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Mourning a Loss & the Agent Value Proposition

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Letting Go

Creative Commons License photo credit: Letting Go of Control


We Withdrew

We temporarily withdrew a listing this week. It had to do with the arrival of a new baby and a septic system (not in that order and, thankfully, not mine). I will spare you the details, but know that the two are unrelated. As I do every time a listing is stalled, canceled entirely, or just too long on the market, I enjoyed my own little moment of silence. I mourned the loss — lost time and lost resources. I mourned a balance sheet now a few thousand dollars lighter and hours upon hours spent sitting open houses and nurturing and attending to my charge, time I will never get back, followed by some brief introspection. Could this have been avoided?

Sometimes it just can’t be avoided. Being a listing agent is capital intensive today. It is capital intensive, that is, if it is done right. This week we also saw homes go into escrow and new listings coming down the pike, but one failure has a tendency to eclipse, even briefly, all of the good. For all of our good intentions, studied counsel, and aggressive marketing, sometimes things just don’t work out.

A real estate agent’s business plan is a little like an actuarial table. Gains and losses, life and death, successes and failures. To look at the parts and not at the whole can make you crazy, particularly when markets behave badly.

Knowing the Unknown

We don’t take listings which we think will not or can not sell. This much should be obvious. Yet, we can’t control external factors and we can’t know the unknown. Sometimes the clients who assure us that they are committed to selling at whatever price the market will bear are not committed at all when that price becomes clear. Sometimes the clients who need to sell don’t need to sell at all; it is more of a want. Wall Street has had a nasty habit lately of failing to check in with me each time things are about to get really ugly, and for all of our good intentions, even when we predict trends, we may not predict the extent of the swings or the speed at which they occur. Mostly we are right, but sometimes we are wrong.

Since the beginning of time, agent fees have been challenged. Today, with the Internet explosion and on the heels the greatest short-term housing price appreciation in history, questioning my pay is so popular that it is on the verge of becoming an Olympic sport. We hear things every day which on the face may sound logical but, considered in the larger context, are quite illogical.

But What If…

“If I have to accept less than I (need, want, expected), will you take less?” Sounds fair, until you consider that I am providing a service, a service which, by the way, costs more to deliver the longer I am engaged and nets less the lower the price at which you sell.

“If you represent me (the seller) and the buyer, will you take less?” Sounds fair, until you consider that you have just proposed that I take a pay cut for doing what you have hired me to do — sell your home. Disincentives are rarely a solid strategy.

“If I allow you to write the offer on your listing, how much will you give me?” Sounds like a valid question, until you consider that my liability, both my legal risk and the risk that one party or the other or both will leave the experience feeling short-changed, increases exponentially when I am a dual agent.

“If my home sells quickly, will you charge less?” Sounds fair, yet until you are willing to pay more when it takes longer, this doesn’t pencil out. And paying me more when it takes me longer to accomplish the mission is just silly, isn’t it?

“Homes are selling for less now, so will you charge less?” Or, “Homes are selling for more now, so will you charge less?” Sounds fair, except that this is the same argument for two conditions on opposing sides of the spectrum, which is inherently illogical. And, while our fees reflect the hard costs of doing business (the ones involving dollar signs and my personal checking withdrawal slip), there are intangible costs whatever the market. In my case, there is more than a decade of experience and hundreds of closed escrows between me and my license issuance, there are several hours a day spent reading and studying and innovating, and there are ceaseless business management and continuing education time commitments, to name a few. Whether your home sells in one week or six months, I have still been on the computer since 5:00 AM this morning (as I am every morning, Sundays and holidays included) reading about my industry and your market.

Serious About Work

Any agent who is a career agent (and we are not talking about the part-time hobbyist here) is in business to make a living and dead serious about their work. Part of running a successful business is considering your costs of doing business and establishing a fee for services which both covers expenses and reflects the value of those services. All businesses have losses. Walmart does, Geico does, and so does the plumber who bids two or three jobs for every one he gets. You may pay the plumber by the hour, you may pay him less when your faucet is easier to replace than his last client’s, but imputed in his hourly rate are his losses. Believe it.

