Category: The Industry

Did You Stop Marketing? Or Did Marketing Change?

Help-U-Sell Marketing was always intense and usually direct mail oriented.  You carefully chose your 15,000 +/- households and then hit them over and over with ETMS and Brag Cards, Free Weekly Lists and Save Thousands ads.  The price tag for all of this was large but the pay off (if you chose your target market wisely) was huge.  I talked with a former franchisee last month who described his operation as a machine.  He set up his marketing and hired an assistant whose job was to handle the in bound seller inquiries and book him five listing appointments a day.  That’s all.

And it worked wonderfully . . . until the housing market began to unravel in late 2005.

Suddenly sellers were faced with declining values, a weakening economy, cutbacks, layoffs and a tightening credit.  Buyers weren’t buying and sellers couldn’t sell.  The power of that wonderful marketing machine faltered too.  By 2007, you could spend thousands of dollars each month on marketing and get very little return.  Offices that hadn’t worked buyers, who didn’t develop a client base, who never learned how to talk with an expired listing or a for sale by owner — in other words:  the ones who had relied on marketing driven listings alone to generate revenue — began to fail.

At the same time, the survivors began to emerge.  Sharp, scrappy and determined, these brokers had the guts to look at the new reality with new eyes.  The realized that, just as the market had changed, so had the consumer.  Those brave souls who ventured into the market were doing their homework and doing it online.  Buyers were in control and spent months on the Internet, looking hat houses before they were ready to ink a deal.  Putting two and two together, smart Help-U-Sell brokers realized that marketing to sellers was no longer efficient and went after buyers where the buyers were hanging out:  the Internet.  They invested in websites, search engine optimization, social networking, blogs and more.

They also went back to school.  They remembered that every real estate transaction was about solving problems, a buyer’s problems and a seller’s problems.  But the problems had changed dramatically from the days when five listing appointments a day could make you a star.  Buyers were having difficulty getting financing and sellers were upside down.  We had to learn mortgage lending to identify those  buyers we could help  and we had to learn short sales to minimize the damage to our sellers.  Help-U-Sell brokers became navigators, pointing the way for buyers and sellers to make it through the new maze of market realities.

Direct mail marketing didn’t die — it just went on hiatus.  We used the break to learn how to work with new tools to generate leads and, with perfect timing, new Help-U-Sell websites bloomed on the Internet.

Today, the real estate market is starting to wake up.  I know this because investors are in an absolute feeding frenzy and have been for almost a year.  Investors always set the bottom of the market — when they come out to play up ticks in activity and value are not far away.  Just as the market improves, we also have to start ratcheting up our marketing.  Brag cards are a great way to start — even if they are hung on doorknobs rather than delivered in mailboxes.  A carefully targeted Penny Saver or super market mailer campaign might also make good sense.  Remember:  we survived the downturn by adapting.  We changed the way we marketed.  We will flourish in the upturn by doing the same thing.

The Internet was (and continues to be)  all about reaching buyers.  It’s time to start reaching sellers, too — and nobody knows how to do that better than we do.

What Consumers Wanted and What They Want Now

I got licensed back in the Pleistocene Era, when dinosaurs roamed the earth:  1976.

Consumers had very little information about real estate, and it wasn’t just MLS-type property information they were lacking.  We had five or six television stations (channels in the UHF range – above channel 12 – were just starting to appear) and so what became a major source of information for many was just getting cranked up.  FM radio was mostly college stations and public broadcasting — AM was king — but there was no news or talk radio.  Not only was there no Internet, there were no PCs.  Information traveled at the speed of sludge and John Q Public had a very limited range of understanding about real estate and about many other things.

REALTORS held the keys to the kingdom:  the MLS.  The only way consumers got to information about property for sale was through us.  And though there were a few FSBOs, most were willing to pay traditional percentage commissions to gain access to the information.   Funny, though:  with an average sale price of $65,000, a commission of $3,600 — though big — didn’t irritate as much as today, when selling the same house would probably cost in the neighborhood of $15,000.

