Category: Marketing

Welcome to Normal

REALTOR.com is out with its market data report and analysis for August and has pronounced that the national real estate market stabilized over the summer selling season and is now nearing normal.

Normal . . . Oh! how we have longed to hear that magical word.  Normal, where an adequate number of homeowners need to sell and an equally adequate number of home buyers want to buy.  Normal, where it takes 45 – 90 days to sell a home and where prices increase in the 3% – 5% a year range.  Normal, where smart marketing works, producing leads.  And Normal, where home sellers are very interested in saving money on real estate commissions.

Getting to Normal wasn’t easy.  We were mired in market sludge as the year began but starting sometime in February, something happened.  Home buyers who had been sitting on the fence for so long they had splinters, started to come back into the market.  By the Spring we had lurched forward to a new kind of craziness, in places reminiscent of the lunacy that preceded the crash:  low to non-existent inventories, multiple offers, over asking price bids, sudden stupid appreciation.

In my own San Diego neighborhood (Hillcrest/Bankers Hill) I remember looking at the MLS one week and seeing 3 active listings.  Three. The next week there were 15 as home sellers, hearing the news that crazy buyers were back in the market and that NOW was the time to sell, raced to get in on the action.  The effect was like pulling the emergency brake on an out of control car.  Everything stopped . . . for a few weeks.

The craziness subsided a bit and we eased into Summer with a little more sanity.

Now we’re into the last months of the year.  In a normal market, this is when ordinary Realtors go into hibernation.  Nothing happens between Thanksgiving and New Years Day, right? Of course, that’s ordinary thinking for ordinary brokers.

But you guys, you Help-U-Sell guys are anything but ordinary, remember?  By their standards you are just plain weird!  So this year, after you get home from Success Summit, do the weird stuff you did last time the market was “normal.”  Market like mad to the end of the year and hit January with a white board full of new listings and a pipeline overflowing with sellers who wanted to wait until after the first of the year.  Because each new listing is an opportunity to market for and get another and another and another, there is no better prep for the Spring Selling Season!

Have a great time at Summit this year, gang.  I will be there in spirit and look forward to hearing about all the great stuff that was shared!

The Stupidest, Dumbest, Lamest, WORST Ad in Real Estate History

I don’t want to offend anybody.  I know a lot of really good Century 21 agents and a bunch of good Century 21 brokers.  But, come on!  The ads over the past several years have been so bad that they are embarrassing!  I mean look at the stupid thing that graces the back cover of the latest California REALTOR Magazine:

Century 21 Ad

I guess this is an improvement over the ads in this series that ran over the past 3 or 4 years.  They featured beautiful actors and actresses smiling – or more often smirking – confidently at the camera, pretending to be Century 21 agents while glowing adjectives flowed below.  This ad makes no pretense at reality.  It’s a cartoon.  It’s a parody of the company’s own advertising.

If I were a Century 21 person (and I was for more than 20 years) I would be insulted, first by the color scheme.  There’s not one drop of gold in the damn thing.  Century 21 corporate declared war on gold sometime in the early ’90s (sad to say I was there and in on the discussions; I dissented).  But no matter what they’ve done, no matter how hard they’ve tried to eradicate it, to distance themselves from that color,  twenty years later THE PUBLIC still sees GOLD as Century 21’s color.

I watched an episode of ‘Breaking Bad’ last night – from the first season.  They wanted a real estate agent on screen to be easily identified as such.  What did they do?  Put her in a gold coat.  No question.  Instantly anybody watching knew that was a real estate agent.

That kind of brand equity is priceless.  And it’s very difficult to achieve.  Century 21 owned the color gold and blew it up . . . and replaced it with . . . Green?  No, Bilious Green?

But let’s take a wholistic view, too: let’s look beyond the bad color and the dumb message.  Where is this ad placed?  Back cover of REALTOR Magazine.  That’s a $50,000 – $75,000 pop, depending on how big the contract is.  The ad seems to be aimed at the buying and selling public . . . but it’s placed in a publication for REALTORS.  So it’s suppposed to be a recruiting ad?? Or are we just becoming a little unfocused in our old age?

Again, the first ads in this series really were recruiting ads.  The idea was by showing actors as bright, confident and beautiful Century 21 agents, failing agents at other companies would want to jump ship for a chance to be just like the ‘agents’ in the ad.  (With logic like that is there any wonder per person productivity at Century 21 is said to have been in decline for decades?).