My particular stalled sale was unavoidable. I can’t control a life-cycle any more than I can control an unruly septic system. The client knows this, and when circumstances change, we will live to list again. Yet, moving past the depression stage toward acceptance, I realize that with every failed sale, I really mourn just one thing. It is not the money, and it is not the time. It is the failure to succeed, to delight and to ultimately feel great about what has been accomplished. Because, without raving fans, there really is no value proposition. And our clients are only truly delighted when they succeed.

Unfortunately, sometimes stuff just happens.

Kris Berg is Broker/Owner of San Diego Castles Realty. She is the perpetrator of the San Diego Home Blog, a locally-focused real estate blog, and in her spare time enjoys fencing, luge, and kittens.

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13 Comments

13 Comments

  1. Ginger Wilcox

    September 23, 2008 at 11:11 pm

    Sometimes we can predict when things won’t sell. As good agents, we try to avoid taking on something we can’t complete. I agree wholeheartedly, it is usually not so much the loss of income as the dissatisfaction of not being able to complete the job as we had planned and hoped for.

    With each set back, we always have something to learn.

  2. Gordon Baker

    September 23, 2008 at 11:34 pm

    Kris,
    With each situation you describe, it sounds so familiar. You could have added the other side where you work with a buyer for weeks or months and they say that they’re going to wait and lo and behold… the tax records show they purchased a home not on the MLS (FSBO). But for every bad client, there are more enjoyable ones.. Thank heavens.

  3. steve jenings

    September 24, 2008 at 1:41 am

    Just stumbled across your site very interesting will definitely visit again.

  4. sheilabragg

    September 24, 2008 at 3:55 am

    Mourning a Loss & the Agent Value Proposition: Get out of the feed reader and comment on this article.. https://tinyurl.com/3qdwjc

  5. Rich Jacobson

    September 24, 2008 at 2:09 am

    Kris: I paused in a moment of silence for you just now. No agent is immune from such losses. As much as we may try to the very best of our abilities, there are still aspects outside our realm of control. And it is so true – we may have dozens of success transactions & happy clients, but it’s that one dead-ended deal that consumes our thinking, and spoils our joy (I could tell ya a few septic system horror stories of my own!) Take a moment and write down a list of the last 10 clients you helped achieve success. Remember their joy and gratitude, and press on!

  6. Bill Lublin

    September 24, 2008 at 3:03 am

    I really couldn’t frame what I wanted to say in a more articulate and literary manner –
    I feel your angst – but the temporary postponement of this business event is not a failure to succeed on your part – it is just a postponement. Your sucess or failure is in the totality of your efforts, not just one event – and in your case, that is a pretty impressive total

  7. Ken Brand

    September 24, 2008 at 5:05 am

    Amen.

    Can’t control the outcome, only your own polished actions and communication.

    The keys to success, as you’ve shared, develop your professional policies/boundaries and master how to communicate them firmly, with respect, conversational grace and steely logic.

    Thanks!

  8. Thomas Johnson

    September 24, 2008 at 9:09 am

    Kris: Well said. Unfortunate outcomes put us that much closer to successful ones.

  9. James Bridges

    September 24, 2008 at 9:51 am

    Kris,
    Neat insights and honestly I hope that buyers and sellers read the “But What if..” section. I don’t think people realize that we are here to make a living and although that commission of $7,000, $10,000 or more seems large, they don’t see the expense side of the business so to many of them it’s just like vacation money.

  10. Justin Dibbs

    September 24, 2008 at 10:22 am

    Great post! In fact, I actually say many of the quotes/lines you typed to potential listing clients in the interview. Glad to see that we think alike! Hang in there and good luck with the next one 😉

  11. Missy Caulk

    September 24, 2008 at 6:04 pm

    Yea, I mourn too, I had two fall apart this month, One person walked into her job and found it gone. Another man couldn’t get his money out of China with the financial crisis. Fortunately I got another offer on that one the next day. But I hate it too, on an emotional level.

  12. Toby & Sadie

    September 24, 2008 at 8:17 pm

    I think good agents always are perfectionists and as perfectionists we are always looking to the next deal and keeping eye the “wins vs. losses”. We all want to reach that magical goal of perfection.

