‘To market to market a big fat hen….’
Or so the nursery rhyme started out, if some of us can remember when, or maybe some of us still read nursery rhymes to our children or grandchildren. Some of us in this industry still seem to practice the fine art of marketing in the same manner as some of our rural friends do very successfully.
Recently I was asked by one of my colleagues how some of the top producers in our industry are able to “take charge of an area.” The pat answer that most broker/manager gurus would give is that you can buy the market, or earn the market (through referrals).
Most practicing registrants choose to fly by the seat of their pants. Many become statistics known as “held licences.” It used to be the 70-30 rule and then the 80-20 rule, now it is more like the 95-5 rule: 95 per cent of most of the real estate business is handled by about five per cent of the registrants. Why?
When answering the query above, I went into an elaborate explanation of either hiring a marketing company if he should choose option 1, or he could retain my services for almost nothing! In my discussions with him, I suggested that based on my years of experience, he should be budgeting about five to seven per cent of his gross commissions on promotion/advertising. If he wished to increase his overall production by 25 per cent a year, he should think of spending at least that and then adjust his thinking for the following two years. I said that to try to attain the volume of his nearest competitors, it would require a three-year business plan overall.
Attempting to overcome, or even come close to a competitor requires a patient, prudent and practical plan. A plan that does not have to be a “quick fix.”
So, if you plan on increasing your business, you have to plan on increasing your advertising/and or your promotional budget by at least five to seven per cent per annum, and review quarterly your successes achieved by increasing your budget.
A well-constructed plan with a system beats “I’m going to take a flyer on this idea.”
The colleague who was consulting with me, by the way, does about 30 to 35 sales a year, specializing in FSBOs. He makes $165,000/annum on an advertising budget of $5,000.
So, knowing what his strengths are, he wanted to branch out into farming, rather than to hit FSBOs all over the area. It made clear sense to both of us. The discussions went further into how and when he would penetrate his specified areas. We decided on once a month, in an area of about 5,000 residents. A combination of flyer/newsletters would be sent out through Canada Post.
The registrant fully recognized the difference between marketing to achieve recognition versus marketing to achieve recognition and credibility.
A recent survey by the National Association of Realtors says, “Forty-one per cent of buyers and sellers cited reputation as the most important factor in agent selection. More than nine out of 10 buyers/sellers, when asked about the desired qualities in an agent, rated three categories as very important: 1) Knowledge of the process of the sale; 2) responsiveness, and 3) knowledge of the market.”
My colleague decided to encompass these points in his mailers, but objected to the idea of following it up with a personal phone call or visitation.
With the Do Not Call Legislation before the federal government, many consumers will opt for the “do not call” option from their phone suppliers. With so many acts governing us, including the Privacy Act, agents who don’t establish a continuous relationship via mail and personal visits may end up on the short end of a large fine!
After I pointed this out, my colleague left a little better armed for the 2000s.
Our discussions ultimately concluded with these makeover ideas:
1. Identify personal strengths and weaknesses.
2. Identify markets and statistics related to those areas.
3. Increase knowledge of the area.
4. Establish credibility.
It is estimated that at least 85 per cent of all real estate professionals do not have a business plan. I believe that many other trainers/managers have had similar frustrations with agents who develop no plan whatsoever.
Quote for the month: “Competence always builds confidence.” – Anonymous
Stan Albert of Re/Max Professionals in