So back to the placement of this ad:  I guess REALTORS seeing this ad are supposed to feel as if Century 21 agents have some kind of super-human advantage over them with buyers and sellers.  Really?  From this silly, embarrassing ad they are supposed to feel that?  If I were a competitor in the field, I’d put this ad in my listing presentation to illustrate to potential sellers how stupidly some real estate companies spend their money!

Listen:  I got a PhD in Branding and Marketing at Century 21 in the 80s and 90s.  I learned from legends like Bruce Oseland, Elaine Hamilton, Dick McKenna, Rick O’Neil, Don Martin, Marty Rueter and many others.  This was one of the things Century 21 did extremely well in the early days. They did it so well that, in the late 70s – early 80s, the effectiveness of their marketing was scary!  They pretty much owned the concept of ‘Real Estate’ in the consumer’s consciousness.

The monkeying with with brand that started in the mid-nineties and continues to this day has undone that once very special organization.  Today,  Century 21 stands for generic real estate at its most mediocre.  There is nothing special about the consumer offer (it’s just like everyone else’s), nothing special about the operating system (It’s an old -fashioned, percentage based, agent oriented model), and nothing special about the identity.  If the function of marketing is to express the culture of the organization . . . well, I guess this ad has succeeded because today, Century 21 stands for nothing.

And it breaks my heart.

Hey, all of you marketing scholars out there!  If you want a great case study on how to build a powerful brand and then systematically destroy it . . .well, here it is.

Footnote:  There is a Help-U-Sell logo on this blog.  It is a brand and operating system I happen to love.  I do not, however work for Help-U-Sell.  I did, but not now.  Please don’t assume that I speak for that organization or anyone in it.  This is my blog and my opinion; so if you are sharpening your arrows, aim them here. -JD

Flashback Friday: Marketshare

Today I”m thinking about Marketshare and found this post from Spring of 2010 that addresses it from a Help-U-Sell perspective.  This metric was so important to us 10 years ago.  We doggedly pursued it, pushing and pushing to increase it.  We watched it like no other metric in the book because it was the most meaningful measure of success.  

I’m afraid, in the downturn, all that flew out the window.  We took our transactions where we could and the idea of dominating a defined geography went away.  I strongly believe we have to get back to a geographically focused marketing program and, therefore, an obsession with marketshare as a measure of success.

Now, if you are roaming all over God’s earth taking listings wherever you can within a 100 mile radius of your office, I wish you luck with that.  It was a good strategy five years ago, but today, it’s a recipe for both burnout . . .  and lousy customer service.  However, if you want to get serious about establishing Help-U-Sell as the dominant force in your TARGET market, you must get back to the basics of:

  • defining your target market
  • collecting data about your target market
  • tracking your share of the target market

One last thought:  Help-U-Sell is a company built on a superior offer to home sellers.  In the post that follows we talk about tracking your marketshare based on closed sides. This method (which is best) takes buyer sides into consideration as well as seller sides.  But since our marketing is oriented to the seller’s side, here’s a quick and easy alternative.  Count the number of active listings in your target market and compare that with the number you have (in the same target market, of course – those outside don’t count).  Your listing marketshare ought to be very similar to your closed sides share.

I’m working through the old Operations Manual and just read through the section on marketshare.  We used to tell everyone they should get 25% marketshare.  That was the goal.  For everyone.  Did we have members who did that?  Yes, quite a few, actually.

We calculated marketshare by taking a carefully defined geography — the area(s) in which the member intended to do business, into which he or she directed marketing — and discovering what portion of the total number of closed sides done in that area were the member’s.  Further dissection of the marketplace into smaller units, like carrier routes or individual neighborhoods, might reveal that the member had 24% marketshare in this neighborhood and 14% marketshare in that neighborhood and so  on, each adding up to a total share of the target market.  We wanted to see target markets in the 10,000 – 15,000 household range with overall turnover rates in the 4% – 5% range.

The problem with this prescriptive approach is that it does not take in to consideration the vast differences that exist between markets.  Factors like:  the sheer number of competitors working the same area, the density of households, the impact of REOs on one market versus another, urban vs. suburban vs small town vs. rural areas . . . these were not considered.