  13. Paula Henry

    September 24, 2008 at 8:42 pm

    Kris – It is an emotional turmoil we all feel when we lose one, not for ourselves, not for money, but for our client and our business. It is time invested we will never see again. Love the “what if” section.

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Business Marketing

Video is necessary for your marketing strategy

(BUSINESS MARKETING) As technology and social media move forward, so do marketing opportunities. Now is the time for video content social media marketing!

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As an entrepreneur, you’ve surely heard the phrase “pivot to video” countless times over the last few years. It’s the path a lot of media companies are on, but even brands that aren’t directly talking about this pivot have increased their video production. This shift stems in part from studies showing users spend more time on pages featuring video content. Social media has also played a significant role, and recently, new social platforms have made the pivot to video even more important.

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The promotional angle

One of the primary ways that businesses use video content across platforms is by creating promotional content, which range widely in style, cost, and content, but there are a few strategies that can really help a promotional video succeed.

First, a great promotional video hooks the viewer within the first few seconds. Social media has shrunk everyone’s attention span, so even if your video is on a longer form platform, the beginning has to be powerful. Having a strong start also means that your video will be more flexible, allowing it to gain traction across different platforms.

Audience matters

What you’re promoting – what your business does and who it serves – plays a critical role in what kinds of video content you make and what platforms you use. TikTok is a lot of fun, and it’s playing a growing role in business, but if your entire audience is age 30 and up, there’s not much point in trying to master the form and build a viewership there. You need a sufficient youth-heavy market to make TikTok a worthwhile investment, but Snapchat, which also serves a youth-heavy market, might be a different story.

Even if you don’t intend to make heavy use of Snapchat, the platform recently made a big splash in the video sector by opening up its story tools to other platforms. That means businesses will be able to use Snapchat’s tools on platforms like Facebook and Instagram, where they may already have an audience. It will also make crossover content easier, allowing you to maintain consistent branding across all platforms. You may never download Snapchat proper, but you may soon be using their tools.

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However you choose to approach video content, the fact is that today video is a necessary part of your content marketing strategy. In part this is because, while blogs aren’t going anywhere, and short-form social media is definitely ascendant, both make use of video, but that’s not the only reason. Video is so powerful because it’s deeply personal. It makes your audience feel that much more closely connected with you and your brand, and that alone is enough to change buying patterns.

Another key advantage of video is that, consumers genuinely enjoy well-made videos. Unlike blogs, which most users will typically only seek out if they need information, there are brands out there who are known for their video content. They’ve found a way to hook viewers and make them feel like they have two products: entertainment and whatever it is they actually sell. You, too, can do this with enough creativity and today’s social media tools.

It’s critical that you don’t let your brand fall behind on video right now, because if you even stop for breath, you will be left behind. As TikTok and Snapchat have made clear, video doesn’t stop for anyone. At this point, video isn’t the future of social media or ecommerce – it’s the present.

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Business Marketing

Marketing amidst uncertainty: 3 considerations

(BUSINESS MARKETING) As the end of the COVID tunnel begins to brighten, marketing strategies may shift yet again – here are three thoughts to ponder going into the future.

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The past year has been challenging for businesses, as operations of all sizes and types and around the country have had to modify their marketing practices in order to address the sales barriers created by the pandemic. That being said, things are beginning to look up again and cities are reopening to business as usual.

As a result, companies are looking ahead to Q3 with the awareness they need to pivot their marketing practices yet again. The only question is, how?

Pandemic Pivot 1.0: Q3 2020

When the pandemic disrupted global markets a year ago, companies looked for new ways to reach their clients where they were: At home, even in the case of B2B sales. This was the first major pivot, back when store shelves were empty care of panic shopping, and everyone still thought they would only be home for a few weeks.

How did this transition work? By building out more extensive websites, taking phone orders, and crafting targeted advertising, most companies actually survived the crisis. Some even came out ahead. With this second pivot, however, these companies will have to use what they knew before the pandemic, while making savvy predictions about how a year-long crisis may have changed customer behavior.

