A Tale of Two Niches
As the real estate market took a turn for the worse in 2007, foreclosure filings across the country spiked heavily and like mushrooms after the rain, REO brokerages appeared on the scene almost overnight. The new contingent of hastily put together firms joined the handful of brokers that had been selling bank owned foreclosures for decades. It reminded me of out of state roofing contractors flocking to the shore just hit by a hurricane. But as it turned out, experience did not make much of a difference – Even the noobs were pushing out the door anywhere from 20-60 properties a month, every month. What had been a relatively dormant niche, was now the place to be.
During the same time, seasoned real estate agents that had made a great living by listing and selling in a particular neighborhood or part of town, found themselves trapped in the quicksand of immobile inventories and no alternatives. They could still list with the best of them but for a while there it seemed like all buyers had evaporated in the shadow of a bursting bubble. Working what pipelines they could manage to put together, they either squeaked by waiting for the returning tide, got second jobs to supplement their income or simply fled the business.
Story behind the stories
The two tales above share a common reason for being: Both businesses were based on a single profit center model. Do one thing and do it well. Specialize in an area and become the expert – is the mantra we often hear. But this lack of diversification, makes your business very susceptible to market movements. It is akin to having all your money invested into the stock of a single company: If they flourish you are set for awhile but if they faulter, they’ll take you down with them. But this is your business we are talking about here, not Las Vegas. That REO broker can count on continuous business for another year on the optimistic side. Afterwards, that gravy train ain’t showing up to the station. By the same token, what happened in the past few years is bound to happen again in the future and neighborhood agents can’t let themselves be caught by the same trap yet again.
RASREB 2: Think Multiple Profit Centers
In order to have a successful real estate business long term, it must generate revenues from multiple profit centers.
Think about this for a second: Coca-Cola arguably makes the most successful soft drink in the history of the product. Why do you suppose they have Sprite, Fanta, Dasani in addition to their flagship product? In addition to supplying market demand for alternative flavors, they are effectively hedging against the possibility that their main product might become obsolete or undesirable as some point. The sales of alternative drinks pale in comparison to Coke. However, the Coca-Cola company is much stronger because of them. I often hear agents mumble statements that start with: I don’t do ______ or Working with _______ is not worth the effort or even Dealing with ________ is beneath me. Ninety nine percent of the time, those statements come from a place of ignorance. Case and point: About four years ago my wife kept trying to suggest that we should start working with HUD owned foreclosures only to be turned down by me. I told her HUDs were too complicated, not worth the effort etc etc. Thank God she finally succeeded. They were not complicated and in these past four years that profit center alone has accounted for over 30% of our total revenues. So before you dismiss a niche that could make you thousands, do your homework.
In the first part of the Running a Successful Real Estate Business series, I showed you how to trim the fat and kill overhead to succeed in real estate. Ideas without implementation are a waste of cranium RAM. So here’s some specific actions you can take to add profit centers to your business to enable it to survive and thrive the ebbs and flows of moody markets.
Adding a foreclosure component
I can already see your eyes rolling in the back of your head and hear your sighs. Foreclosures can be a pain – if you don’t know what you are doing. If you do take the time to educate yourself about bank REOs, HUDs or short sales you might find that once the right expectations are set in there can be some structure to this niche. And there’s definitely money to be made. Remember, the goal here is not to become an agent that exclusively does foreclosures – you are just adding this component to the mix of what you are doing already. If not, you can join the ranks of those agents to supply me and others with clients because “their agent didn’t handle foreclosures”. Your choice.
Don’t take the poison pill of strict specialization
If you are an Exclusive Buyer’s Agent or Exclusive Lister, it might benefit you to dip your toe on the other side as well. Buyers Only Agents: Keep handling your buyers but start taking some listings from time to time. And i’m not talking about handling any listings that fall on your lap either. Seek out listings, market for them and earn the business. Or add a partner agent that handles that for you. You will find that not only will you see added revenues from the newly added profit center, but you will also add steam to whatever you are currently doing. Same thing for listers.
Diversification of marketing methods
Some of us take pride in never using any “old methods” of marketing – We don’t doorknock, cold call, direct mail, print marketing etc. We constantly boast that this medium is dead or that medium is obsolete. On the other side, old schoolers hide behind statements that social media is a “waste of time”, blogging is not for me and internet prospects don’t work. No matter which side you are on, my advice is: Try something different and you might be surprised. Those cheesy letters you despise so much might just turn into listings and that blog post you reluctantly wrote might start bringing you real clients.
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.
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.
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.
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.
7 simple tips to boost your customer loyalty online
(BUSINESS MARKETING) Without a brick-and-mortar store, building rapport and customer loyalty can be a challenge, but you can still build customer loyalty online.
With many businesses – both big and small – operating online, there are less opportunities for building those face-to-face relationships that exist in brick and mortar stores. According to smallbizgenius, 65% of the company’s revenue comes from existing customers.
It’s important to keep in mind the different tactics at your disposal for increasing customer loyalty. Noupe recently released a list of actionable tips for increasing this loyalty. Let’s examine these ideas and expand on the best.
- Keep your promises – Stay true to what you’ve agreed to, obviously contractually, but stay true to your company values as well. Even if you feel you’ve built a good loyalty where there is room to take a step back, don’t rest on your laurels and be sure to remain consistent. If you’ve provided a good experience, keep that going. The only change that should happen is in it getting better.
- Stay in communication – In addition to the ever-so-vital social media platforms, consider creating an email newsletter to stay in touch with your customers. Finding ways to have them keep you in mind should be at the front of your mind. By reaching out and being friendly, this will help retain their business.
- Be flexible with payments – No, don’t sell yourself short, but consider installment plans for pricier items or services. This will help customers feel more at ease when their wallet’s health is at stake.
- Reward programs – Consider allowing customers to accrue loyalty points in exchange for a freebie. The old punch card method is still an incredibly popular concept, and is a great way to keep people coming back. The cost associated with giving something away for free will be minimal in comparison to loyalty you receive in order for the customer to get to that point. Make sure that what a customer is putting in is about equal to what they’re getting out of it (i.e. don’t have a customer spend $100 in order to get $1 off their next purchase). If all of this proves successful, this can eventually be expanded by creating VIP levels.
- Prioritize customer service – A first impression is everything. By prioritizing customer service, you can help shape the narrative of the customer and how they view your business. This splinters off into them giving good word of mouth recommendations to friends and family. Be sure to keep positive customer service as the forefront of your mind, as giving a bad review is just as easy – or even easier – as giving a good review.
- Value feedback – Allow customers a space to provide their feedback, either on your website or on social media. Find out what brought them to you and gage how their experience was. Be sure to thank them for their feedback and take it into consideration. Feedback – both good and bad – can be vital in helping shape a business.
- Avoid laziness – Stay sharp at all times. Don’t treat all customers as nothing but currency. Include personalized touches wherever you can. This will make all of the difference.
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