—Zig Ziglar, (1926—2012), American Author, Salesman, and Speaker
Lead generation is an indispensable part of your real estate business. In fact, without a steady stream of leads, there is no real estate business. In the words of Gary Keller, author of The Millionaire Real Estate Agent, “Nothing is more important to your sales career than prospective buyers and sellers. To have a viable business, you simply must have the client leads. To have a business that pays you a lot of money, you will need a lot of leads.”1
Alas, far too many new agents lose sight of the central importance of lead generation. Admittedly, there is a lot to take in when first starting out. And it’s easy to get distracted and carried away with other reasonably important tasks. As Keller writes, “some real estate agents miss this not-too-subtle point and end up spending their time on other less financially rewarding activities.”2
Do not let this happen to you. Whatever other important tasks you’re working on to build your real estate business, always remember this: The real estate business is about generating leads. As Keller makes clear: “No leads means no sales.”3 In fact, he concludes, “you should think of yourself as being in the ‘lead-generation business.’”4
Feed the Funnel, Starve the Beast.
A lead is the name and contact information for a potential client. It could be something as simple as a first name and an email address, or even a referral through Facebook, LinkedIn, or Twitter. It could be a walk-in that stops by the broker’s office when you’re on duty. Maybe it’s someone you met at an open house, or maybe it’s a name and number you picked up from a brand new friend.
Lead generation is doing whatever works to create these connections of potential clients. Simply getting someone’s name and contact information, however, is not lead generation. Leads are people who are potentially interested in buying or selling a home. They don’t have to be interested now or even within six months to be considered a lead. But they do have to express some interest.
Everyone else in your network is simply a connection. Nevertheless, connections are also key to your business (and your life), as they may become leads in the future (or colleagues, partners, or friends).
The real estate funnel is the process you and your potential clients go through together to meet their needs of either buying or selling a home. Think of “the beast” in this case as anything that is attempting to take your attention away from effectively helping your clients through this process. Thus, to “starve the beast” is to consistently resist any and all distractions, no matter how ravenously hungry they may be.
Generate Leads with Relentless Consistency.
Many real estate agents consider lead generation the real “work” of a real estate business. If you do this consistently (i.e. every day, week after week, for a minimum of 3 to 4 hours a day), you will ensure that you always have a steady stream of new clients. Neglect this vital work, however, and your business will quickly begin to crumble. In fact, this task is so important I recommend that you write it into your schedule and commit to doing it every day at a specific time (ideally, in the first part of your day—see willpower depletion).
Doing the work of lead generation consistently and continuously is key. Whether you think you can knock this out with just 2 hours a day, or whether you make a much more impressive commitment of 4 hours each day, this has to be done on a regular, ongoing basis. You may take some time off thinking that you’re still getting plenty of business, and decide to take a little more time off—all without realizing that the consequences have yet to hit. Perhaps it will be a few weeks or longer before your phone goes dead. But trust me, if you start to slack off on lead generation, your business will suffer. It’s just a matter of when. The bottom line here is this: Successful agents never stop generating leads.
Find the Source that Works Best for You.
The secret is to find a source for lead generation that you actually enjoy (or, at least, find somewhat interesting or redeeming) and, therefore, you will find relatively easy to do everyday. Again (And, yes, I’d prefer not to be repetitive, but this is that important), make sure it’s something you can and are willing to do everyday. The truth is that—no matter what strategy you choose—lead generation makes most people uncomfortable at first. Even Gary Keller of Keller Williams Realty admits that when he started out, and finally carved out the time to do it, “Then intimidation set in,” he said. “I believed I couldn’t lead generate because I didn’t know what to do or say and was afraid of making mistakes; however,” Keller continues, “as I consistently “got after it” I found that lead generation is nothing more than a set of tasks and skills that are well documented. I caught on that, with practice and homework, these actions are easily understood and learned.”5
Invest Time in Nurturing Your Leads, It’s the Other Half of the Game.
Of course, you can’t just generate leads. If you ever hope to convert a targeted number of them into clients, you also have to nurture your leads. This means helping them to keep your name in mind by helping them with their needs and desires. The best way to do this is to provide valuable, relevant and timely information on a regular and consistent basis.
