Here’s a rough draft of a video we’re working on for part of the new Help-U-Sell University program. The goal of the piece is to give new members an understanding of the power of Set Fee pricing. I think it has broader appeal, though. What do you think?
Category: Help-U-Sell
Help-U-Sell Marketing
I’ve been stewing over Help-U-Sell Marketing and how to present it powerfully to a potential Seller.
By nature it is already powerful compared to what goes on in ordinary offices, where marketing/advertising has largely become the responsibility of individual agents. It didn’t use to be that way. A long time ago, real estate companies created, orchestrated and paid for marketing to benefit their agents. But back then, agents were usually paid 50% – 60% of the earned commission. Today, most ordinary brokers start newbies out at more than that and 75%-80% splits are not uncommon. When ordinary companies gave in to the pressure to pay more to their agents, they had to cut somewhere to make up the difference, and marketing budgets took the biggest hit.
So at brand X down the street, you have dozens of little agents whizzing around willy-nilly ‘advertising’ on Craig’s List here and a homes magazine there, and dropping an open house ad in the local rag when the seller gets antsy. There’s no coordination, no maximization of the power of INVENTORY, no grand design to marketing, and the results are negligible.
At Help-U-Sell, marketing is the purview of the Broker. It is an office responsibility. Our brokers do deep research into the local marketplace so that they can make informed decisions about where, when and how to market. They design, implement, monitor and constantly refine a coordinated marketing plan that generates a strong flow of buyer leads into the office. New listings are simply plugged in to the marketing program and marketing featuring any of the office listings will benefit all of the office listings. It is the strong flow of leads that causes our listings to sell.
We used to talk with potential sellers about the components of the marketing plan: ETMs, Brags, Weekly Lists, Bootlegs et.al. and while I’m sure those things are important today, I think sellers want to hear more and more about the Internet. Since everyone knows that buyers are all over the Internet looking for houses, sellers want to know what you’re doing to get their property noticed in that arena.
I think saying you syndicate to 28 websites and sharing a graphic of what those websites are is helpful. But it’s not a differentiator. Most main line real estate companies are syndicating in similar fashion. (By the way: this does not mean you shouldn’t talk about it and show the graphic. You should. It’s still impressive.) I think what’s more important is to show how you’ve maximized your web presence to be most attractive to the Internet buyer.
Here: have some fun with this: Open Google and type in ‘ Sell Real Estate’. The top few responses are paid ads. But after that, Help-U-Sell is often the first main-line real estate company that shows up. Every time I’ve ever done it we are in the middle or near the top of the first page. Of course there’s a reason: our name is Help-U-Sell real estate!
But if you’ve done your homework, if you localized and optimized your website, if you’ve bought good domain names to point to your website, if you’ve created new pages of localized content for your website and so on, there should be search strings that have your office appearing near the top of the first page. Why not spend a little time trying to discover what they are? Then start sharing those search string results with sellers when you sit down for a listing consultation.
Want to see someone doing a very good job of this? Go to Google and search for ‘Santa Rosa Homes.’ See who the first several results are. Now try ‘Santa Rosa Real Estate.’ Maurine Grisso has created several websites, each targeted at a different kind of consumer in her marketplace, each optimized and localized; and she’s further boosted their effectiveness with a little pay-per-click. She goes onto to the Internet and casts a net made up of all the places a home buyer might find her, and comes back with leads. This is great stuff. And it’s the kind of thing sellers want to see today.
The Internet Revolution
It’s going on right now, today, in Egypt.
Egypt is right at the top among Arab Nations in Internet use. Facebook has huge penetration there compared to neighboring Arab States. Twitter, too. The Internet and Social Networking are driving the uprising that’s going on right there, right now.
I realize that the revolt is being led by the Muslim Brotherhood, a group that believes Islam is more than a religion and who may turn Egypt into an Islamic State if they prevail. Notwithstanding the difficulties we’ve had with Islamic States, the Egyptian version of this group seems more moderate. Regardless of their ideology, it’s clear that the Internet has played a key role in this little bit of history.
It’s no wonder the Egyptian government shut down virtually all Internet access last night. It’s their last ghasp attempt to control the situation.
Reminds me of the old days of Radio Free Europe: we were trying to create a revolution with information. I’m not sure how successful that was, but clearly, when people have access to information on a global scale, when they can see what they have and what they might become, they grow very impatient with their own oppression.
