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Real Estate Marketing: Power Up Your Prospecting For 2008 Success Marketing Real Estate Marketing Success Kit | Real Estate Marketing Challenges in 2008 | Power up your Prospecting and Lead Generation | Success Tip from Lou and Stu | What Works...and What Doesn't | Business Plans for Real Estate Agents | Defining your Goals | How do I Find the Best Leads at the Lowest Cost | The Marketing Funnel | Getting there Faster | Be a Visible Asset | Coffee is for Closers... | Summary: takeaways for Marketing Success in 2008 and beyond 2007 was a tough year for real estate industry optimists. Throughout the year, trade publications and mainstream media provided a steady stream of stories about rising inventory, falling home prices and longer sales cycles. The Federal Reserve labeled the situation a "widespread cooling" in residential real estate. However, cooling markets don’t have to mean fewer prospects, slower sales and less income. Changing market conditions can create real opportunities for real estate professionals who plan strategically and apply the right marketing tools. Put down that depressing newspaper and read on… Though the past few years have been characterized by quick sales, rapid price appreciation and record commissions, this prosperous period has had an unexpected downside. Many residential real estate pros enjoying their success began to neglect the marketing and strategic activities that are crucial for long-term success. Today, many agents are reevaluating business plans to meet the challenges of slowing markets, increased competition, and emerging technologies. Real estate agents can make their 2008 marketing plans more effective by considering a few important industry trends: Re-emphasis on hard skills – In a tough market, telling clients about your wonderful service may not be enough. Demonstrating local expertise, marketing plans and negotiation skills will help you win business. Clients don’t want catchy slogans, they want marketing skills to help them buy or sell a home. Creating a practice – Doctors, attorneys and accountants are well-paid professionals who have practices. Experienced, top-flight real estate professionals bring more than just sales skills to the real estate transaction. When people ask about your profession, do you position yourself as a salesperson, or a real estate professional with a practice? Complementary skills to add value – Consumers have become very savvy at finding real estate information on the Web. They are looking for actionable property and neighborhood information that they don’t have to help them make better decisions. Look to provide information to which your clients don’t have easy access. Developing measurable goals – Salespeople may not need marketing plans, but small business owners do. Since most agents are independent contractors who cannot rely on others for strategic planning, setting measurable goals is critical. It’s easy to say "I want to double my income," but how will you get there? Increase your contact list by 500? Close 20 additional transactions? Achieve a 75 percent increase in sales and referrals? Real Estate Marketing Challenges in 2008 With every deal, agents have the opportunity to gain knowledge and improve skills in negotiating, legal and regulatory matters, transactions and client service. On the other hand, many agents find it a challenge to develop marketing strategies because it’s often not part of their day-to-day jobs. Here are some challenges many agents will face in 2008:
Power up your Prospecting and Lead Generation Real estate marketing and lead management has changed dramatically in the past few years. As Web technology advances, people are able to perform more tasks related to buying, selling and homeownership online. Naturally, more real estate marketing activity has moved online to capture these consumers. You might have an extensive real estate background, but not much experience with lead generation and conversion. But unless you’re fortunate enough to work in an office with a proven lead generation/management system, you’ll need to develop these skills to build your real estate practice. Putting aside the larger debate about lead aggregators and which types of leads are good or bad for the industry, the source of leads is an important consideration. Before the Internet, real estate leads came from sources like referrals, cold calling and open houses. They were usually self-generated and each received a personal follow-up. Database and Internet leads may or may not be self-generated. They could originate from your agent website, or be purchased from any number of third-party lead sources. Their quality may vary widely depending on how the lead was captured and other factors. When leads are not generated through your own marketing activities, you must take steps to make them your own:
In a recent interview with Realtor Magazine, eNeighborhoods CEO Stu Siegel was asked about real estate leads. In response, he quoted commentator and football coach Lou Holtz: Some agents talk about the quality of leads as if good leads or bad leads simply exist, and they have little influence in converting them to customers. What we’ve seen is that smart agents have developed ways to systematically manage leads from generation to closing, and the ones who approach it strategically and work at it consistently, achieve powerful results. Today’s marketplace is tough, and successful agents must look for every possible advantage. Regardless of where leads originate, you should make the most of each one with a strategy to turn leads into clients and referrals to build your business. Let’s look at some best practices from top real estate marketers and other marketing pros who have developed some effective strategies for lead conversion success. At eNeighborhoods, we’ve been involved in real estate marketing a long time, and have worked with some of the industry’s most successful producers. We can pass along some lessons from years of database marketing and serving thousands of successful professionals from the world’s top real estate companies. If you’re serious about boosting your lead generation and conversion activities this year, here are some points to keep in mind: Lead conversion is an ongoing process, not a one time event. In marketing, a marriage is better than a one-night stand, so look for ongoing relationships instead of quick closes.
