Pushing the River
It is sometimes amazing how it lightens one’s load to find out that you weren’t alone in having a particular problem. The downside of course is if one is seeking agreement on having that problem the people they find in agreement with the problem can become a support group for the problem. And that can equal agreement with being a victim. Not really where I am wanting to go with this thought. I’ve written before that from the time the Phoenix market crashed at the end of August last year until March of this year I had to feed my business a bit over $500,000. I didn’t like it but wasn’t really concerned. My wife and I had dinner Friday night with one of the other most successful agents in Arizona (also a couple) and she confided that they were out of pocket just over $300,000 for the same time period. They work a higher price range than we do (their average sale is 550k, mine is 250k) and they didn’t have to start feeding their business until November. We got hit earlier as our price range was instantly effected by the sub-prime meltdown. Well, we went into the black in April and so did they. Not for the year but for the month of April. Home sales in Phoenix were up April 2008 over April 2007. That is the first time that kind of stat has been true for over a year. When you have a really big operation (read: marketing based) you can get a nice rise from a rising market. You can also get a brutally big bump from a falling market. None of this is to suggest that one’s stats are not caused by themselves. But none of us personally pushes the river.
Memorize This
When one’s business is based on prospecting they can turn it around much much faster than if marketing based. Surveys are the key to stats. That is such an important concept that if you were to memorize it and learn to teach it to others it would be a good thing. Surveys are the key to stats. When you are marketing or selling anything – if successful – you are delivering a message or making an offer that the public you are trying to reach will respond to. If you are offering the "wrong" thing (they don’t think it is valuable) your efforts won’t be successful. If what you are offering is what they want – success. For example, I am currently promoting "we can sell your home even when others are giving up". In today’s market that is an acceptable message. If I were to have run an ad like that three years ago it would have been absurd. Most cab drivers could have sold a home in the market we had three years ago. So when the phone stops ringing it isn’t that "marketing no longer works", it is the "button" or offer being made isn’t current any longer. When you are talking to someone it is almost instantly obvious if what you are saying "doesn’t survey well with them". You can change your message on the spot. All agents successfully listing and selling homes are quite skilled at doing these "surveys". They just have never thought of what they were doing as gathering survey data. It is faster and easier to change your message if your communication is mostly live. Finding the correct buttons for a marketing campaign takes much longer, not to mention the ad production time.
The Truth Is…
Agents all across the country have taken a beating this last year. And many of them have felt like they were in the wilderness all alone. Most agents don’t have accurate data on what other agents and companies are doing. As most real estate agents tend to present themselves as "I’m really really really successful" – even when they are not – there can sometimes be a very false picture. The agent knows they aren’t doing very well (compared to how they were doing) but doesn’t have that same subjective reality on how the other fellow is doing. I am surprised when I answer someone about my stats and they experience relief that "I was honest". They had been talking to agents who were telling them, "I’m doing great". We all like to think of ourselves as buzzing along like the green line on the graph up top. Truth is almost all of us – when highly successful – have stat graphs that look much more like the red line. Periods of survive, followed by periods of thrive. We make the bulk of our money during the thrive periods, when the stats are moving up. The goal isn’t to have a great year. The goal is to have a great career.
Imagine the Discount Brokerages
If you think traditional Realtors have had it rough imagine what it is like for the discount real estate companies. In my area, with my stats way down (a little over 75 million production in the past 12 months) my group outsells all of the Help U Sell offices here combined. They have 14 offices (that someone is paying rent on) showing in our MLS and my group does more business than all 14 of them combined – and this is a national company. The small discount companies aren’t even doing that well.
Thrive – Survive – Thrive
Lower commissions aren’t the "thing" now. Results. Can you sell my house? Do what you have to do, learn what you need to learn to be able to convince a seller to price their house correctly, so you can answer that question, "YES", and you too will see that your very best years are yet ahead of you, not behind you. Survive until you can thrive.
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Consumerism, Geo-mapping columnist
Marketing columnist
Russell — thanks for this great perspective. I came into the business in 2003, and thus until last year had only existed in the “thrive” part of the graph. And as you point out, most agents don’t/won’t talk about the reality of the red line on the graph.
Russell, I have been in survival mode for about a year now. It’s times like this I’m glad I work from my home and have low overhead. This too shall pass and the thrive phase will be back. Hopefully sooner than later. These down times are great for working on the business. When business is great we don’t always have the time to work on the business side because we’re too busy listing and selling.
And you are so right about the prospecting. We have to design our prospecting ads to hit peoples hot buttons. And right now that’s being able to get the job done. And that of course is all about pricing.
>> These down times are great for working on the business. When business is great we don’t always have the time to work on the business side because we’re too busy listing and selling.