In order to do this effectively, you have to get to know these people a little and understand their needs. Are they looking to buy a house or sell a house? What is their timeline? What information do they need to make the best decision? What are their individual preferences or needs? Are they facing any particular pressures or constraints? What are their expectations of you, as their potential realtor?
You can learn the answers to all of these questions in a brief conversation, or through your website, social media, or an app. The key is to get this information and then use it in a way that is useful to them (without being intrusive, or annoying). It may sound like a lot, but it’s not really that hard to do—provided you focus on their needs first. As Zig Ziglar liked to say, “You can have everything in life you want if you just help enough other people get what they want.”6
Tailor Your Marketing, Manage Your Lists.
One common mistake that new (and many experienced) agents make is treating all of their leads the same. Many of your videos, articles, social media posts, emails, presentations, community events, etc. will apply to everyone on your list. And that’s fine. Others, however, will not. Sending an email about how to become an agent to a list of people who specifically let you know that they are looking to sell their home is unlikely to win over any fans (and may even be perceived as spam).
The solution to this dilemma is effective list management. Grouping your main list into categories and subcategories (e.g. first-time buyers focused on safe neighborhoods, or home owners looking to sell next summer, or potential buyers interested in financing options) is crucial to cultivating your leads.
When a lead is considering which agent to work with, they likely have a few different possibilities in mind. When you provide them with the most relevant, useful information, they will feel like you know and understand them the best (usually because you do) and, therefore, they will be much more likely to go with you.
Treat Every Lead Like a VIP.
Obviously, how you interact with people also matters. This includes calling leads back when they call you (I recommend returning all calls within 24 to 48 hours). You wouldn’t believe some of the stories I’ve heard about agents not calling people back. In the words of one realtor, “If you are willing to provide good service and call people back, you could be converting tons of leads that other agents never bothered to follow up with.” Michael Pannell, owner of Nu Home Source Realty in the Dallas/Fort Worth area writes, “My mom works for me, she’s 70 years old, and she does around 20 deals a year every year because she has a follow-up plan. She’s never been in sales in her life ever—never sold anything—and she does 20 deals every year, year in and out, she’s been about three years doing this, and never done any kind of sales. But she has a strong follow-up plan.”
At a recent talk at Inman Connect New York, marketing maven Seth Godin said that most people pick the agent who calls them back first. “That is the single greatest success factor in getting listings,” Godin said, “call people back first.”7
As helpful and important as a well managed list may be, it can never take the place of personal contact. In other words, effectively nurturing your leads means picking up the phone or, if possible (and reasonable), meeting in person. Therefore, when you’re working your daily lead generation and cultivation system, be sure to include time for follow up calls, or even a few personal visits, interspersed with your other methods of contact (emails, autoresponders/drip campaigns, social media, direct mail, etc.). Don’t hesitate to send a birthday or a holiday card either. Think of it as you would with building any valuable relationship. And be creative. Be remarkable! (For more information on this topic, I highly recommend Seth Godin’s book, Purple Cow).
Start with the Most Popular, Proven Strategies.
Before we dive into some of the most popular or classic strategies for generating leads, there are a few important distinctions to keep in mind. The first thing to understand is that approximately 50 to 75% (it varies depending on the source) of your leads will come from your network. Thus, engaging in activities to actively build your network should be considered a form of indirect lead generation. And though other strategies are much more direct (and may, therefore, bear fruit faster), because such a potentially large fraction of your leads will come from your network, I believe this is an important strategy to consider including in your lead generation arsenal.
A second important distinction to consider is the difference between “marketing” and “prospecting.” As discussed earlier, successful real estate marketing is an indispensable part of becoming a real estate millionaire. But it is not the only form of lead generation. Yes, there is a fair amount of overlap, and there are some gray areas along the marketing-prospecting continuum (See Illustration: “Lead Generation: Marketing vs. Direct Prospecting”).
But there’s a reason I think this distinction is important, particularly for new agents: Most of the marketing strategies recommended for new agents (who are usually on a budget) will take more time (compared with direct prospecting) to generate traffic and potential leads. On the flip side, many (but not all) of the marketing strategies I recommend for new real estate agents will continue to generate traffic and potential leads long after the work has been done. In fact, effective marketing can continue to generate traffic and leads for months if not years afterwards. Whereas with direct prospecting, on the other hand, soon after you stop doing the work the flow of new leads will dry up.
