I’ve been thinking a lot about this lately: the very specific process we, as Help-U-Sell Brokers, undertake when preparing to market. We used to spend more than a day on it in University, which underscored its importance. If you’ve forgotten some of it, here’s a brief reminder:
First, we have to be clear about what we are marketing FOR. The answer, without hesitation, is SELLERS. Our powerful consumer offer (sell fast – save thousands) is directed at home sellers. It is our competitive edge. We can beat everybody on that playing field. When we shift our focus to the other side of the business (buyers), the differentiation is lost and we are just like everyone else. Even if we do something crazy like offer a rebate (why would you ever do that?), we’re not doing anything any other broker couldn’t do.
You might argue that we owe it to our sellers to market for buyers for their properties . . . and you would be right. However, we’ve found out over the years that the best way to market for buyers is to control inventory. Buyers find their way to brokers who have listings in the area in which they want to live. So the best thing you can do for your listed seller . . . is to go out and get another listing, and another and another.
Next, we have to get clear on the budget. How much can you commit to spend on marketing each month – without fail – for the next year? Maybe you’re just getting started or are coming out of a down market and don’t have much free cash; that’s ok. Acknowledging that fact and letting it guide your decisions about marketing is the smart thing to do. The alternative would be to create a marketing plan that will break you. Most of you are further along than that and can budget more . . . but how much more?
Think like a Help-U-Sell Broker. Remember what you learned in University? Ideally you want to cover your operating expenses with 1 1/2 to 2 of your Set Fees. In some situations we may have stretched that to 3 fees, but that would be pushing it! If your fee is, say, $5,950, you’d probably want your expenses to come in at or near $12,000 a month. How much of that should be devoted to marketing?
Rule of thumb #1: about a third. Really. Think about that. $4,000 a month in marketing!
I know you want to argue about that; you think it’s way too high! But it’s not. That’s the formula we used to dominate local markets and terrify ordinary brokers for years. It’s true that with the Internet, marketing has gotten a little less expensive, but there’s also a problem in that.
I keep running into brokers who grasp at online marketing as if it were the answer to all of their lead generation issues. They see what others are doing and it’s cool; and most important, it’s cheap! And they want to drop everything that looks tougher or more expensive and put all their eggs in that online marketing basket. That’s a mistake.
Consumers seeing your online marketing – whether it’s Google AdWords or Facebook pay-per-click or anything else – assume they are looking at a message from a large, faceless, generic organization. They don’t see your online ad as being from the friendly guy down the street; they don’t see it as local or personal. When they receive a postcard or EDDM piece in their mailbox or a CI followup piece, the KNOW it’s from someone who lives, works and thrives in their local neighborhood. They see a sold and saved and recognize the house. They read a testimonial and realize it’s from someone they met at a party. That’s powerful!
Online marketing works – and works well – when it is in support of a strong local analog marketing campaign. Remember that $4,000 marketing budget in our example? Ideally $3,000 of it should be spent on Arounds, Brag Cards, EDDMs, CI follow up mailings, even print ads. The balance should go to online marketing. If that’s how you’ve structured your marketing, when a local consumer sees your Facebook ad or comes across your ad on Google, they think, ‘Oh, that’s that company down the street and around the corner. They sold the Smith’s house last year.’ And that only happens when you’ve been in their mailboxes and in their line of sight on a regular and continuous basis for some time.
So, the final step would be to decide where to spend your budget, and to make sure you allocate heavily toward local visibility oriented marketing – what I call analog marketing. Spend only about a quarter to a third of your total marketing budget online. And if you are cash poor and don’t have much of a budget, don’t throw it all at the Internet thinking it will rain business down upon your head. It won’t. Instead, talk to me or Ron McCoy about low cost/no cost marketing and get in gear making a strong impression in your local market.