Must Read If You Are Marketing By Carrier Route

We all got so granular over the past few years!  And that’s a good thing!

Rather than shotgunning our message all over God’s Green Earth (and paying a hefty toll for the privilege), we started looking at our marketplaces through a magnifying glass.  Instead of marketing by Zip Code, we started breaking down the Zips by Carrier Route.

Most Help-U-Sell offices refined their marketing targets down to 5 to 10 Carrier Routes, depending on turnover rate and budget (That usually works out to 3,000 to 8,000 households).   The problem is, since every Carrier Route has its own turnover rate, it became difficult to know what the OVERALL turnover rate was in your complete target.  Most Brokers just kinda guessed.

Does that make any sense?  You just spent all this time and energy carefully tearing your marketplace apart so that you could construct a productive target.  Instead of doing what most Brokers do (which is to guess or make the decision based on hearsay or gut), you based the whole process on FACTS.  Cold hard FACTS.  And now, you’re going to guess at the turnover rate within your target?  I think NOT!

So, here’s what you do:

tor2-1

Add up all of the households in all of your Carrier Routs, then add all of the houses that sold in the past 12 months in all of the Carrier Routes . . . . Then just divide Homes Sold (the small number) by Households (the large number).

Those of you in a Coaching Group can use this AMAZING number in the Market Analysis tab of your 12 Month Goal Setting Worksheet, here:

torate22b

I sincerely hope this keeps you guys from guessing about your business!  And maybe the whole process will intrigue some into investigating the Coaching Group opportunity.  I hope so.  We’ve got openings.

How to Generate Leads (a message for ordinary real estate brokers)

The lifeblood of our business is leads . . . but how do you get them?  

It’s harder today to generate a lead than it ever has been.  As the real estate business has grown up, the flow of easy leads into the office has dried up!  And while the Internet has lowered the cost of marketing a listing, the cost of generating a lead has gone UP.  Offices with active marketing programs easily spend $100 – $150 to generate a single lead.  When you factor in typical conversion rates – something like 8 to 1 – the cost to generate a bona fide buyer or seller can approach $1,000.  

Before delving deeper, let’s define terms.  An Inquiry is a call for information.  It may come on the phone, in an email or in response to an Internet ad.  Inquiries do not become Leads until that person surrenders his or her contact information.  So a Lead is a person we have the ability to contact.  

Most potential Leads are lost right there: in the conversion from Inquiry to Lead.  Real estate salespeople are so notoriously bad at this that at least half of all Inquiries simply evaporate without ever becoming leads.  Smart brokers demand performance in the conversion process, insist on practice and role play, and track it over time.  Smarter brokers hire specific personnel whose sole function is to respond to Inquiries and convert them to Leads.

There are several cultural factors that have caused that great river of real estate buyer and seller leads to go dry.  They include:

An explosion of readily available information.  With the Internet, Zillow, REALTOR.com and dozens of other portals, there’s very little a potential customer can’t find on his or her own.  In short:  they don’t call you anymore, because they don’t need to.

A steadily waning trust factor.  We have become obsessed with privacy and anonymity.  So often, the innocent sharing of an email address of phone number has led to endless scamming and unwanted solicitations.  People today are far less willing to give up their contact information than they were even 10 years ago.  

The genericization of the real estate industry.  A couple of decades ago, there was a perceived difference in the consumer offering of some real estate companies.  That perception is gone with the last millennium!  Today, there is not one whit of difference in the consumer offering of almost any real estate brand.  There is endless innovation in how real estate companies attract and retain agents, but for the consumer it’s basically 6% (or 5% or 7%), put you in the MLS, put you on Zillow, hold an open house and pray.  When everyone is offering the same thing, something extraordinary has to come through in an inquiry response before contact information is exchanged.

So how do you become a lead generating machine in this environment?  It’s actually pretty easy.

Step One: look at your consumer offering.  What are you offering that is utterly different from what everyone else is offering?  And, forget the industry buzz terms like ‘Excellent Customer Service,’ and ‘Professionalism.’  Those things are important, but to the consumer, they are an expectation, not a differentiator.  

Remember that one of the first things any consumer shops is price.  If your pricing model is the same as the 3,000 other Realtors in your Board . . . well, that’s hardly standing out in the crowd, now is it?  And does your pricing model make sense?  Does the person in the $250,000 house pay less to sell it than the person in the $300,000 house?  If so, why?  Spoiler alert:  answers like, ‘That’s just the way we do it,’ don’t fly.

The pricing of any consumer good or service is a value-for-value exchange.  In a value-for-value universe, your fee should have some relation to the cost of the goods or services you are providing.  So, if the person in the $250,000 house pays, say, $15,000 to sell but the person in the $300,000 house pays $18,000, where are you spending the extra $3,000 in the home marketing process?  You’re not?  Well, then, both of those homeowners should be paying the same thing, don’t you think?

