Category: Marketing

Help-U-Sell Core Marketing

Wow.  We have come a long way!  I remember a dozen years ago working with brokers to create a marketing plan that would be effective in their local markets.  It was a complex process that involved trying and evaluating a multitude of advertising vehicles available to create a short list of tools that would work together to make a marketing system.  Each local market was a little different and so the system was a little different from office to office.

Today, we have finally reached the point where marketing is almost a prescription.  The system is easy and consistent, and it works in almost every market.

Core Marketing – those things every broker needs to have working all of the time – is really five things:

1.  EDDMs to the carefully defined target market.  At Summit last year, we refined the target market down to a collection of very active carrier routes.  Instead of shotgunning 10,000 households with an EDDM, we targeted a smaller more active group, maybe 1500 – 4,000 households.  Whether you go out with EDDMs once a month or every six weeks is driven mostly by budget.

2.  Arounds within that carefully defined target market.  Every time a competitor gets a new listing in the target, we postcard or door hang every home up and down the street around the listing.  The reason is obvious:  usually when one listing appears another follows within a week or two.  We want these possible sellers to have our information at this time.

3.  For Sale By Owners.  This is a broader target.  Of course you want to be all over FSBOs that occur in your target market (Expired Listings, too – I tend to lump them together).  But you also want to expand beyond your target as well.  You have the best and most appealing program for FSBOs.

4.  C.I.s.  Anyone who knows your name and associates it with real estate needs to hear from you regularly.  Of course we have the built in automatic CI program in OMS which reaches out to these important people 8 times a year, but occasional phone contact is important as well.

5.  Just Listed/Just Sold cards.  These go around all of your own listings, whether in your target market or not.

That’s it.  That’s the core of Help-U-Sell Marketing.  It’s what every broker needs to have in place and running every day.  Then it’s just a matter of adding in appropriate items as they become available.  Perhaps a newspaper campaign makes sense or radio or Little League sponsorship. These are added to the core marketing, not substituted for it.   Always the goal is to be more visible.

Now, let me take a minor detour to make a case for something many of us have abandoned:  seller participation.  Let’s assume you have the five key pieces of core marketing cranked up and producing.  You are making a real impact on your target market as they are seeing your information multiple times throughout the year.  You know it’s working because you’re getting listings in your target.

What if you start talking with your sellers about the benefits and potential savings of participating in the marketing by holding their own open houses?  Assume you have 3 listings in your 3,000 household target market.  Let’s assume that all 3 are holding an open house on Sunday. Each puts out 7 directional signs. Can you imagine the powerful impression those 21 signs will make?

It would be just a matter of time before you became the Big Gorilla in the neighborhood!

Measuring Success

We measure the success of our businesses in lots of ways and each tells us something different about how we are doing.  Some, though important are not quantifiable;  personal satisfaction and sense of accomplishment come to mind.  You can’t measure them numerically but you know when they are present and when they are not.  From a pure business standpoint, however, there are really only three metrics that establish the success of a business:  Profitability, Market Share, and Market Value.

Profitability:  Tells us how efficiently we are operating the business and whether we are building a business worth having.

(Let me digress with an example!  Suppose you are an ordinary real estate broker.  You have 20 agents and gross on average $90,000 per month.  That’s 20 agents doing half a side a month in a $300,000 neighborhood with you charging, say, 6%.  However, month after month you look at your bottom line, and you see $500 or $1,500 or $2,000.  It seems very little return for closing ten sides a month!  Obviously you are not running very efficiently!  So you do a little analysis. You look at your expenses, and right there you see it:  75% on average going for agent commissions.  It is the single biggest item in your operating statement.  You’re not really operating on $90,000 Gross, you’re giving away $67,500 before you even begin to pay expenses.  Fughetaboudit!  This is definitely a business not worth owning!  Shut it down!)

Market Value:  What is your business worth?  What could you sell it for?  Truth is, most residential real estate businesses are not worth much.  That’s because the business is being built by independent contractor agents who can leave at any time for any reason.  Therefore the value is really the office location, signage and fixtures plus the listing inventory at the time of purchase.  Your Help-U-Sell business is different.  It is a business built on marketing and replicatable systems.  It is not personality driven (like most ordinary real estate businesses).  If you’ve done it right, a new owner should be able to step in, take  control of your marketing and office systems and continue to produce just as you have.  That’s a business worth having and one that has value.

Market Share:  This is where I want to focus because it is a much bigger topic than you might think.  Technically, when we talk about market share we’re talking about what portion of the business in your target market you are getting.  In real estate, that means closed sides.  So, last year, how many closed sides were done in your target market, and how many of them were done by you?  Is it 2% or 5%?  Is that percentage growing or shrinking?  What is a reasonable goal for next year?  And what are you going to do differently to achieve that?