I agree completely — over the first 4 years of my career I always regretted not having time to define/refine my systems for doing business. The one silver lining of this survive period has been focusing on all of those business processes to improve the way I conduct my business.
Russell;
Great point about the discount brokerages having it MORE tough. The proposition at this point is VALUE, not price. CAN you move my home. DO you have the exposure and experience to help me through this market. NOT can you list my house for X.
It is about marketing, not listing. I am finding our office (1 building) down in production, year over year…but picking up market share.
Russell — Your words were my bowl of Wheaties this morning.
I noted a few things that stood out to me.
1. The discount firms who were crowing so much, and predicting how they were gonna lead the charge to the new paradigm are now ecstatic to have working wives.
2. I was cheering when you said, When one’s business is based on prospecting they can turn it around much much faster then if marketing based.
Those attaching their entire operation to 2.0 etc. should now realize once and for all — prospecting can be your best friend in down times. Also, if Shaw bites the big half million dollar weenie as a marketing based firm, he must be tellin’ the truth.
Folks? Russ is walking, talking truth in the flesh.
3. Surveys are what showed me my latest two marketing targets. Next to my first morning coffee, surveys are the best.
If you happen to be around Heard Museum the next few days look me up, Russ. I’ll be the BalwdGuy.
Bawld Guy!
Your comment (especially #1) just made me crack up big time… it is true, of course…where all good humor comes from..
BTW…I am not gonna be there (@BHBU), but wish I was…
I also subscribe to the theory that you need 1.0 1.5 and 2.0 approach (think Benn wrote about it in a different post I just read….
There is a team in our office who has re-doubled (literally) their prospecting efforts and it is paying off in spades right now.
Best
Eric
Russell I seem to remember Gary Keller saying this at Mega Agent camp last year “The goal isn’t to have a great year. The goal is to have a great career.” It was something that didn’t really mean much to me at the time as our team was still kicking butt and having another great year. Things started to slow with the subprime mess then we got hit with the declining market extra 5% down payment issue and out market came to a halt.
I have been feeding our business for the last few months and it becomes tempting to pull back on the marketing. Have to keep reminding myself that people are still noticing the ads and in the long run they will end up coming back to the market. This will put me in a much stronger position to capture even more market share in the long run.
Eric — Many are learning some dinosaurs survived — AND thrived.
Our bad year was 2006 – we did much better last year and although things are looking bright and we are selling properties, we are recuperating from the “survival mode” – It’s ALL GOOD!! Now I’m going to turn to you for help in how to grow our team (choosing like-minded individuals with similar goals and work ethic is not easy)
@Bawldguy – I don;t know whehter I was nodding my head because I was laughing so hard – OR Laughing so hard because I agreed with your comments so much
@Russell – They say that people have dopplers somewhere in the world – and at least in the sense of a business philosophy, I am yours or you are mine or we are all the Walrus.. koo koo katchoo
Having been to this rodeo before, as you and bawldguy have been, I know that sometimes you just need to hunch down, take the beating and do the best you can as you move through the gauntlet, but this post is a wonderful articulate statement about what it takes to be a real estate professional. As I’m sure you’ve heard, its one of the worst jobs, and best careers in the world.
I love your ” we can sell your home even when others are giving up” – but that’s why you’re still here (AND had the cash to put into your business when you needed it)
“When one’s business is based on prospecting they can turn it around much much faster than if marketing based.”
Isn’t prospecting marketing? When you open your mouth, design the postcard, write the text, deliver the message, in person ot otherwise, you are indeed marketing.
Maybe I am still a little cloudy from my Bloodhound fog…but russ are’nt you still saying that business is marketing based. Maybe from a “real estate” perspective you are utilizing allegory to drive home a point, and if so I clearly understand why…but in the end, isn’t it still basically marketing to get prospects to pick up the phone?
“we can sell your home even when others are giving up”….great tagline, impactful messaging, makes one take notice, unique….it’s marketing.
>Isn’t prospecting marketing?
Yes, but not all marketing is prospecting. I learned that expensive lesson the hard way.
There are TWO ways to get business. If all the various methods were distilled down to TWO types of lead generation those two types would be prospecting or marketing. I am not referring to lead conversion here – just lead generation. Asking for referrals is prospecting. Calling people on the phone is prospecting. I am using the word, “marketing” to indicate that the communication reaching the potential client is not “live communication”. It could be a mailing, a TV or radio ad. A billboard, etc. All advertising would fall under the marketing category but PR would also fall under the marketing category.
Almost all large companies use marketing. Examples would be Wal-Mart, Sears, General Motors – these companies are not cold calling or door knocking to get their phones to ring. Sales people working in the stores may be, but the companies get the word out via marketing.
Russell..as you know I’m all about marketing. I am trying to wrap my arms around what you are saying.