Business Plans for Real Estate Agents One of the best things you can do for your practice is to write a business plan. First, it’s a valuable planning exercise that makes you think through your goals, the obstacles you’ll face, and how you will overcome them. Second, most of your competitors don’t have a business plan, so it can be a real competitive advantage.
Effective marketing for real estate agents involves both short and longer-term goals. In deciding which marketing channels are best for you, always consider these three goals.
So what’s the best use of your marketing dollars? As shown in this chart, - which is an example for illustration only - some channels are better at building visibility and some are better for conversion. The channels on the lower left rank low on both counts, while those on the upper right show effective branding and conversion activities. Just as you need a balance of traditional and online channels, you are likely to be more successful using a combination of brand-building and conversion marketing tools. To see if you have a good handle on your own marketing mix, try mapping your own marketing channels on this chart. If you can, complete the quadrants as of year-end 2007. If you mapped your lead sources for quality and conversion potential this way for every quarter, you would likely see your channels move around a little. Some activities:
How do I Find the Best Leads at the Lowest Cost?
The good news is that optimizing lead conversion is an attainable goal. The bad news is that it requires some time, money and experimentation to optimize your marketing budget. eNeighborhoods has created a simple tool to help agents calculate the return on marketing investment that’s available to our subscribers. This simple spreadsheet tool won’t impress anyone with an MBA from the Wharton School of Business. But if you don’t have a tracking tool, it can be very useful in determining where you’re getting a return on your marketing dollars and where you’re not – and improving those results throughout the year. It’s also easy to use and requires a minimal investment of time each quarter and at year-end. Here on the left side, you have some typical marketing channels. Any activity that brings you prospects, clients and sales should be included here – referrals, direct mail, open houses, Internet leads. The cost of items like yard signs, business cards, and thank you gifts…whatever you do to attract and retain business should also be included. To keep things simple, you might want to just track only hard dollar costs. If you also want to include activities without hard costs that take hours of your time, just enter your estimates using an hourly wage – $50 or $100 per hour, or whatever you feel your time is worth. Remember, the goal is not to measure dollars or hours precisely, but to help you make the most of the limited marketing resources at your disposal. By the way, if you already know your hourly compensation as a real estate professional, congratulations. Considering the hours some agents put in, some of us may not really want to know this figure. There are a few examples here to get you started, but you will want to adjust it to reflect marketing activities for your own practice. Note the column that represents marketing activities for the first quarter of 2007. To keep things manageable, we simply track the number of:
The return on some of these activities may be hard to calculate, which means they should be reviewed – can you tie any sales back to that bus bench ad? This doesn’t necessarily mean hard-to-measure activities should be eliminated. If you’re known for giving your buyers terrific thank-you gifts, that’s not something you want to cut. Now, if you’re familiar with author and motivational guru Stephen Covey, you know one of his success habits is "begin with the end in mind." So, imagine we have arrived at the end of 2008. Let’s take a look at our totals. We know the total number of Prospects and Clients we’ve attracted through our marketing efforts. We know how many dollars we have in annual sales, and we know our annual marketing spend. If you already know these figures for your business, congratulations! You’re already running your business more effectively than the majority of real estate professionals out there. As everyone knows, the bottom line here is ROI, but that’s not the end of the story. If you have followed your spending and results, quarter-by-quarter, you probably have a good idea where to optimize your marketing spending. No one has unlimited time and resources to spend on marketing, so knowing how to optimize these activities can provide a real competitive advantage.
How do you turn all those prospects and leads you’re creating into sales, repeat sales and referrals? If you’re not familiar with the sales funnel – also called a marketing funnel or pipeline - it’s a popular way to organize, track and improve marketing activities. At first glance, it appears that the real selling and closing gets done at the bottom of the funnel, but your business will experience far more long-term success when you learn to fill the top of the funnel. Let’s take a look at what’s involved in each stage and some of the best practices from real estate and other industries on how to build a high-performance program to build sales, referrals and repeat business. Key questions: The NAR estimates 50 percent of consumer emails to real estate professionals are ignored. Ignoring prospects until they are ready to buy or sell can be a costly practice. In a tough market, you can’t wait for selling opportunities to simply appear, or the market controls your earnings. No real estate professional wants his or her earnings to be dependent on changing market conditions. Mastering top-of-the-funnel activities also means that you get better at developing qualified leads. In time, you begin to ask better questions, evaluate prospects better and move more quickly toward the sale. You will also be able to key in on high-return prospects and activities and not waste time on filling your funnel with low-return "suspects." Lots of real estate pros get tripped up in these top layers and prefer to focus further down the funnel. After all, prospecting takes time and resources and it’s disappointing when leads don’t work out. If you don’t take the time to prospect and farm, you miss out on ownership potential. You will be dependent on someone else – brokers, referrals, third-party vendors – for your leads. Since the home selling process takes 9+ months and the buying process takes more than 16 months, you may have to consider a longer time horizon than you’re using in current business practices. When’s the right time to ask for referrals? There is no law that says referrals come only from satisfied clients. If your buyer or seller presentation hits the mark and elicits a strong response from prospects, let them know right then you appreciate referrals and will be happy to provide a personalized presentation to their friends or family members. Provide great service to one prospect and one referral, and you have added two more people to your virtual sales force.
