Creating a Marketing Plan for Your Real Estate Business

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.

Lead Generation I: Analog and Digital Marketing

If you are a Help-U-Sell broker, you want to generate leads.  Mostly you want to generate seller leads, but buyer leads are ok too.  You read and you hear about online marketing and lead generation and it sounds wonderful!  You want onboard!  And you wonder how!

I’ve been working on this for awhile and I have seen some great successes.  I’ve also seen some failures.  I think we get into trouble with online marketing for two reasons:  lack of budget and not doing the groundwork first.  You see, that marketing that we did before the Internet matured into a viable marketing vehicle – the mailers and postcards and CIs and Arounds and signs signs signs – didn’t go away.  They are still vital.  Online marketing, though essential today, is in addition to those other things we all used to do before the downturn.  As people leap to online marketing, I see them abandoning that real, tangible, local marketing – what I call Analog marketing – and that’s a mistake.

Analog marketing has to do with being physically visible in the target market.  A well located office with great signage is essential Analog marketing.  A billboard is Analog marketing, An EDDM delivered to 5,000 households is Analog marketing. A car wrap is Analog marketing.  Regular and planned contact with your CIs is Analog marketing. Sending postcards to 100 neighbors around a new Coldwell Banker listing is Analog marketing. Having lots of For Sale and Directional signs out is Analog marketing.

And Analog marketing is the first step.  It should be in place before taking on an online, or Digital marketing program.

Listen:  I love my digital life.  I love the fact that I can hold a device in my hand that makes a Star Trek communicator look old fashioned, that beams a signal into space and beams it back so that I can be instantly connected with anyone on the planet.  I love that, without even pushing buttons, by simply speaking to Google, I can access the sum total of human knowledge, to learn new things, figure stuff out and get answers on the fly.  I love that we have an inexpensive electronic marketing mega-tool that enables us to be in front of consumers in our local marketplaces and across the country.

But unless you have done the Analog steps of becoming visible in the local market, your attempts at Digital marketing will be less effective.

So, part one of lead generation is . . . back to basics.

It is doing a comprehensive Market Analysis – really doing it – looking at today’s real turnover rates around the area and choosing your target market(s) from those neighborhoods with highest turnover.

It is setting up systems that happen automatically every day in the office:  the EDDM that goes out every month or six weeks, Brag Cards and Arounds, regular contact with CIs, budgeting for a car wrap and maybe a billboard.

It is creating a budget for all of this Analog marketing that is treated like your office rent:  you’ll plan to have the expense no matter what’s going on in your business (because marketing is what drives your business).

Once that blanket of Analog visibility is laid down and functioning in the marketplace, it will be time to add in the Digital.

By the way, here are some metrics to guide you in setting up the Analog portion of your marketing program:

  • You want a Target Market of between 12,000 and 20,000 households.  The size will be determined by turnover rates (lower = more households) and your budget.
  • You should look for neighborhoods where Turnover rates are 4% per year or higher.  Anything under 3% per year can be a problem.
  • Your total marketing budget (Analog and Digital) should be between 7% and 10% of your anticipated annual Gross Commission Income.  If you plan to Gross $250,000, you should be spending between $1,500 and $2,000 per month.
  • Roughly ⅔ of your marketing budget should be Analog, devoted to being physically visible in your target market(s).  ⅓ should be devoted to Digital marketing.  It costs less, so you spend less.

Next up:  What is Digital marketing? And how to go about making it work for you.