Suppose your target market is a densely populated urban neighborhood.  You have 15,000 households and could probably walk your entire area in a few hours. Mostly it’s condos in the $200,000 range.  You set your fee at $3,950 and you figure with a 50/50 mix of buyer sides and seller sides, your average fee per closed side will be about $4,500.  You build a first year budget with expenses at about $12,000 a month.  Non-REO Turnover is at 4.2% — that’s 630 sales a year or 1,260 available closed sides.  Break even would be at about 32 closed sides:  a 2.5% marketshare.  This becomes our first milestone:  the point at which you start to look for ways to expand the number of transactions you can do by adding staff or improving systems.  You’d expect to hit that milestone within the first year and to be at 3% -5% marketshare  (36 – 63 closed sides), in your second year — and making a good profit.  Getting into your third year,  you’d want to be hitting  5% – 10% (63 – 126) closed sides.  This is usually where the ‘snowball’ effect takes over and as long as you’re willing to invest in more staff and better systems, an increase in marketshare and profit becomes very attainable, even up to say, 20% or 25%.

Now think about a smaller town, say 13,000 households.  Turnover is much lower:  3% in town and 2.8% in the surrounding county.  Although expenses might be lower and competition less fierce, average sale price and average fee are lower, too:  $3,200 per closed side.  A 10% share here (that’s 42 closed sides) — which was the tipping point in the above example — is just getting by.  It’s a nice job, but to be making money and building a business (not just a nice job), you’d need to be at 20% or more, and your snowball might not start until you were at 30%.

The first office needed 5% – 10% marketshare to be ‘thriving.’  The second needed more than 20%.

You have to think about more than just numbers of closings, too.  You have to consider the cost of doing business in each marketplace, the number of closed sides required to break even and how many it will take to get to a reasonable profit.

To further muddy the waters, you have to consider how you’re calculating marketshare.  We use closed sides.  Period.  That’s our yardstick and it makes sense from a dollars and cents perspective.  However, I met a Re/Max consultant once who told me they calculated marketshare on numbers of agents.  Production didn’t matter at all.  Just bodies.  When you think about it, it makes sense for their model. Re/Max operators make money by renting space and services to agents, so numbers of agents is a good measure for them (I’m not sure it’s the best measure for the consumer).

But even beyond that, marketshare is both static and dynamic.  Your static marketshare is a shapshot of a period of time.  It’s what we used in the examples here:  a one year shapshot  —  of all the closed sides done in your marketplace in the past year, how many did you have?  But your marketshare this month or this quarter is probably very different from your market share 8 months ago or two quarters ago.

Use the static, annual marketshare as your report card, the measure of the success of your business, the metric you use to set your goals.  But continually monitor the dynamic marketshare to make sure you are always progressing toward the next milestone and as an early diagnostic tool for problems in your operation or your marketplace.

Testimonials: How to Get Them and Why They Work

There are four key components of Help-U-Sell Marketing.  The four components work together to deliver our consumer message, which is:

We’re Here, People Use Us, It Works, and They Save

Ha!  I bet you thought our consumer message was ‘Sell Fast, Save Thousands,’ but it’s not!  That’s a slogan, and a darn good one too.

The message is the association we want consumers to make subconsciously whenever they see our logo. Our marketing should teach them who we are (a real estate company), how we are different (we save them money), and that other people in the local market have successfully used our service.

The four components of the consumer message are:

  • Pictures and descriptions of homes For Sale – our listings
  • Sold and Saved’s
  • An Easy Way or Smarter Way bulleted list of how we work
  • And Testimonials

These components work together to make the point . . . powerfully.  Really:  if any one of these items is missing, the marketing is weakened . . . and we start looking like every other generic real estate company!

Testimonials are key.  They give the reassurance a potential customer needs that this somewhat strange real estate company that promises savings actually works.  They calm skepticism to the point that most consumers will pick up the phone and ask that magic question:  ‘What do you do?’

30 years ago we asked for pen and paper testimonials.  It was a cumbersome process but yielded a concrete item that could be fanned out on a desk during a listing consultation or proudly displayed in the reception area of the office.  A little later came email.  Both of these methods required the client to sit down and compose a note from scratch.  Today there are much easier ways to get a testimonial.

Both Trulia and Zillow have an online review area where a consumer can rate their agent and comment on their experience.  It’s very easy to orchestrate:  you simply log on to your agent account and send a link to the survey site to your customer.  And you absolutely SHOULD do this with every satisfied seller or buyer because visitors to those large property portals rely on these reviews when deciding which agent to call.

Increasingly consumers are turning to Yelp to make local buying decisions, and your reviews there can also be helpful.

You want good reviews on all of these sites, but you don’t want to make the process difficult for your clients by having them go to three of four different places to give you a testimonial.  I mean:  some will happily do it, but it is asking a lot.  Instead, spread your testimonials around.  Once you have five or six in one place, ask your next five or six customers to go to another place.  I don’t know that having more than half a dozen really good reviews on Zillow or Trulia makes a huge difference:  six should be sufficient.  Once you have decent coverage on the third party sites, you can start to collect testimonials yourself.

