The Ten Day MBA for Real Estate: Marketing and Consumer Analysis
This is part two of a series of posts based on the book The Ten Day MBA by Steven Silbiger.
Chapter One of The Ten Day MBA is about Marketing. More specifically, it's about targeting your marketing -- you won't really find much here about specific strategies (though if that's what you're looking for, hit me up and let's discuss!). It's more about creating a foundation on which to base your marketing decisions so that you know (a.) who you're talking to and (b.) what to say to them.
The chapter is outlined with a seven part "Marketing Strategy Process." The steps are as follows:
Review of the Competition and Self
Review of the Distribution Channels
Development of a "Preliminary" Marketing Mix
Evaluation of the Economics
Revision and Extension of Steps 1-6 Until a Consistent Plan Emerges
I'll look at each of the sections, tell you what Silbiger has to say, then hopefully talk through how it can apply to your real estate business and marketing needs. If you are reading along, definitely hit me up in the comments and let me know what you gleaned as well.
This is the foundation of your marketing efforts. Silbiger identifies a number of questions to help identify the market you are trying to reach.
What is the need category?
Who is buying and who is using the product?
What is the buying process?
Is what I'm selling a high- or low-involvement product?
How can I segment the market?
Let's look at these one by one.
What is the need category? Who needs us and why?
Although Silbiger talks about this in terms of a product and buyer, as real estate pros we are offering a service to both buyers and sellers.
Who is buying and who is using the product?
This is an interesting distinction to make, and has many variables when it comes to real estate. In many cases, your client is not the person who is "using" the product. Here are some different scenarios:
Buyer buying as primary residence (Buyer and User = same)
Buyer buying as investment (User = renter)
Buyer buying for ex-spouse, child, other (User = occupant)
Buyer buying as vacation home / seasonal rental (User = varies)
Seller selling primary residence
Seller selling single investment property
Seller selling investment portfolio
Seller selling inherited property
Seller selling vacation home / seasonal rental
Note that on the sell side, the seller's use of the property may differ from that of potential buyers'. For example, an investor may sell a property that the buyer will in turn use for a primary residence.
From there, Silbiger enters on an examination of the buying process, which can create the opportunity to identify places where potential clients can be identified and marketed to. The process he outlines is Awareness > Information Search > Evaluate Alternatives > Purchase > Evaluate.
The point of Awareness is, of course, reaching the potential client when first realizing that he or she has a need for the service you provide. Reaching a client at this earliest point means that although you will have a longer process, you have the advantage of selling to the potential client before they have started hearing from or seeing other real estate agents marketing their services.
In order to reach the client at this earliest stage, you will either be trying to predict behavior or drive behavior.
Companies that use predictive analytics seek to help real estate agents by combing social media and online signals for indicators that might predict that they will be purchasing or selling real estate. These might include engagements, marriages, pregnancy announcements, job searches, promotions, or retirements. Any or all of these can indicate the potential for a home purchase, sale, or other change.
Home buying behavior can often be driven through educational opportunities like First Time Homebuyer workshops, Rebuilding Your Credit seminars, or Real Estate Investing classes. The idea is to reach those who think of their home purchase as a far-off goal and help them implement strategies to move their timeline forward.
Building Awareness for home selling has traditionally been the foundation of the "Find out what your home is worth" landing pages that encourage those just beginning to consider selling their home by helping them put a real number to their home's potential.
This can also be accomplished by building brand awareness through Circle Prospecting a specific neighborhood consistently, so that when a homeowner there sells, they think of you first. The key, of course, is consistent marketing over a long period of time.
Reaching real estate clients during the Information Search phase is probably where most marketing happens. This is where you will see those expensive Zillow ads, paid Facebook ads, paid lead-gen products, or old-school door-knocking and cold-calling.
The timeline is often fairly narrow, as you need to reach the potential client after he or she has identified the need, but before they've reached out to another agent. The advantage of reaching potential clients during this stage, however, is that they are warmer and more motivated than they would be during the Awareness stage, thus conversion may be significantly higher.
The Evaluate Alternatives stage can make or break your ability to actually work with the client. The idea for you is to ensure that your follow up has been convincing enough and that you have provided enough information to help them choose you, rather than one of your competitors. If you are reaching this stage and not being chosen, you need to take a look at conversion.
Do you have a great listing presentation?
Are you getting an in-person meeting or are you trying to convert by phone or email?
Are you presenting yourself in a way that works for your market, niche, or your client expectations?