I’m not surprised at China’s attempt to filter the Internet and I’m delighted that Google made the decision to pull out of that market rather than buckle to their demands. I mean: it’s kinda hard to keep people under your thumb when they can see alternatives at the click of a mouse. Can you imagine what will happen when the citizens of China, Iran, North Korea, and any number of other repressive nations gain free access to the information we all take for granted?
To quote Shirley Bassey, it could ‘all be just a little bit of history repeating . . . ‘ Like the fall of the Berlin Wall.
(ok, get ready: here comes the tie-in)
It’s not unlike the struggle of home buyers and sellers over the past 30 years. They were at the mercy of Realtors who held information hostage – information about houses for sale, prices, trends. The only way consumers got the information they needed to make intelligent choices was through a Realtor.
Though the Realtor community fought tooth and nail to keep all that delicious information under lock and key, the courts and the consumers won out in the end. Today consumers can get almost all of the information real estate people once hoarded and held from them. Suddenly, the value of the Realtor had to shift. Value could no longer simply be access to information. Now the Agent or Broker had to actually bring some skill to the table.
To all this, we at Help-U-Sell say Bravo! Information without obligation has always been one of our core values. We’ve always believed in giving the consumer all the information they might need to make intelligent decisions. Our value is in marketing, advising, coordinating, selling, negotiating.
So, Viva Internet! Viva Egypt! Viva free access to information! and Viva Help-U-Sell!
What They Think of Us and Why They Miss The Point
Matt Kellam sent me a link to a post on BrokerAgentSocial.com from a traditional broker (a CRB) about the disappearance of ‘Discount’ Brokers. As I read the thing it was clear he was mostly talking about us.
I was struck by how off-target the piece was as well as most of the comments to it. If you’re curious, this would be a good time to jump off and read it — but come back when you’re through. Here’s the link:
Whatever Happened to Discount Brokers?
First off, they call us ‘Discounters.’ That’s not new. But it’s just as false today as it was 5 and 10 years ago. Calling us ‘Discounters’ assumes that we take their ‘Full Service’ model, strip out the more expensive aspects of it and offer the stripped down model at a lower price. The truth is: we strip nothing out. We do the same things they do (and really, this is no bull: we do more), but we price our services differently so the seller saves on the deal.
Ordinary brokers who know nothing but what they’ve always done take a look at our pricing and try to imagine what their operation would be like if they priced their services that way. They imagine it would be a disaster . . . and they would be right. If you put our pricing on their business model, it would fail. It has failed. It will always fail. And you don’t have to be Warren Buffett to figure it out: If you’re not making any money doing things the way you’re doing them, you’re certainly not going to make more by cutting your revenue.
But, they see us continuing to survive, even thrive and there is a disconnect. (‘How can those guys afford to stay in business?? There must be some secret!’ ) So they speculate on what that secret might be, and that’s where the spin doctoring in the BrokerAgentSocial.com post comes from. It’s stuff like:
- We rely on the Internet to make our model work and rely less on brick and mortar offices.
That’s not entirely false. We do exploit the power of the Internet as much as possible to generate leads into our offices. We’d be foolish not to, wouldn’t we? And, we’ve always been able to get by fine with smaller physical offices because our model allows a small number of people to do large numbers of transactions. Don Taylor decided 35 years ago that he was in the business of selling real estate, not in the business of providing a palace for agent-princes to use for coffee time. We have never needed 200 agents to generate a profit. We do it with 5 or 6 people; so the 10,000 square foot, Taj Majal office is unnecessary.
- We use loss-leader pricing on listings and use them to snare buyers to whom we sell full commission MLS listings.
Our seller offering is not a loss leader. We set our fees based on what it will take to market a property and make a reasonable profit. I know it was misguided, but 5 and 6 years ago, many Help-U-Sell Brokers made great piles of money just working listings with set fee pricing. They didn’t even think about the buyer side. Today we know very well the folly in ignoring the buyer and we aim for a 50/50 mix of buyer sides to seller sides. What’s different is that the profitable low set fee offer to the seller makes inventory building easier; and a large inventory generates a strong flow of buyer inquiries into the office. We teach our brokers to create buyer agent compensation on Help-U-Sell office listings that is equal to or greater than what the agent would be paid on an MLS listing so there is always an incentive for our agents to sell our listings first.