Sellers expected us to do everything.  They wanted to sign the listing agreement and disappear back into their lives, letting their agents take over the process and magically produce a ready willing and able buyer.  I spent much of my agent-time keeping my sellers (buyers too) informed about the process:  what’s coming next, what to expect, what problems might come up and how we’ll deal with them, etc.  They were so grateful to have my understanding of how real estate worked at their disposal.

You spent a lot of time with buyers just narrowing the field of their wants and needs.  They needed to see lots of houses to get down to the style, size and location of the perfect house for them and so showing 15, 20, 30 houses over the course of several weekends was not unusual.  They had no way of ‘seeing’ property unless you put them in the car, drove them over and escorted them through.  The best buyer was always the transferee, who often came with home buying assistance from their employer and usually had a very limited time to find the perfect home.  With the transferee you had the chance of meeting a buyer on Friday and writing an offer for them on Sunday — and that was reason to celebrate!

Today, consumers have ALL the information at their fingertips.  The listing information they can view online is almost identical to what we can see, and tools like Listingbook, Zillow and Trulia make it possible for them to easily manage their own home search process . . . until they need a door opened.  More than that, consumers today can get information about every step of the home buying and selling process by typing a search string in Google.  The air waves — radio, television and Internet — are loaded with information about property transactions and there are whole television channels devoted to real estate.

Sellers look to us to plug them into the marketing resources that exist:  MLS, our website, syndication to as many other aggregators as possible.  They also look to us to spread the word about their property locally and to promote it to our Sphere of Influence.  The goal is the same as it’s always been:  exposure.  Today, because the paths to exposure are so well developed, the task is more management of marketing than creation of marketing.

More than exposure, Sellers today look to us to solve their property problem.  Whether they’re upside down, facing foreclosure or just trying to hang on to as much of their equity as possible, our role is to help them map a course that gets them as close to their goals as possible.  Today that often means minimizing the pain.  Really:  150 years ago, when I was selling real estate, simply dropping the new listing in MLS and letting the industry find a buyer in a reasonable period of time was fine.  Everybody moved and everybody was happy.  Today it’s much more about using your knowledge to accomplish the best possible outcome for your clients, and your knowledge has to always be growing.  That’s why, as James Brown said, it’s important that we all stay in school!

Buyers want to do much of their searching on their own.  They want to spend hours on the Internet looking at listings, saving and eliminating them.  They want to drive by before deciding whether they want to see the inside.  They don’t want to be held captive in the back seat of your car while you show them house after inappropriate house.  The value we can bring to them is in giving them the best tools to help them do that self-directed searching, making it easy for them to get quick answers when they need them, and in anticipating problems before they occur.  I keep saying this:  Listingbook is your best friend when it comes to doing all of this.

The job of REALTOR today is very different than it used to be.  It’s not that we DO LESS than we used to do, it’s that our clients DO MORE.  It’s also that the job has become more specialized and focused.  The one thing that hasn’t changed is the way ordinary real estate brokers charge for their services.    That’s still stuck in the Pleistocene Era.  The tough market of the last few years is like an Ice Age and as with all Ice Ages, the end result will be extinction for certain species.  Not to worry.  As the ice recedes, newer, better, stronger, more adaptable species emerge and dominate.  That’s us.

Rumor Mill

Real estate — particularly franchised real estate — is a pretty small community.  We all know each other or at least a little about each other.  It’s kinda like living in a small New England town.  (Peyton Place?  Well, not exactly). That’s why, when one of the major players makes a move, the ripples reverberate through he industry and speculation about motives and intent move to the forefront.

We’ve had that kind of speculation for the past two weeks following the resignation of Century21’s president of eight years, Tom Kunz.  He was immediately replaced by a Coldwell Banker commercial guy.  I have deep Century 21 roots and have heard lots of ideas about why this happened and what it means.   I discount them all because, frankly, those putting them forth were not in the room.  The only people in a position to know what’s really going on aren’t talking.

I know Kuner and remember him as one of the best sales people I’ve ever met.  Our paths first crossed in the late ’80s when Tom was given the task of selling an absolute disaster of an automation system to the Century 21 brokers.  It was early in the history of computers and real estate, so it’s no surprise that this primative venture was a mess.  Still, Tom maintained his attitude and his smile and worked tirelessly to solve the problems and keep things moving forward.