Survey Monkey (surveymonkey.com) offers a free platform for building a survey form for collecting testimonials and reviews.  You make up your own questions and the Monkey can accommodate multiple-choice, ratings, text and other forms of input.  I’d suggest keeping your survey simple.  In fact, mimicking the review form that is on Zillow is probably fine.  Once you’ve setup your survey, you can send a link to it to all of your customers and start collecting their testimonials.

And then what do you do with them?  Put them in every piece of marketing you do.  Rotate them through your website, your blog and your Facebook page.  Read through them when you are having a rough week.  Call the testimonial source and thank them for their kind words and for the privilege of working with them.

If you’d like to see excellent use of Testimonials, check this out. 

Remember what Don Taylor taught us:  the most powerful form of advertising is word-of-mouth.  You want your business to be so refreshingly different and so consumer friendly that everyone you work with goes on to spread good rumors about you.  The testimonial is a powerful twist on word-of-mouth advertising.  Get them.  Use them.

PS:  Robbie is building a testimonial gathering mechanism in OMS that should be functioning in the next several months.

 

Flashback Friday: Charging Less, Making More

The ability to go into the marketplace with a financially attractive offer for consumers AND walk away from the transaction with more dollars than your more traditional counterparts is at the heart of Help-U-Sell’s appeal to brokers.

Think like an ordinary broker for a moment:

  • The success of the office is built on one thing:  your ability to attract and retain productive agents.
  • Your primary tool in accomplishing this is commission split — you know to be successful you need agents and to get them, you’ll need to pay well.
  • Unfortunately, the health of your bottom line is dependent on how many commission dollars you retain after splitting with your agents.

Put all of that in a hat and shake it up and you’ve got  . . . a mess!  Your formula for success is at war with itself! No wonder ordinary real estate offices suffer from embarrassingly low profitability if they make a profit at all (despite the fact that consumers think they’re paid way too much!).

Help-U-Sell takes dynamite to all of that nonsense.  First thing we do is demystify the listing process.  We toss out the notion that personality is what sellers buy when they list their property for sale.  Bunk! we say.  Listing is a logical thing.  If you present a system with a track record of success for a fee that is reasonable, most people jump at it.  Instead of two hour marathons where traditional agents warble on about how wonderful they are, listing presentations become simple, short and matter-of-fact:  here’s what we do, here’s what you do and this is what it costs.  Listing is so easy in Help-U-Sell that, well . . . even a Broker could do it.  That’s why we take the listing side of the business out of the agents’ hands.

We believe the listing side of the business belongs to the company, and the broker or an assistant (that’s different than an agent) takes all listings.  The agent’s role is on the buyer side, where we can afford to split commissions.  But, since we create all the leads for our buyer agents through our large number of listings and the power of our well-conceived marketing, we don’t have to give away the farm to get and keep salespeople.  We’re not asking them to call on FSBOS or Expireds, to knock doors or make cold calls to find listings.  We’re not asking them to master a slick listing presentation or memorize responses to two dozen common seller objections.  We just want them to take the prospects we’ve created and find them a property.   Good agents thrive at Help-U-Sell.

Back to the listing side;  here’s how the dollars break down:

Here’s where the ‘yeah-buts’ start to echo from the mouths of ordinary agents:

Yeah-but, with no listing agent the seller is getting less than full service!

Says who?  Full service is getting the property sold for the greatest walk-away dollars in the right time frame — and we do that every day.

Yeah-but, you get what you pay for!  When you list with me I’m going to actively market your property until it’s sold!

Um, let’s see . . . ‘actively market‘ . . . I guess that means put a sign in yard and a listing in the MLS, which then syndicates to a couple dozen Internet sites, right?  In my experience that’s what ordinary agents do when they get a listing.  In my Help-U-Sell office, we have a comprehensive marketing plan (that includes all of that and much more), orchestrated, monitored and constantly improved by . . . ME.  It’s not just a bunch of agents running around willy-nilly, making it up as they go along on every listing they take.

I could go on with the ‘yeah-buts,‘ but we try to keep these posts to a ten minute read or less.

We are a very proud group, and rightfully so.  We’ve taken the fluff and snake oil out of selling real estate and converted the process to logical systems that get results.  We’ve done it in a way that saves consumers thousands of dollars and makes our brokers a nice profit.  Who could ask for anything more?

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