Ultimately, I think these facts help make a solid case for actively engaging in both forms of lead generation: marketing and direct prospecting. And I’m not the only one. In fact, Gary Keller of Keller Williams Realty writes, “The two categories all lead generation methods fall into are prospecting and marketing…Although you’ll consistently hear people say they do one or the other, research says you should do both. Doing both helps you avoid any risks of having “all your eggs in one basket” and this diversification actually increases your odds of long-term success.”8
With that said, the following are the most popular, proven strategies for prospecting. These are the classics. As discussed above, with the top strategies for real estate marketing, you also want to keep this within reason. Do not try to do it all. I recommend you choose just two maybe three main strategies, and then occasionally try one of the others. For example, you could really get after it and use your lead generation time to hustle up as many open houses for other agents as possible, and use the other half of your lead generation time to do your cold calling or door knocking. And, then, on occasion you could attend networking or community events.
Alternatively, if you’re more of an extrovert, you could spend a significant part of your lead generation time networking—attending networking events, meeting with colleagues, working out of your broker’s office, making contacts in the community, et cetera—and then spend the remainder of your time door-knocking or hosting open houses.
Whatever you decide to do, make sure you really give it a solid try for a minimum of 90 days before you abandon ship and adopt another strategy. Remember: You may get a sense of whether a strategy is going to work within a few months, but the goal is not to test everything out. The end goal is to learn to master lead generation. As Gary Keller writes in Shift, “Anyone who doesn’t move to mastering lead generation usually gets shifted right out of real estate.”9
Also, make sure you’re exercising some self-awareness here. Most all of this stuff can be slightly uncomfortable at times, so you want to make sure you’re not allowing yourself to get distracted, or keeping yourself “busy” at the expense of doing the tough work that will ultimately bring results. To put it differently, you don’t want to choose the least uncomfortable strategy, you want to choose the strategy that works most effectively, given your strengths, and the realities of the real estate market in your area.
Real Estate Lead Generation Tactic #1: Cold Calling.
Even with all of the advances in technology, cold calling can still be highly effective. To succeed, you have to stick with the basics: Focus first on adding value, and be persistent! Most of your competitors are sitting around waiting for clients to come to them. Just keep picking up the phone, it gets easier and easier the more you do it. Most of the public still silently admires the good old-fashioned, hard working Jane and John Doe.
- Call Scripts. Scripts for making cold calls can be very helpful, especially if you’re just starting out. And it’s important to have a solid, tested script. But don’t waste your time over-analyzing it. In fact, you should focus on making it your own to some degree, and that can only happen by getting out there and giving it a go. In the words of Keller Williams real estate agent Jeff Glover, “After you have studied a script, just pick up the phone. You are going to make mistakes. You are going to stumble through phone calls. Keep picking up the phone. As Gary Keller teaches us, ‘When you fail, fail forward.’”10 And don’t let your fear of rejection, busy or angry homeowners, or embarrassing mistakes slow you down. “Learn from your mistake and dial another number. Every day you get better than the day before. Little by little, month by month, you become good at talking to strangers,” says Glover.11 “It’s a great idea to role-play with other agents, but there’s no better practice than live practice. It is a lot harder on the phone with a real potential client than it is with an agent. Pick up the phone. Make the call.”12
- The Prospects. Your efforts around cold calling must be targeted. There are basically only four groups of people that you are calling: (1.) Expireds—These are people who had their homes listed with a realtor and the listing expired. In other words, their agent did not successfully sell their home. There’s a good chance they will be ready to list with someone new. The key, however, is to call as soon after it expires as possible before someone else beats you to it. Also, there’s a good chance they will need a firm, but supportive reality check on the price of their home. Most homes don’t sell because they are priced higher than what the market will bear. (2.) FSBOs (For Sale By Owner)—the focus with FSBOs should be on providing value in the form of useful advice. The statistics on FSBOs make it overwhelming clear that this is not the best option for sellers hoping to get the most for their home in the least time. Unfortunately, it’s not easy helping them to see this, especially if you don’t already have a trusting relationship. Therefore, the thing to do is to focus on building a trusting relationship by adding value (without any strings attached or any expectation of return). Many FSBOs eventually do see the light and elect to list with an agent (including, to my great surprise, the Founder and CEO of For Sale By Owner himself). If you’ve spent the time cultivating a relationship by building trust, you will likely be at the top of their list when they’re ready to make the switch. Keep in mind that FSBOs can be a bit of a challenge. But don’t give up on them! FSBOs are the ones that need your help the most (e.g. see FSBO: Should You Sell Your Home Through an Agent? and FSBOs: This is the Reason You’re Having Trouble Selling Your Home). Once you’ve had a chance to visit their home to check it out (to see if it’s something you’re willing to show to your potential buyers), see if they’re okay with you following up with them after a certain time. And then keep your word and do just that. Also, follow up with them on Mondays, right after they’ve had another weekend to try and sell their homes themselves. We will return to the other two groups (pre-foreclosures and recently sold homes) in an upcoming post.
