com®, our sales representative, Richard McDonald, came to explain changes to our existing offering. The program we had been using was being transitioned and we weren't able to renew the contract for our web leads in its current form.

Surprisingly, Richard did not recommend we go forward with a different product. He had conducted an analysis of the response rate we were providing for leads, and it was less than ideal. Some leads were responded to quickly, others were not and some did not receive any response at all. Our conversion rate was at 3-4 percent, when it should have been 8, 9 or 10 percent.