- We use our pricing to get us face to face with a seller and then tack on fee after fee with our menu-of-services.
I guess they think we rent the for sale sign to the seller for $50 a month and flyers are $.25 apiece and helpusell.com costs an additional $2,000. Really: the only thing we ‘tack on’ is the other agent. We make that outside agent an option. And several years back, may sellers passed that option by because they believed — rightly so — that we could get the job done without it thus saving them a lot of money. It still works today with a properly priced equity seller. And, even when they take the option of offering the property for sale through MLS (and then being prepared to pay the outside agent and broker), they will only pay a fee based on how the property actually sells. So the seller who takes the option at listing who then holds his own open house and thus finds his own buyer, will only pay the Help-U-Sell low set fee. It’s like: the breakfast buffet is $10.95, but if you just have fruit, cereal and yogurt and find you don’t need the eggs and bacon, it’s just $4.95. Makes sense, doesn’t it?*
When they call us ‘Discounters’ they miss the point. It’s not a discount. It’s a completely different way to price our services to sellers. By itself and plugged into the old, tired, agent-oriented business model that is the norm today, it is a disaster. But that’s not what we do. We back up the pricing model with a completely different operating system that makes it work beautifully.
When Charles Schwab revolutionized the securities business, he was chided as a discounter. The old boys couldn’t imagine how they could operate (and pay their brokers) on $15 a trades. Today the old boys are all pretty much gone, and compared to Schwab, ETrade looks like a discounter!
I keep wondering how long it takes a dinosaur to turn into an oil deposit.
Help-U-Sell for Brokers
Traditional real estate Brokers don’t get us. They know about our fee structure and wonder, ‘How can they charge so much less and stay in business? I’m charging much more and can barely make a profit!’
Help-U-Sell Brokers have discovered the secret to charging less and making more. While the Low Set Fee is at our heart, what makes Help-U-Sell work is bigger than that: it’s a completely different business model.
First, we put the Broker in firm control: the business is the Broker’s and the Broker is the business. The Broker develops and orchestrates the marketing plan, takes the listings (or has an assistant do this for him), captures and controls the leads and hires assistants and buyers’ agents to help when the flow of business is great enough to warrant. Because the burden of the business is not put on the shoulders of the agents, they work for a reasonable split. Generally they don’t prospect for listings, call FSBOs or Expireds, race to meet advertising deadlines, work on price reductions or do anything associated with the listing side of the business. Their job is focused and manageable: take the buyer leads the office inventory and marketing creates, and convert them to sales. Period.
Because the Help-U-Sell office is organized around systems – a marketing system, a leads intake system, a client management system, the need for the ‘handholding’ of a traditional listing agent is greatly diminished and seller clients are managed by the Broker and his or her assistants. The Low Set Fee offer is so appealing that taking listings is easy, so Help-U-Sell offices tend to have more than their share (and therefore tend to generate more buyer leads).
But, what about those listings? How does a Help-U-Sell Broker charge less and make more. Here’s an illustration:*
*Commissions, Set Fees and Agent Commission Splits are always negotiable. The above is an example only.
In a nutshell: Help-U-Sell Brokers go into the marketplace with a great Seller offering: Sell your home for a Low Set Fee and save thousands. This strikes a chord with Sellers and they call for information. That’s when our systematic approach to the business takes over and most sellers who contact us eventually list with us. As the Low Set Fee offer generates seller inquiries the listings they create generate leads: more sellers who want to sell and buyers who want to buy.
Unlike traditional offices where whoever’s ‘up’ gets the call (and usually loses the lead), we take great care in how we handle buyer inquiries. The Help-U-Sell office’s job is to capture that inquiry, convert it into a solid lead and pass it off to a buyers’ agent who uses a systematic approach to turn the lead into a client and a sale. Because we take great care with the initial interaction, our Brokers are in a much better position to follow up with buyers’ agents, offer assistance and expect results.
The bottom line is . . . The Bottom Line. When a bold new approach to the real estate business meets a dedicated, entrepreneurial real estate Broker, profitability is almost certain. Best of all, saving people money while makingmoney is a whole lot of fun! Join the quiet revolution!
Download a PDF copy of Help-U-Sell for Brokers