Close Sides market share is a wonderful metric, however there are problems with it, too.  First, it’s a big number that fluctuates a lot in our business.  It wouldn’t make sense to measure closed sides monthly; in our business we have big closing months and not so big ones.  It makes more sense to measure it annually or semi-annually, and you should.

What makes more sense to measure your effectiveness month in and month out in your target market is Listing Share.  This month, how many listings were taken in the target?  How many of them were taken by you?  What share is that?  20%? 50%?

Not only does Listing Share give you a metric you can track from month-to-month, hopefully seeing growth throughout the year, it measures your success at getting your key message into your target market.  You are in the business of teaching home sellers that they can ‘Sell Fast and Save Thousands’ with your Help-U-Sell office.  If your Listing Share is growing, so is your effectiveness in marketing that message.  I think you should be measuring Listing Share every month and cumulatively throughout the year.

Going one step further, there are a couple of Key Performance Indicators that don’t really demonstrate the success of your business but rather your ability to deliver on the promises you make your home seller clients. They are Days on Market, Sale to List price ratio, and % of in house or seller generated sales.

To me, Days on Market is from Listing to Pending status.  We don’t really control how long it takes to get from contract to closing and that’s why I don’t like to include it.  However some MLS’s don’t report the under contract date, so you have to work with the data you can get.

Sale to List price ratio shows how far off list price sellers had to come to make a sale.  Did they 95% of list price on sale?  Or was it 97%.  This does indicate your effectiveness at helping sellers set a realistic price but can also demonstrate the power of your marketing to generate a flow of buyer prospects.

% of In House Sales and/or seller generated sales is important to Help-U-Sell Brokers because these are the situations where sellers save the most.

All three of the KPI can be used as powerful marketing ammunition.  Compare your results on the first two against the MLS in your target market.  You will almost certainly find that your performance is far better than the MLS, and that’s something to share with potential sellers.  The third KPI is valuable in helping a seller decide to participate in the selling process by holding their own open houses.  It says, ‘You really can do this and save a lot of money!’

Before we leave this topic I want to hammer home one point.  Most of what I’ve talked about here involves your Target Market.  That’s probably NOT a Zip Code or Codes (too big) or the entire MLS (WAY too big).  It is that town or collection of Carrier Routes you have analyzed and chosen to plant your flag.  It’s where you focus your marketing, where you are the expert.  Measure your Market Share, Listing Share and KPI there, where your program is aimed.

GET CO-OP’d!!

Ok, gang it’s time (FYI:  ‘gang’ means Help-U-Sell Brokers).  Mike Paholke and the folks at Excel have opened ordering for the Co-op EDDM program.  You can order your mailers now through Jan. 15, in bulk, for close to half what it would cost at any other time.  The Co-op program runs four times a year, so if your target market is, say, 2,000 households and you want to be in their mailboxes once a month, you probably need to order 6,000 pieces now to get you through to the next Co-op date.  In fact, I’d probably order 8,000 just to be sure.  Mike will warehouse your pieces for free and send them out whenever you tell him to.

Just to be sure you understand what a deal this is, if you were to order 2,000 EDDMs at random, your cost, including postage, would be about 50 cents per piece.  Ordering during the Co-op run, the cost drops to:

29 cents per household!

Not too shabby!

So let’s get serious about marketing in 2016, make regular EDDMs to your target market a key component and minimize your cost by ordering during the co-op.  Just in case you forgot, here’s the website:  www.husmailnow.com.

 

A Must See For The New Year

Help-U-Sell Brokers, you know we talk about list to sale price ratio and days on market all the time.  We use those metrics to show that our production is far superior to that of the average broker/agent in the MLS.  And, honestly:  I have never seen a Help-U-Sell office that did not beat the MLS on those two metrics!

Well . . . you need to see this 10 minute video.  It documents how a Coldwell Banker mega-team in Miami manipulated that important data to skew the ‘truth’ in their own favor.  What they did is truly devious and has big implications for decision makers in lots of industries.

So, grab a cup of coffee and settle back, maybe toggle to full-screen view, and close out the year learning how NOT to do it.

Target Your Market

This is a step-by-step elaboration on the previous post.  Help-U-Sell Brokers:  I believe this is the single most important thing for you to do right now. That’s why I’m giving it so much voice.  

Help-U-Sell Real Estate is a target marketing business.  Seriously.  We’re not like other real estate companies who leave marketing up to the whim of the agents.  We actually work at it with intensity and focus.

Target marketing begins with . . . well, with the target.  Where are you going to market?  At Help-U-Sell Real Estate we make that decision dispassionately and guided by data.  We look for marketplaces where the turnover rate is high and where there is enough business to sustain the office.  In most cases, this boils down to a zip code or two.  And that’s the problem:  zip codes are a lousy way to target!