- Follow Up. Find ways to follow up with people after the call (postcards, emails, letters, or even a video just for them—it’s easier than you think and will help you stand out). And don’t just give up if you never get an answer over the phone. That’s what your competitors are doing. Instead, follow up with a postcard, or a personal visit. If you send a letter and they are not living at that address, it will get forwarded, and you’ll have another chance to make a connection. Also, be sure to include a few useful tips relevant to their interests (Remember: The goal is to add value!) and a link to your website. Let them know you have a detailed plan to help them sell their home, and entice them to check it out with an offer for more free, relevant, useful information. Let them know you have a few key ideas for them specifically (based on their home or specific needs) if they’re willing to give you a call (and keep those ideas in your spreadsheet so you’re prepared when they call).
Real Estate Lead Generation Tactic #2: Door Knocking.
Door knocking is very similar to cold-calling with two key exceptions: (1.) First, it takes a lot more time to walk or drive to people’s homes and (2.) Second, you will likely have much greater success with people you can meet face-to-face. One simple but effective door-to-door strategy could be focused primarily on meeting the neighbors in the area. You can also offer an appraisal of their home. And remember this: Scripts are an equally important part of a solid door-knocking plan.
Real Estate Lead Generation Tactic #3: Open Houses.
Open Houses are probably my favorite lead generation strategy. Not only do I enjoy doing them, but I find this is an excellent strategy for several reasons: (a.) They bring in lots of potential leads. (b.) You can make a lot of new connections, and establish yourself as the area expert with these people, building your authority (a key factor of influence). (c.) They give you an opportunity to temporarily canvass the immediate neighborhood with your name and website. (d.) If you’re doing the open house for a colleague (the listing agent who is selling the house), then it provides you with an opportunity to further develop the relationship with your colleague, and earn their trust and goodwill—which is key to your long-term success.
For the typical U.S. real estate agent, approximately 15% of their leads come from open houses. Of course, if you make this one of your key lead generation strategies, you can easily double or perhaps even triple this number.
There are a number of useful tips to consider with open houses, which I will write about in an upcoming post (If you would like to be notified when new articles and ebooks are published, you can join our email list.). For now, let me focus on a few of the most important things to keep in mind:
- Focus On Presentation. Make sure the house is super clean, and properly staged (See the “Bonus Tip” in this article for more information: Top Ten Tips for Selling Your Home). Also, turn on the lights! And burn a pleasant candle (preferably something neutral or subtle. Be careful though, some people are quite finicky about scented products—especially chemical based products). You might also bake some fresh cookies to get that holiday home smell wafting throughout the house.
- Get the Word Out. Knock on all the doors in the neighborhood the morning of the open house and invite them to stop by and check it out (even if they’re not looking to buy). Then, break out the signs. And put them throughout the neighborhood, not just at the end of the block. Also, have the address on every sign, the time of the open house (don’t forget this), and make certain you have arrows pointing the right way. If you really want to draw some attention, get a drone to fly a banner over the house for the first hour—it’s a great way to get the word out about the open house, as well as your savvy marketing skills as a realtor.
- Feed Your Guests. “Feed them and they will come!” Nothing works better than a few delicious snacks to attract a crowd and encourage people to relax and spend some time connecting. Even something as simple as coffee and cookies can go a long way to getting people to drop their guard and open up.
- Provide Helpful Handouts. Remember: The best way to sell is to educate. The more useful, relevant information you provide, the more likely they are to look to you for guidance when they’re ready to buy or sell a home.