Using the funnel also helps to order and prioritize your tasks. For example, you might set a goal of contacting your A leads weekly and your B leads monthly. It seems obvious, but many real estate pros spend time selling to B leads who are not ready to buy and C leads, who may never be ready. And remember, automate the higher levels of this funnel as much as possible so you can spend your personal time and resources on sales at the bottom. Again, lots of people talk about getting qualified or unqualified leads, but without a systematic approach, you will never know how many can really be converted into new business, repeat business and referrals. A few criteria you can use to qualify are: Motivation – What’s prompting the buy or sell transaction? Does the prospect walk the walk? Expressing interest in buying or selling and taking steps are two different things. Budget – If the prospect can’t afford to buy a house or pay for your services, it’s not an A lead. If buying or selling expectations are unrealistic, it may not be an A lead. Match – Ideally, any potential buyer or seller is your client. In reality, your client base is best built with your specialties…neighborhood expert, waterfront, luxury buyers, condo specialist or e-PRO. Your real estate experience is one thing clients recognize – and the closer it matches their needs, the more willing they are to pay for your expertise. Positioning – Why do people choose a real estate professional? They are looking for local and industry knowledge, ethical conduct and responsiveness. Position yourself as the solution and you will likely get the sale.
Visibility is essential because it doesn’t matter if you are the world’s greatest seller, negotiator or industry expert if no one knows about it. To highlight the importance of visibility in your community, our CEO and our President recently posed for this Real Estate Magazine cover. It was a humorous approach, but an important point. If you already have visibility in your community, you don’t spend your time explaining who you are, and you can focus on meeting prospect’s needs. Many prospects reason that if you have high visibility in the community, you must be good at your job and treat people well. So in many cases, visibility = credibility. An agent’s reputation and knowledge of the local area – what we call being a neighborhood expert - are the two most important factors sellers consider in choosing an agent, according to the National Association of Realtors® 2005 Profile of Home Buyers and Sellers report.
Neighborhood expertise is something that’s easy to demonstrate if you have the right tools. Don’t just tell them - every weapon in your marketing arsenal – CMAs, Buyer Tours, flyers, newsletters or postcards speaks for you when you’re not around. They should show your neighborhood knowledge. Responsiveness – The fact that most people choose the first and only real estate agent they speak with shows that fast response is essential. In terms of expectations, it seems that every time someone does research, consumers expect faster response times. Make it personal - Imagine you have found the love of your life and you’re ready to propose marriage. The moment is too important to use a standard pitch or stock script. You try to make it as personal and meaningful as possible (Hopefully, you don’t need to handle too many objections). Likewise, you don’t want to present clients with cookie-cutter presentations, but you want to have materials ready to go. At eNeighborhoods, we have pre-designed templates so key marketing materials like flyers, CMAs and neighborhood reports can be ready in minutes. Enter a name and address, add some photos and you are ready to pitch. Turn it around - When your competitors are focused on getting something, try giving something away. Take a digital photo of a FSBO home, create a personalized sales flyer or Neighborhood Report and drop it off personally. Introduce yourself and volunteer to answer questions. If the FSBO decides to eventually hire a seller agent – and most do – you can be at the top of the list because you provided something useful instead of just calling and asking for the listing.
In a memorable scene from the Movie Glengarry Glen Ross, a struggling real estate salesman played by Jack Lemmon is told, "Put down that coffee…coffee’s for closers." Here are some of the best closing practices to help ensure you get your share of caffeine and commissions: Don’t close as a salesperson. One of the recurring themes at the 2006 NAR conference in New Orleans was that real estate professionals are practitioners with marketing expertise, not sales people. Doctors, attorneys, accountants have practices, and successful real estate professionals have practices too. So, position yourself to close as a resource, a trusted advisor, not a sales person – people appreciate resources and valuable advice, but they hate being sold. Sell on value. What’s wrong with selling on price? Price is only one part of marketing…if lowering the price is all it took to sell a property, people would not need an agent! Be clear about the value you bring: Higher selling price, faster sale and the least inconvenience. Focus on the skills and experience you have that clients lack. Create a Marketing Planner checklist that shows sellers what you can do to market their home. In the eNeighborhoods CMA, the first item on the checklist is to sign the listing papers. There’s also a checklist item to set a date for an open house. If people like the idea of an open house, they probably like the idea of listing with you! If you are not a strong closer and find it hard to bring this up, get some tools to help you with the close. Don’t just close clients, close referrals. At this stage, top agents think a step beyond closing a client. This is an ideal time to gain referrals from the client’s family, friends and business associates. Referrals are a simple and cost-effective way to grow your business that’s often neglected. In fact, any channel you’re using to generate leads should also be used to build your referral base.
Summary: takeaways for Marketing success in 2008 and beyond:
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