Think about it!  In every zip code there are neighborhoods where you don’t want to spend your marketing dollars.  You have that area where all the new construction is occurring; it won’t even be ripe for marketing for another 3 years.  You have that area that is mostly industrial; not exactly the kinds of households you’re looking for because they’re not households at all.  How about that side of the zip that is mostly apartments?  Do you want to send your marketing pieces there?

No.

Really:  no.  You are Help-U-Sell Real Estate, remember?  Your marketing is aimed at one group:  home sellers.  Even though we acknowledge that Help-U-Sell is all about the buyer, we don’t market for them.  We market our superior offer to sellers so that we can take a ton of listings that generate a healthy flow of buyers into the office.  We get buyers by having inventory.  Don’t forget that.

The problem with zip code targeting is that zips are loaded with irrelevancies.  They also tend to be pretty large.  Most zips come in between 14,000 and 20,000 households.  To effectively market to that large a geography would take a ton of money.  What usually happens with Help-U-Sell offices is they target a zip or two and go after it with a small budget.  They end up taking a listing here and another there and another way over there . . . and never achieve the kind of concentrated visible success necessary to blast off.

Instead of targeting zip codes, let carrier routes guide you.  A carrier route is the actual neighborhood the letter carrier walks to deliver the mail.  Most zips are made up of a couple dozen carrier routes.  You can choose carrier routes with higher turnover rates, the right mix of properties, in the right price range.  The problem is:  how do you get accurate sales data by carrier route?  And how can you see where a carrier route is?  Let’s solve those problems right here:

First, run a 12 month sold report from your MLS on each zip code in your overall market.  That’s probably 2 -4 zips.  Export the reports to an Excel or CSV file (if you are confused by this, drop a message to support@helpusell.com).  Send the exported data to Mike Paholke at Excel Print/Mail:  mikep@excelprintmail.com, and ask him to sort it by carrier route.  He will return a report to you that breaks it all down, shows the mix of single family to multifamily homes, median household income and median home value.  Most important, he will have a turnover rate for every carrier route in the zip code.

Step one:  eliminate all carrier routes with low turnover rates.  I consider 4% to be OK.  Anything approaching 5% or more is great.  I usually eliminate all carrier routes with turnover less than 3%.  By the way:  turnover rates change over time.  That route with 1.6% this year may be at 4% next year – which is why you want to do this exercise at least annually.

Step two:  eliminate carrier routes dominated by rentals.  Your first indication of this would be the number of households in the route that are in the ‘Multi Family’ column.  However, understand that the postal service classifies multi family differently than we do.  They consider any household with  its own street number to be single family.  So an apartment at 123 Elm St. would be classified ‘Single Family.’  A condo with the address, 123 Elm St. Unit 4, would be classified as Multi Family. The only way to know for sure is to see where that particular carrier route is located, which brings us to the next step of the process.

Step three:  go to https://eddm.usps.com.  Put the zip code in you are considering and a map of the zip will come up.  Click the button for ‘Show Table’ and select the carrier route in question.  Click the ‘Hide Table’ button and the route will be highlighted on the zip code map.  Do you recognize this location?  Is it condos or apartments?  Perhaps you might need to take a drive to be sure.

Go back and forth between your list of surviving carrier routes and the USPS website, looking at each carrier route.  Be guided by the following criteria:

1.  The number of households you select should be driven by the amount of money you are able to spend on marketing.  We have a couple of rules of thumb for that at Help-U-Sell Real Estate.

  • Marketing should account for 33%-50% of your overall budget, including marketing.
  • Marketing should equal 10% to 15% of your anticipated annual Gross Commission Income.

2.  Effective marketing is all about getting your logo in  front of your target group every single day of their lives.  That’s why we regard every listings as a marketing bonanza:  each one provides ample opportunities for signs, mailers and so on.

3.   While there is no hard and fast rule about what it costs to accomplish that kind of saturation, I find that smaller targets (2,000 – 3,000 households) take about a dollar a household per month to effectively establish the brand.   As the number of households goes up, the cost per household declines somewhat.  Once the brand is established and the office is enjoying at least a 20% share of the market in the target area, signs start doing much of the branding and the marketing budget can be reduced a bit – but why would you want to?  Once you’ve achieved a reasonable market share in the target area, continue  marketing and expand the target!

4.  When selecting carrier routes, it’s best if they are contiguous.  Four or five carrier routes clustered together benefit from synergy :  a listing in one carrier route creates signage opportunities that can be seen in the other carrier routes.  On the other hand, carrier routes at opposite ends of the zip code are like little islands.

5.  It has already been mentioned, but do this exercise at least annually.  Turnover rates – which are the key to marketing efficiency – change over time.  A lower turnover rate today may become healthy in a year.

If you are serious about success, growth and HAVING FUN while building a successful business, you really must do this.  It is Help-U-Sell Bedrock.  It’s who we are and what we do.

 

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