Assuming you do step one correctly – meaning you devise a superior pricing model for your company and a dynamite consumer offer – you move on to:

Step Two:  which is to market the heck out of it.

Bear in mind that it is your company that makes the consumer offer; it’s not the agents.  They may make the offer on the company’s behalf, but it is the company’s offer.  

Over the past 40 years, residential real estate companies have shifted the cost of marketing (which is how we communicate the consumer offer) in large measure to agents who demanded increasingly lofty commission splits.  The logic was solid:  I can’t afford to pay you 80% unless you start paying for your own marketing.  But we’ve learned that, generally speaking, agents won’t invest in marketing regardless of split.  The end result of shifting marketing to agents is agents running around willy-nilly, making this promise here and that pledge there, with no coordination from the broker and no clear or consistent offer being made to consumers.

So, you have to take control of your marketing, which means you’re going to have to budget a significant portion of your gross for it.  Then you go into your target market strategically and consistently with your marketing message . . . and soon, like the swallows returning to Capistrano, the inquiries start to flow in.  

By this time, the next step should have already happened.  It will happen while you are doing step two.  

Step Three:  Take control.  As you take control of your consumer offer and of your marketing, you will take control of your company.  As lead generation becomes your responsibility, as you begin to hold your staff accountable for the disposition of those leads, as your unique consumer offering is constantly and consistently conveyed, your company will shift from being a place where agents work to a thriving business machine with growing market share and value.

Sound like a lot of work?  A lot of risk?  It is.  But if you want to control your business (rather than be controlled by it), it has to be done.  

Thankfully, there is a shortcut.  

For 40 years, Help-U-Sell Real Estate has been perfecting the kind of business model described above.  Our consumer offer – Sell Fast for a Low Set Fee and Save Thousands – is unique and very attractive to consumers.  Our marketing system is a system.  Like the consumer offer, it is unique in the industry and produces stellar results. Nobody markets like we do and nobody generates a steady flow of leads into the office like we do.  

Couple this with a robust technology platform that we built and own and free expert coaching and support; and Help-U-Sell Real Estate could be your path to local market domination.  

If you’d like to know more or simply have questions, feel free to contact us.  Much can be learned at our website, helpusellfranchise.com or at one of our regularly held informational seminars, but nothing is better than picking up the phone and having a conversation.

Caution:  One of the biggest snags brokers encounter when trying to understand how Help-U-Sell Real Estate works happens when they try to imagine the pricing model fitting into their existing operation.  It doesn’t work.  If you did that, you’d fail.  We are not a stripped down version of what any other real estate company does.  We are a completely new and different approach to how to run a real estate company, one that allows us to charge less and make more.  

Just as almost every seller who is aware of us feels they must find out what we do before choosing a listing company, you too should find out what’s different and special about Help-U-Sell Real Estate before you map out another year of your future. Get in touch today.

Should You Be Marketing for Millennials?

If you listen to the big real estate pundits, in fact, if you listen to our own weekly Power Hour, that title looks like a stupid question.  Of course you should be marketing to Millennials!  They are the next great home buying wave!  They represent something like 20% of the American population!  Of course you should be marketing to them!

Well . . . . maybe.

There are some realities about Millennial home buyers – born between roughly 1985 and 2000 – that are often ignored, realities that could inform your decision about pursuing them.  Here are two:

  • While high tech jobs and massive starting salaries do come to this group, the vast majority exit college and enter jobs paying near subsistence wages.  There are a whole lotta Masters Degrees working at Starbucks and the Verizon Store.  But that’s not all;  in most industries, entry level salaries have not kept pace with the cost of living.  In brief, Millennials often don’t have the income they would need to qualify for the entry level home.
  • Millennials and debt seem to go together.  For the college grads, it’s student loans – that $20,000 to $40,000 noose that hampers the creditworthiness of these home buyers.  For others it is the over use of credit cards to finance a lifestyle that is bigger than their entry level salaries.  Between lower income and higher debt, many Millennials present significant qualification challenges.

But so what?  We thrive on challenges!  Nobody is better at solving these kinds of problems than we are, right?  Yes, right, and with dozens of new financing instruments and special programs to help first time buyers, we have the tools in our arsenal.  But there is a third reality that just flattens home buying possibility for  many.  It is rapidly rising home values.

Coupled with the realities of lower salaries and higher debt, the affordability crisis is pushing home ownership out of the reach of many Millennial buyers . . . in fact of many buyers of any generation.  In California today there are many markets where fewer than 28% of the population makes an income sufficient to qualify for a mortgage on the median priced home.  It is a trend that shows no signs of reversing and that is spreading across the country.