I am getting from you that agents need to concentrate on the “live communication” aspect of marketing. Is that what you are saying?
@Barry;
Actually marketing, by definition is positioning a product or service for delivery to the marketplace as opposed to prospecting which is actually an activity designed to request business from a consumer. Prospecting can be part of the marketing mix, but is not in and of itself marketing.
Maybe a good analogy here would be the difference between strategy and tactics. Strategy is what generals plan to win a war, tactics are what sarge and the guys use to win battles. Prospecting is one tactic in an overall marketing strategy.
Not to speak for Russell, but as I understand his point , he changed his tactics (increasing his proactive efforts to reach consumers) to achieve his overall strategy (increasing his business to positively affect his bottom line).
I have always drawn the distinction between prospecting and marketing as this:
Prospecting is going out and directly finding people to do business with. (Relatively free, but time consuming.)
Marketing is putting yourself out there and hoping that people will come to you. (More money than time involved.)
Bill…my main business and pedigree if you will has been marketing. It’s been my professional course since donning the cap at graduation. I am a marketer who is working in the real estate industry not a real estate industry person doing some marketing.
I have to respectfully disagree with your analogy. Marketing is the umbrella under which all components of communication with a consumer is governed.
Aren’t we just mincing words here? I mean plain and simple prospecting is marketing. Why do so many in real estate try to diffrentiate it out like it’s bad to simply realize it’s a “form” of marketing.
Mariana what you are doing is describing is the symbiotic relationship between advertising and marketing. Moreso what Mariana is describing prospecting as is Direct marketing.
Advertising is “putting yourself out there and hoping that people will come to you”
Direct..or Response Marketing would be “going out and directly finding people to do business with”
Both advertising and DRM fall under the umbrella of marketing.
I think there is so much banter going on within the real estate industry that common business practices are being muddied by some defining aspects of business as they choose.
I now understand what Russell is saying which was my main question.
He is talking about direct marketing to the consumer rather than advertising. He is seeking a one-on-one connection.
I grew up in Connecticut and we used to have a company that sold door to door..the Fuller Brush Company. Talk about prospecting, these guys were the best.
Barry – As another who grew up in various aspects of marketing, I tend to agree with you….it’s all under the umbrella of marketing, whether direct personal interaction, or simply putting a hook into the proverbial waters. The distinction is important, but we simply splitting semantical hairs….
Wow Rich…are you sure you want to be agreeing with me so soon after being announced as the newest AG contributor..LOL
I believe that if you read again the first two paragraphs of Bill’s comments you will have the correct viewpoint on this. Obviously, all actions that get business are “good”, so we are not talking about the goodness or effectiveness of any particular action – just defining terms.
Effective marketing is getting the consumer to think of you or your product in a certain way – owning shelf space in their mind, if you will. Although it can be accomplished by talking to someone one on one, that isn’t possible for a national company when they want to reach millions of people. So they market to those people. So when referring to marketing I am really not talking about calling people or stopping by to talk to them – for me that falls into the prospecting category.
This isn’t to argue about words but to clarify thinking. If there is confusion on these particular terms it will make it impossible to take the discussion further as we won’t be communicating. If one wants or has “a job”, then it makes no difference what they think those words mean. If they intend to “have a business” (continues to make money if you are there or not) then it becomes vital that one correctly grasp the distinct meanings here. Not just “a meaning” but to have a *suitable* definition for both of those terms. In the long run it is necessary to have a marketing based operation (unless your goal is to run a boiler room) if one is going to have a “big business”. It just isn’t physically possible to wind up doing hundreds and hundreds of transactions if the only way of getting business is prospecting or asking for referrals.
I remember the Fuller Brush Man. Their door knocking was their marketing. Avon’s marketing was to brand their prospecting with “Avon Calling”.
In one master planned community here, one agent in particular has been door knocking since 1987. in a reader’s poll, he was voted the #1 recognizable business in the community. Most of the 20k in the community have met him face to face. His prospecting is his marketing.
The flip side is the call I got from someone relocating from Scottsdale last Friday. I asked him if he had a hired a listing agent yet. He said no, but that he knows several. I asked him if he knew Russell Shaw and he literally roared with laughter and then quoted Russ’ commercial. He said everyone in Phoenix knows who Russell Shaw is.
Now that’s some serious branding Russell has and should be emulated!
Russell, great post.
Barry,
If the fish likes your bait you have great marketing. If the fish bites the hook consider yourself prospecting…
I like BB have a home office, which means low overhead, which I am very thankful for.
We have had our larger franchises here close offices and consolidate.
Interestingly our local limited service rep company has been going gangbusters. He has tons of listings. Maybe since we in Oregon weren’t “hit” like other parts of the country our limited rep guy is holding his own.