Then, in the late 90’s — I was a consultant by then — we worked briefly on a project together.  Cendant was rolling out a huge Internet based reporting process and I was in charge of  implementation.  I convened a group of strong Century 21 brokers and corporate staff to brainstorm the rollout.  Tom was there and dominated the meeting.  His ideas were crisp, convincing and ended up shaping that whole process.  The rollout was a big success.

I know that by-and-large, Tom, the President, was adored by his brokers.  That’s why everyone is surprised by the change.  Still, Century 21’s marketshare has fallen from a high near 13% in the mid- 80’s to something in the neighborhood of 5% today.  Like all of the other national franchises — except one, of course — they are saddled with the same worn out agent-focused business model we all know is destined for extinction.

Yesterday I talked with one of my old friends in that system.  While most of the speculation about the change has been wild and even silly, this person’s idea seemed to resonate.  The theory is that Century 21 may be preparing to move more in the direction of the Coldwell Banker model.  Instead of an office on every corner, they may be planning to go forward with fewer but stronger offices, hence the installation of a CB guy at the top.

If that’s the case, it will probably be a positive move for them.  After all, that’s similar to what we’ve spent more than a year doing and I think Help-U-Sell is better than it’s ever been as a result.

Just a little advice for Century 21 Brokers (and Help-U-Sell brokers, and all brokers for that matter):  struggle and change are always present. It’s the nature of our business.  The best course of action is always to focus on your business — you know, the one you can actually control — and do the very best you can do with it every day.  All of the chaos and uncertainty you see around you will work itself out eventually.  What’s important is getting up every day, putting one foot in front of the other and helping as many people as possible achieve their housing dreams.

Equity in the Name

New Help-U-Sell brokers sometimes stew way too much about their DBA.  They want to come up with the perfect name, the one that expresses who they are;  the one that will kick their marketing effectiveness up another notch.  Is Help-U-Sell Superior Homes better than Help-U-Sell Apex Properties?

Truth is:  the consumer could not care less.

And that’s one of the fundamental strengths of the Help-U-Sell system.  Think about it:

An ordinary broker, running an ordinary agent-oriented office, is building . . . very little, really.  His business is driven by the personalities of his agents and the relationships they develop.  There is no unique consumer offering that draws people to the company.

In 2010, very few people call ABC Realty and say, ‘Hey, ABC, come list my house.’  No.  They call up Sally who happens to work at ABC and say, ‘Hey, Sally, come list my house.’  And you know what?  When Sally goes down the street to go to work for XYZ, they’ll call her there too.

So when that ordinary broker decides it’s time to cash in and move on, when he attempts to employ his Exit Strategy, he finds he has little to sell.  The value of his company is a gamble at best.  All a buyer gets is the chance to keep the agents who have done the business and the chance to keep the listings and clientele they have amassed.  And it’s a fair bet that at least some of those agents will not like the change and take the opportunity to move on down the line.

It’s so different at Help-U-Sell.   We have a business model and a consumer offering that people seek out.  They call Help-U-Sell every day and say, ‘Come list my house.’   When the Help-U-Sell broker decides it’s time to move on, he has a business to sell that can continue to function after he is gone.  The buyer is getting an established enterprise and the transition from one owner to the other will likely be invisible to the consumer.  The DBA becomes irrelevant:  it’s Help-U-Sell that matters.

But, ‘Oh!’ you say, ‘Real Estate has always been a business built on personal relationships!  People want to work with . . . people, not systems!’

That’s absolutely true.  But most people are also interested in saving money and they will often investigate their alternatives before even working with a pal.  That’s when they discover that we’re people too! Yup, underneath the neat system that gets results and saves money is a group of really good, competent, likable people.

That’s why so many of our established brokers enjoy great repeat and referral business.  Oh, the savings remains a driving factor, but it’s the personal relationship that turns satisfied customers into raving fans and keeps them coming back again and again.

I’m not seriously suggesting this, but I really don’t think it would make one whit of difference if you chose ‘Umm’ as your DBA:  Help-U-Sell Umm Realty.  Or maybe Help-U-Sell Acme, Ace or ABBA.  What matters is that first part, the part that consumers recognize as leading to savings.

 

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