Think Brick And Mortar

As much as online businesses played a key role in the pandemic sales landscape, as the months wore on, people became increasingly loyal to local, brick and mortar businesses. As people return to their neighborhood for longer in-person adventures, brands should work on marketing strategies to further increase foot traffic. That may mean continuing to promote in-store safety measures, building a welcoming online presence, and developing community partnerships to benefit from other stores’ customer engagement efforts.

Reach Customers With PPC

Obviously brick and mortar marketing campaigns won’t go far for all-online businesses, but with people staying at home less, online shops may have a harder time driving sales. Luckily, they have other tools at their disposal. That includes PPC marketing, one of the most effective, trackable advertising strategies.

While almost every business already uses some degree of PPC marketing because of its overall value, but one reason it’s such a valuable tool for businesses trying to navigate the changing marketplace is how easy it is to modify. In fact, best practice is to adjust your PPC campaign weekly based on various indicators, which is what made it a powerful tool during the pandemic as well. Now, instead of using a COVID dashboard to track the impact of regulations on ad-driven sales, however, companies can use PPC marketing to see how their advertising efforts are holding up to customers’ rapidly changing shopping habits.

It’s All About The Platforms

When planning an ad campaign, what you say is often not as important as where you say it – a modern twist on “the medium is the message.” Right now, that means paying attention to the many newer platforms carrying innovative ad content, so experiment with placing ads on platforms like TikTok, Reddit, and NextDoor and see what happens.

One advantage of marketing via smaller platforms is that they tend to be less expensive than hubs like Facebook. That being said, they are all seeing substantial traffic, and most saw significant growth during the pandemic. If they don’t yield much in the way of results, losses will be minimal, but given the topical and local targeting various platforms allow for, above and beyond standard PPC targeting, they could be just what your brand needs as it navigates the next set of marketplace transitions.

The last year has been unpredictable for businesses, but Q3 2021 may be the most uncertain yet as everyone attempts to make sense of what normal means now. The phrase “new normal,” overused and awkward as it is, gets to the heart of it: we can pretend we’re returning to our pre-pandemic lives, but very little about the world before us is familiar, so marketing needs a “new normal,” too.

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Business Marketing

Advertising overload: Let’s break it down

(BUSINESS MARKETING) A new study finds that frequent ads are actually more detrimental to a brand’s image than that same brand advertising near offensive content.

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Advertising spread across many billboards in a city square.

If you haven’t noticed, ads are becoming extremely common in places that are extremely hard to ignore—your Instagram feed, for example. Advertising has certainly undergone some scrutiny for things like inappropriate placement and messaging over the years, but it turns out that sheer ad exhaustion is actually more likely to turn people off of associated brands than the aforementioned offensive content.

Marketing Dive published a report on the phenomenon last Tuesday. The report claims that, of all people surveyed, 32% of consumers said that they viewed current social media advertising to be “excessive”; only 10% said that they found advertisements to be “memorable”.

In that same group, 52% of consumers said that excessive ads were likely to affect negatively their perception of a brand, while only 32% said the same of ads appearing next to offensive or inappropriate content.

“Brand safety has become a hot item for many companies as they look to avoid associations with harmful content, but that’s not as significant a concern for consumers, who show an aversion to ad overload in larger numbers,” writes Peter Adams, author of the Marketing Dive report.

This reaction speaks to the sheer pervasiveness of ads in the current market. Certainly, many people are spending more time on their phones—specifically on social media—as a result of the pandemic. However, with 31% and 27% of surveyed people saying they found website ads either “distracting” or “intrusive”, respectively, the “why” doesn’t matter as much as the reaction itself.

It’s worth pointing out that solid ad blockers do exist for desktop website traffic, and most major browsers offer a “reader mode” feature (or add-on) that allows users to read through things like articles and the like without having to worry about dynamic ads distracting them or slowing down their page. This becomes a much more significant issue on mobile devices, especially when ads are so persistent that they impact one’s ability to read content.

Like most industries, advertisers have faced unique challenges during the pandemic. If there’s one major takeaway from the report, it’s this: Ads have to change—largely in terms of their frequency—if brands want to maintain customer retention and loyalty.

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