My advice to you is to think, focus and aim before you fire your marketing at Millennial home buyers.  Are you in a marketplace where young home buyers can afford to buy?  Do you have inventory – condos or single family homes – that price somewhere in the $150,000 – $250,000 range?  Are you in a location where there are good jobs for college educated young people?

When I consider those questions, I immediately think of Greensboro, North Carolina, home of Jack Bailey and Steve Vincent, two Help-U-Sell brokers doing a great job of putting young people into their first homes.  It is a marketplace where housing is relatively inexpensive: the median sale price is still below $200,000.  It is also a market where employers are expanding, so there are jobs.  This may be a great place to seek out Millennials.

But then I consider David Bartels in Westlake Village, CA.  There, the median sale price is $775,000.  Yes there are some lower priced areas close by, and there are even lower priced condos, but prices still put those properties out of the reach of most Millennials.  You’d think Ventura County with its proximity to the employment mecca of Los Angeles would be a perfect Millennial market . . . but affordability creates huge headaches for this group here (despite what I wrote about Millennials in your blog, David).

Look at your market place and make a logical decision about whether or not to target Millennials.  Consider home prices, employment opportunities and typical starting salaries.  You may discover that it’s not worth pursuing this group at all . . . despite what the pundits may say!

Holistic Marketing

Ahhhh . . .  .remember the good old days?  You know:  a dozen years ago or so, when you would buy an ad of some kind and then measure the leads it would create, even analyze the quality of the leads created, and then pick and choose the marketing vehicles that seemed to work the best going forward?  That process of trial-measurement-choose to arrive at a marketing plan was central to the mindset of a Help-U-Sell Broker.  Unfortunately:

It Don’t Work That Way No More!

I talk with brokers every day, mostly about marketing.  Many are still looking for that magical marketing silver bullet, that one advertising vehicle where they can invest their money and receive the highest return.  Truth is:  there are no magical lead-generating machines – not today.  Today, marketing is not about spending a little money here and there and waiting for the phone to ring; it is about laying down a prolific blanket of media that reminds the consumer you are there and can save them money.

Flashback – 2005:  Sitting in a room full of Help-U-Sell Brokers hearing about a Help-U-Sell only homes magazine one group had created.  They were distributed in bright red boxes all over town and produced lead after lead after lead.

We used to hear that kind of story all the time . . . but we don’t anymore.  The consumer is fundamentally different today and there are a dozen reasons why, the most powerful being the maturation of the Internet. With all of the information readily available online, consumers very rarely respond to a specific ad about a specific property.  Today, they are slowly drawn to work with you.

Slowly drawn.  What does that mean?

I know brokers whose Google Ad Words campaigns work.  I know brokers who get leads every time they send out an EDDM.  I know brokers whose CI postcards produce listings and sales.  Often it is the same brokers.   These are the ones who understand that they must mount a continuous, multi-pronged assault on their target markets.  They do Ad Words, Facebook, Zillow, EDDMs, Just Listed/Sold, FSBO, CIs and even toss in a little print advertising from time to time.  For this group, marketing is not the placing of an ad here or there, it is a holistic combination of dozens of things that keep their name and program firmly rooted in the minds of consumers in their target markets.

Today it is much more difficult to determine the source of the lead you get.  They didn’t call you because of one specific marketing piece, they called you because they have casually noticed you in the market over and over and over again.  ‘I found you on the Internet’ doesn’t just mean they got lucky with a Google search.  It probably means they saw your EDDM a couple of times, noticed when your sign went up in a neighbors yard, received your door hanger, passed your office with its prominent sign 6 times last week . . . and on and on.

Richard Cricchio of Help-U-Sell Honolulu Properties is a good example of how to market today.  Not coincidentally, he has been the number one Help-U-Sell office in the world for a several years.  Richard started with Help-U-Sell core marketing, one piece at a time.  Then as the program began to work, instead of wondering where he could cut, he looked around for what he could add.  Every year he adds a thing or two to his marketing program:  radio, homes magazines, new postcard program, blog and so on.  He almost never cuts anything out because he realizes that all of it works to keep his company firmly in the minds of home sellers and buyers on Oahu.

Now, I know.  If you are not drowning in discretionary income, you’re probably thinking, ‘Ok, Holistic . . . that means Expensive, right?’ Yes, it does.  But it also means one step at a time.  Your first order of business is to crank up core marketing.  Get that working and keep it working for  . . . well, forever.  If you need a refresher about what Help-U-Sell core marketing is, you can find it here.  Then start looking for what to add.  Talk to me as you make those decisions; I may be able to help.