The Purchase stage comes once you've signed the client and are in the process of working with them on their sale or purchase. The selling mechanism at that point is offering extraordinary service and making sure you are communicating effectively. While you have already sold the client for this transaction, everything you do should be with the idea in mind of selling them on your services for their next transaction, as well as turning them into a referral partner. You need to be so good that they can't resist telling friends and family about you.
The Evaluate stage comes post-purchase or sale, when the client has closed on the property and is looking back at the process, including your performance. This is where so many agents fail, I think, to continue selling the client. This is also where the potential for referrals and repeat business is greatest.
In order to ensure excellent evaluation and on-going top-of-mind connection with a past client, do the following:
Follow closing with a hand-written note, thanking the client for their business and assuring them of your continued desire to serve them and their sphere.
Ensure that the client is moved from your active database to a follow-up for ongoing communications, whether that is an email list, holiday card list, or other outreach.
Consider creating a quarterly or annual cookout or other event and invite past clients to it. It's a great way to stay a part of their lives.
This is also the time to create marketing initiatives on social media or as part of your circle prospecting outreach. For a purchase, let the neighbors know that you have other buyers interested in their neighborhood. For a sale, let the neighbors know that you recently sold a home in their area. Be sure to get a client release signed for your files so that you can include a photo from the closing in your social media feed as well.
Creating Your Client Avatar
When asked who their ideal potential client is, many real estate agents and brokers respond: Anybody! It is difficult to contemplate narrowing your potential client base, especially when you feel like you don't currently have enough clients to pay the bills or when you are embarking on a marketing plan to increase the number of transactions you close each year.
But failure to identify your ideal client can result in marketing initiatives that are ineffective. After all, if you're talking to everyone, you're really not talking to anyone. The best marketing involves crafting a message and delivering it in a way that feels personal and deeply connected.
Because we are talking about real estate, there are many things to think about in terms of ensuring that while your marketing should be targeted, it shouldn't be exclusionary. While you are crafting your ideal client, you don't want to do it in such a way that it leaves people out or discriminates.
Here are some possible ways to segment your market for more effective marketing initiatives, branding, and messaging:
Demographic Segmentation looks at issues like age sex, income, marital status, family life cycle, education, and occupation to create marketing initiatives that are appealing. This could drive social media marketing by influencing the platforms most likely to appeal to your ideal client. It can help you determine what topics to cover in your blog. It can help you choose what color scheme to use in images on your website or Instagram feed. In addition, it plays a role in helping you determine what neighborhoods or micro-markets you are interested in focusing on.
Psychographic Segmentation looks at lifestyle and personality traits to help attract clients with whom you might be effective. It can also help you determine what clients you might not work well with. Activities, interests, political opinions, and other elements can help you create a snapshot of the type of person who you gel with and for whom you might be most effective.
Behavioral Segmentation looks at purchase behaviors in order to help you market effectively. Usage, occasion, loyalty, and price sensitivity are just a few of the ways that behavioral segmentation can inform your marketing. For example, if you sell homes in a resort area, you may want to develop marketing aimed at clients who are on vacation, since many of them may be tempted to purchase after falling in love with the area during their visit.
In addition, brand loyalty can help you understand how to reach potential clients, since the image of their favored brands can then inform your own image. For example, those who are loyal to iPhones may be different from Android users. Those who love Target are different from those who love Wal-Mart.
Once you have looked at these various factors, you can begin to develop a Client Avatar. This is a sample profile of your ideal client, suitable for helping you develop content for social media, blogs, and advertisements. For example, you might create something like the following for a DC-area client:
First-time homebuyer, 25-35 years old
College Educated, Master's degree (UVA)
Works in federal government or consulting
Married; one child
Household Income $80-120K
Favorite Stores: Target, Carter's, Madewell
Interests: College Football (Season Tickets to UVA), Book Club
Again, you're not limiting your marketing to this ideal client, but you are using it to create an image in your mind and to help you answer questions like:
Where would this person go for information about the home buying process?
What type of information is he or she looking for?
What type of photo would appeal to this person, and thus should accompany my blog post?
Would he or she want to read this article I'm about to retweet?
What neighborhoods would he or she be interested in? What features of those neighborhoods should I highlight in a Facebook Live video?
That gives you a sense of the Consumer Analysis section of The Ten Day MBA. Next up is Market Analysis. I hope you'll join me as we continue through chapter one in our virtual book club. Be sure and let me know your thoughts in the comments.