It’s tough trying to figure out what might be bad marketing investments, especially for real estate agents. That is, it’s tough without having any guidance or statistics to guide you. The long and short of it is this: real estate agents continue to invest in marketing activities that are misguided. However, there is hope, and this post will help you get your marketing headed in the right direction.
I took some time to review a few of the fantastic reports that have been put out by the National Association of Realtors. The 2014 Home Buyer and Seller Generational Trends report and the 2013 Profile of Home Buyers and Sellers shed a lot of light on the ways that buyers and sellers go about finding their agents. More importantly, these reports also go over the efficacy of various marketing forms in terms of actual closed business.
Over the last few weeks, I’ve been writing a lot about this topic. This post is an overview of all the highlights from the previous posts. By the end of this summary, you’ll understand the problem, why the problem exists, how current marketing activities are not worth your money and a five-step plan to help you build a robust marketing engine.
The Number One Reason Real Estate Agents Make Bad Marketing Investments
The number one reason agents make bad marketing investments is that they’re spending money advertising to the wrong people. Paying for SEO placement, taking out an ad on Trulia, launching a neighborhood direct mail piece—all these methods target people who don’t know who you are.
The statistics don’t lie here. 71% of all closed seller transactions and 68% of all closed buyer leads came from trusted sources or face-to-face contact. Heck, it’s even more beneficial to host an open house than it is to launch a direct mail piece. Agents reported that 8% of their closed sales came from open house interactions compared to the less than 2% that came from all forms of direct mail.
Marketing yourself and business to unknown audiences is a huge waste of time. Those people don’t know who you are and when they do need an agent, they’re going to turn to their friends, family and other trusted sources for a recommendation. This means that your marketing dollars should be spent on building up your name within your existing sphere of influence.
3 Worst Marketing Investments Real Estate Agents Make
The aforementioned studies brought to light some compelling statistics on the effectiveness of marketing channels for agents. If consumers rely on their personal networks for finding an agent, then the following marketing investments are of little to no value.
Email “Blasts”
Different from email newsletters and content marketing, email “blasts” simply send useless content in the hopes of generating a new lead from an email list that you may or may not own. Sending bad content into the unknown in the hopes of getting someone to do business with you is no way to approach things. Email “blasts” give email marketing and newsletters a bad name. More on this in a bit.
Websites for Organic Leads
The competitive landscape for websites is enormous and gets even more competitive on the local level. Investing tons of money into a website in the hopes of people searching for you locally is a bad idea. According to the NAR survey, websites accounted for only 4% of sellers who found their listing agent from an Internet search.
Now when someone refers you to a friend, they will almost certainly look you up online, which is why it’s crucial to have an online and mobile presence. But investing tons of money into that website to grow your business does not provide a good return on investment.
Just Sold Cards and Other Direct Mail
When combined, search engines, newspaper ads, yellow pages, mobile apps, direct mail (newsletters, fliers, postcards) and specialty advertising (magnets, calendars, etc.) accounted for less than 2% of closed seller leads. 2%! Every one of those marketing techniques has high cost and low yield written all over it, so steer clear.
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The 5 Steps to Building a Robust Marketing Engine
With the knowledge of who to target with your marketing, and statistics backing up what not to do, I’ve pulled together a 5-step process to make smart marketing investments. You can read parts one and two in their entirety, but here is the shortened version.
Step 1: Market to the Right Audiences
Short and simple, your past clients, friends and current prospects are going to be the largest source for your new leads. Your marketing investments should be spent on building up your name in their minds to bring in referral and repeat business.
Step 2: Multiple Touches Across Many Channels
Be a known and loved name in your contacts’ inboxes. Have a presence on social media. Share things that aren’t about your business but that will help you brand yourself as a trusted expert. Not everyone is ready to buy or sell a home, but you should always build that top-of-mind awareness with your audience.
Step 3: Quality Content Marketing
The worst part about email “blasts” is that they are full of useless content. Automated housing industry reports and mortgage rates by zip code are useful only if you’re actually buying/selling a home. Good content marketing gives your audience information that they find interesting, helpful and entertaining. You want them to keep reading your emails and social posts, so work to help them, not sell to them.
Step 4: Establish Your Online Presence
A website for the sole purpose of capturing organic leads is expensive and not that effective. But having a mobile optimized online presence is a must for every agent. Your website isn’t a point of differentiation anymore, but when a newly referred prospect Googles your name, you definitely want to provide them with a comprehensive experience.
Step 5: Generate Referral Business
Steps 1–4 provide an excellent foundation for marketing to your sphere of influence. With all these elements in place, you’ll have branded yourself as a trusted advisor among your contacts. You can leverage this trust to help grow your business. In exchange for offering your contacts helpful, insightful content in a non-intrusive way, you will earn the opportunity to directly ask them for referral business.
Bringing It All Together
Real estate agents will continue to invest in marketing programs they’re familiar with, even though they might not have the greatest ROI. However, numbers don’t lie, and the smart money is spent investing in marketing activities that target your existing contact database. Stop wasting money marketing to the wrong people and start building up your presence within your own sphere of influence.
Need help? OutboundEngine can automate this process for you and help you stay top of mind with the people who matter most when it comes to helping your business grow.
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