In reading the title, you are probably thinking that I am about to go all Deepak Chopra on you and unleash some infomercial guru wisdom. But I am no guru, nor am I trying to be. I am just an avid student of good business. While in the presence of a successful enterprise, be it a small restaurant, a Mom and Pop print shop or a multi national corporation, I often find myself wondering about what makes them tick. In between CNBC specials on Walmart, Coke or Home Depot, I ponder whether there is a set of principles that they all follow to one degree or another. What I am about to share with you are lessons being learned as we speak in running our own real estate business. And since AgentGenius hosts some of the brightest minds in the real estate landscape, my hope is that in our discussion, my own education in the art of running a business on all cylinders can be furthered as well.
RASREB Series Part 1: It’s what you keep
Most keys to success in any business are very simple, bordering on obvious. So much so that they are often followed with the obligatory “duh”. But as simple as they are, you’d be surprised how many pros do not (can not, will not) follow them. Instead they will do everything in their power to complicate things just so they don’t ever have to cross that ever dreaded line to actually do something. The first key to running a successful real estate business goes a little something like this:
In the real estate business, it’s not what you make, it’s what you keep. Kill all the overhead that’s not necessary to run your business and you will see it flourish and last.
Overhead is the ultimate double edged sword in any business. If kept slim and under control, it gives your revenues room to breathe and grow but if not, it can become cancerous and lead to the eventual demise of the business. When business is good, revenue wise, overhead operates under the radar and goes mostly unnoticed as the business owner is concentrated on counting all the cash coming in. So all the excessive rent space, useless money pits that are some marketing campaigns, and admin employees that are working full time for Facebook are rationalized by the money windfall into the company’s coffers. But when the times get tough and business slows, the business owner gets in a cost cutting mood but it’s often too late as the business bleeds money on a monthly basis.
Get it together
Enough with the generalities – What can you specifically do in 2010 to get your overhead under control?
I know I’m going to raise some eyebrows with this one, but since that’s never stopped me before, here I go. In my opinion, 80-90% of actively practicing real estate agents pay way too much for rent to the tune of 40-50%. They say it has to do with “what their clients” expect of them but that’s pure BS. Most of the clients agents do business with don’t even see the office of the agent. You typically meet Buyers at the property you are going to show them and Sellers at their home. It’s not about the clients’ expectation – it’s about their expectation of themselves. That’s how overhead typically gets rationalized through entitlement mentality: I deserve to have a ______ or I’ve earned the right to drive a ______. The quickest way to put 5-10 grand in your pocket in 2010 is to take a long hard look at your office needs – step outside of yourself for a second and view the situation as a businessperson. Do you really need 2000 SF or could 1200 SF do the job just right? Are you really getting any walk-in traffic in that high rent area or could you move out a little farther and cut your monthly rent significantly? On the flip side, I am not a believer in swapping for a home office. The economics of it make a lot of sense but the logistics doesn’t. As you become more and more successful, you work with more and more people and your probability of running into a weirdo grows. So, keep business and home separate if you can help it.
This is a tough one, since we are constantly bombarded with new and improved ways to market ourselves and our companies. The urge to try the latest and greatest all the time is real and quite frankly, we wouldn’t have found some of the greatest products we leverage today if we hadn’t taken a chance on them first. But that does not mean that you string nonperforming tools and services along every month just because some work and some don’t. Cutting your overhead is about eliminating waste. Give products just enough time to prove themselves but remember that you don’t owe them any loyalty if they don’t respond with performance. One disturbing phenomenon I have noticed in real estate is what I call “defensive spending”. When posed with the question “what do you do to earn your commission”, agents get into a defensive mode that leads to hourly employee thinking. They start offering “marketing services” to Sellers that they know damn well don’t do anything to sell a home but justify it by stating that “although it doesn’t work, Sellers like it”. Newsflash: Wide majority of Sellers, pay for results, not effort. If you spend every waking hour of your day at the Seller’s home trying to sell it but couldn’t, you’re as useless in their eyes as the agent who did nothing and didn’t sell it. Those people that don’t think you are worth the money you earn, will not change their opinion regardless of how much you do. So focus on marketing that produces tangible results and cut what does not work. Depending on what your monthly marketing budget, this could save you from $1200-$5000/year or more.
Have you ever heard a business owner very proudly state they have X number of people working for him/her? I call that headcount ego and I learned to disregard it from The Millionaire Real Estate Agent. Most of the agents featured in that book didn’t have a huge staff – they just had a very efficient one that new their role and executed it perfectly. During boom times it’s easy to get carried away and overhire. Soon, you have positions overlapping and double the amount of people doing half the work. If you are a soloprenuer and thinking about adding an assistant, do so when it’s absolutely necessary. And don’t add to your staff until both you and your assistant are up to here with work. If you already have staff in place, take a look at the structure of your business and look for ways you can have the same people do more or less people do the same amount of work.
Last but not least, whatever you do, don’t become an “If only” agent. This is the pro that constantly states: “If only, I could have enough money to do that huge Adwords or Radio or TV campaign”. What eventually follows is debt and behind the corner from there failure resides. Here’s a simple rule of thumb: If your business has not generated enough money to purchase a marketing campaign that would send it to that next level, it’s not ready to handle that next level. The only thing worse than not having any clients, is having lots of them that think you ‘re an incompetent douche. Take my word for it – Never take on debt to further your business because it will cause the opposite effect more often than not. If you do have business debt, think about a strategy to take care of it and step off the rat wheel.
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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