- Ask for Contact Information. After you’ve had several minutes to connect with people and build some rapport, ask them if they would like to stay in touch by joining your email list. If you feel you have a bit more of a connection than usual, then invite them to exchange phone numbers with you. You may be encouraged to learn how often people are willing to give their phone number to a trusted expert in their neighborhood.
Real Estate Lead Generation Tactic #4: Community Events.
This is another great way to generate leads for your real estate business. And when it comes to community events, the sky is the limit. You could organize events to be more about social or professional networking, or you could offer free information sessions, for example, to first time buyers, or people interested in maximizing the value of their home. You could also work with local experts to host a free interior decorating or staging seminar, or some other topic relevant to real estate that would likely draw a respectable audience. Client parties could also fit into this category. Don’t be limited by the ideas here. Do some brainstorming with your mastermind group, or other colleagues or friends, and try to think of some creative ideas that people would enjoy, and that would be a natural fit for you and your real estate business niche.
Real Estate Lead Generation Tactic #5: Networking, Referrals, and Online Reviews.
Networking and referrals are a major part of the business of real estate. In fact, if you are among the majority of real estate agents in the U.S. today, then your personal and professional network will prove to be your greatest source of potential leads. One of the major advantages of networking as a source of leads is the relatively low cost involved. But there is an even more basic reason why networking is such a powerful lead generation source: People trust people they know (and trust, of course, is key to business growth). Research repeatedly reveals that—no matter how weak the connections are—people are far more likely to do business with people connected to their network than they are with people they don’t know (even if all other things are not entirely equal).
What’s more, this natural human tendency is aptly rewarded and, thus, makes perfect sense. This, after all, is a reciprocal relationship. And, therefore, the people who do business for people in their network (e.g. the real estate agent who follows up on the lead from his friend) tends to do a much better job. Not only is there greater accountability, but the realtor’s reputation with his own tribe is at stake.
This is excellent news for a couple of different reasons. First, it’s surprisingly easy to expand your network. Even if you are a little shy or your social skills are a bit rusty, developing simple meet-and-greet skills takes no time at all. And the more people you meet the easier it is to meet more new people.
The following are seven (7) key ways to maximize your network as a source of real estate leads:
- Announce Your “Grand Opening,” Spread the Word. The first thing you should do as a new agent is get the word out to everyone you know. Let them know that you have started a new, exciting career in real estate. Show some enthusiasm for your newest endeavor, and let them know how they can help. You may be surprised where you get your next lead. Remember these words from the great business titan W. Clement Stone, “Tell everyone what you want to do and someone will want to help you do it.” This is equally applicable to your real estate business. This leads to another key tip.
- Share Your Business Card with 3 People Everyday. One of the most vital habits to develop around building your network is handing out your business card. Make it a daily practice to treat everyone you meet as a potential client, and you will be surprised how many of them turn out to be just that. But don’t just give out your business card to unsuspecting people. Instead, strike up a conversation with people. Ask lots of thoughtful questions. When they say something you sincerely find interesting or intriguing, demonstrate your interest in what they have to say. Then ask for their business card (and be sure to read the name), and then share your card with them. Having their business card is usually better than them having yours. Why? Because you can follow up the exchange with a brief email later, letting them know that you’re glad you met. Ideally, you can also share a useful article or link relevant to the conversation you had together earlier in the day.
- Be Visible in Your Community. Next, get out there and get involved in your neighborhood and community. Being active and visible is key to your success in real estate. In the words of Realtor John Souerbry, “The most successful agents I’ve observed over the past 10 years are the agents who get out in the community and are good with people. Their lead generation system includes joining clubs, sponsoring community events, and answering their phone when it rings. The are visible in the community…”
- Nurture Your Network, Give More than You Get. As with your leads, you have to actively nurture your network—by consistently adding value—in order to truly benefit from it. Find a “personal touch” that works for you, and use it to stay connected with possible leads and potential clients. Remember: People work with people they know and trust.
- Leverage Feedback from Satisfied Clients. You have to have clients, of course, before there is anything to leverage. But they will come if you stick with it, and when they do, their experience with you will be key to your ongoing, exponential success. In the words of real estate expert Patrick Wiltse, “All of the tactics detailed above related in some way to earning the trust of potential clients. However, none of them are more effective at building trust than leveraging feedback from happy clients. Direct referrals are the best way to grow your client base with minimal cost of acquisition, and great online testimonials and reviews are the next best thing.”13
- Ask, Ask, Ask for Referrals and Online Reviews. Your network wants you to succeed! Some people have a hard time asking for help because it makes them feel selfish or weak. This is absolute nonsense! Those who think that anyone succeeds without the help of others, doesn’t know much about success. We all need the help of other people—allof us. Rather than trying to hide from that fact or lessen its truth in your life, far better to embrace it and realize that relationships are reciprocal. The more successful you are, the more you will be able to help others in return. Not only that, but keep in mind that the relationships themselves have inherent value and, thus, even when you help someone—or they help you—with no expectation or ability to return the favor, you are both still creating value for each other and your close relationships. The next time you think of asking for help, recognize that what you are really asking for is a chance to deepen an existing relationship. One of the easiest ways that people can help you is by providing honest, candid reviews. If you have yet to sell many (or any?) homes, ask people to write reviews based on their experience of you in other, relevant areas (e.g. as a businessperson, colleague, or member of the community). Alternatively, ask for reviews or even just a few key phrases or words from other real estate agents who are familiar with you and your capabilities. People’s experience of you does not have to be directly related to buying and selling homes to be highly informative and helpful to others who are considering working with you. Also, keep in mind that the popular real estate websites (Trulia, Zillow, Realtor.com, Homes.com, etc.) are not the only place that your network can provide valuable reviews, referrals or recommendations. Yelp, Google Reviews, LinkedIn and Facebook, to name a few, are also excellent places to begin building your brand.
- Calling or Connecting with Your Network. Staying in touch with people is key to cultivating your network, and building your real estate business. But you need a plan to do it well. Networks can get unwieldy and, therefore, it often makes sense to have a system for ensuring that people are not falling through the cracks. You can use birthdays and anniversaries to make sure you are staying in touch with the people in your network. You can also group people (similar to Google Circles) in a way that makes it easier to reach out around certain topics, types of relationships, or times of year.
Do Outstanding Work!
Nothing works better for generating leads than the referrals that flow from doing your job exceptionally well. In the words of Realtor Dan Tabit, “A job well done will generate referrals and recommendations that money can’t buy.”14 This also speaks to the importance of focusing on both the immediate needs of your business and your long term success. As Gary Keller writes in his book Shift: How Top Real Estate Agents Tackle Tough Times, “Lead generation effectiveness is the one true building block of all successful real estate careers and while its goal is always immediate business that is usually best accomplished through a dual focus on present and future business.”15 In essence, if you keep your focus on being remarkable, you will help to ensure both immediate results and long-term success.
- Keller, Gary (2004). The Millionaire Real Estate Agent: It’s Not About the Money…It’s About Being the Best You Can Be! Pg. 78.
- Keller, Gary (2009). Shift: How Top Real Estate Agents Tackle Tough Times. New York: McGraw Hill. Pg. 52.
- Ziglar, Zig (2005). See You at the Top. Gretna: Pelican Publishing Company. Pg. 45.
- Taufen, Amber (2016, January 27). “Seth Godin: Go—Make Something Happen.” Inman. http://www.inman.com/2016/01/27/seth-godin-go-make-something-happen/
- Keller, Gary (2009). Shift: How Top Real Estate Agents Tackle Tough Times. New York: McGraw Hill. Pg. 63.
- Ibid. Pg. 57.
- Glover, Jeff (2015, March 18). “Cold Calling Tips that Pay Big.” Keller Williams Realty. http://blog.kw.com/2015/03/18/cold-calling-tips-pay-big/
- Wiltse, Patrick (2015, September 3). “The Top 7 Real Estate Lead Generation Strategies Used by the Experts.” Lone Wolf Real Estate Technologies. http://blog.lwolf.com/resources/advice/the-top-7-real-estate-lead-generation-strategies-used-by-the-experts-43920/
- Tabit, Dan (2012). “Do any lead generation systems actually work?” Trulia, Agent2Agent. http://www.trulia.com/voices/Agent2Agent/Do_any_lead_generation_systems_actually_work_I_am-344148
- Keller, Gary (2009). Shift: How Top Real Estate Agents Tackle Tough Times. New York: McGraw Hill. Pg. 56.
If you have a specific question for me about becoming a realtor, I would love to hear from you.
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