Is your marketing message getting through to your target audience? Is it as effective as it once was or should be? Probably not and here is why.
The National Association of Realtors reports that they have 1.1 million members and there is no mystery that existing home sales are down significantly. There are simply too many agents chasing too few transactions. Add to that the fact that there have been many forces at work in recent years that are changing the way consumers respond to advertising and marketing messages. We are living in an over communicated world that has consumers tuned out and trusting less. What follows is an outline of the problem and the contributing factors.
Business through the ages:
What follows is a look at how our economic base has changed over the years. It is important to know where we came from to understand where we are today and where we are going.
The Agrarian Age
Farming and livestock formed our early economic base. The land gave us what we needed to feed and shelter ourselves. Trade amongst businesses was very prevalent at this time.
The Industrial Age
In the early part of the 20th Century, we witnessed the Industrial Age. We not only worked the land for food but also started to extract natural resources and raw materials to manufacture products. The challenges that companies faced were based on the productivity of workers and the efficiency of factories. Manual labor and hard work were thought to be the answer to higher output and increased profits.
The Information Age
The latter half of the 20th Century ushered in the beginning of the Information Age. The use of High Technology starts to change the game and the basis for our economic output. The Information Age gave us global companies like Microsoft and Intel and the products they produce enable even the smallest of companies to work smarter and not harder. We have gone from using our hands to using our heads. One of the most valuable assets a technology firm has is the knowledge and intellectual capital of its workers.
The Relationship Age
We are now entering a period where we are starting to understand the power of relationships. It is through human relationships that we are seeing new ways to capture and keep customers. If done properly, you create customers for life. The rapid rise in Social Media sites shows peoples true desire to connect with each other. When you take all of this into consideration, it is clear we are living in a Relationship Age
The following key factors have also brought us to this Relationship Age
The Cocooning trend
Faith Popcorn coined the term Cocooning in the 1980's. This trend sees people socializing less and retreating to their homes more. The trend is commercially significant in that it changes the way we reach out to obtain and retain customers. This trend is also a direct assault on brick and mortar businesses. Some examples of cocooning are working from home, internet home delivery of goods, home theaters, gated communities, surveillance cameras and many other services that allow the consumer to retreat and stay home. The Internet has enabled this trend to continue and further points to the need to embrace new tactics for the Relationship Age.
Mistrust in corporations
Over the last decade, consumers have started to develop mistrust in companies. You only need to think back to the Enron, WorldCom and Cendant scandals, to name a few, to see how we got here. For many corporations, regaining the trust of the consumer has been their primary mission. Mistrust in businesses is at an all time high. A recent survey by the public relations firm Edelman shows that only 44% of Americans said they trusted business as a whole. This is down from 58% in the fall of 2007 and the downward trend continues. Consumers are fed up with the status quo and are not going to take it anymore. Now more than ever, advertising messages are being viewed through skeptical eyes.
Mistrust in leaders
Along with a general mistrust in business is mistrust in public figures and leaders. On an almost daily basis, we see another disgraced Politician, CEO, Religious figure or Celebrity grace the front page of the newspaper. Whom we thought to be solid citizens giving sound advice has become anything but. This has also caused business to rethink how they go about advertising and marketing to new and existing customers.
These factors all lead to the consumers need to have a louder voice in what they buy and how business is transacted. The increasing popularity of consumer review sites is aiding them in protecting one another from unscrupulous businesses. As countries around the world struggle with economic challenges, people are yearning for deeper relationships and more say in the process. People worldwide seek more than material wealth and superficial contacts. They want environmental consciousness, business reform and a deeper level of connection with companies, people and the products and services they provide.
The new forms of communication and technologies developed during the Information Age are changing the game. Our past frustrations with corporate performance, government, health care, education and environmental policy are providing the motivation for a new mindset. Enter the Relationship Age.
From Transactional Marketing to Relationship Marketing
The days of "doing the deal" and hit and run marketing are gone. Social Media tools and online technologies are allowing us to deal with customers on a more personal and cost-effective basis. We now have the technology to deal with each customer on a personal level and if done properly, create an outspoken advocate and a customer for life.
To do this you need to move from the old mindset of being product centric to the new reality of being people centric. It is all about the customer. By putting the customer first and serving their needs, we will back into running better businesses via a stronger brand and deeper relationships with our clients.
In the Information Age, employee's knowledge and intellectual capital were the primary currency for companies to keep their competitive edge. In the Relationship Age, it is the number and depth of connections with the customer that is the primary form of capital. It is a shift from Knowledge Capital to Social Capital. We move from serving companies by getting people to buy as much product or services as possible to serving the customer at the highest level and inducing them to buy and remain loyal to your brand over time.
Slow Sales Cycles
Real estate has one of the slowest sales cycles of any product or service. A typical client only needs your services once every 5 to 7 years at best. This makes staying in close touch with the client, adding value and gaining their referrals more important than in any other sales profession.
A Call for Change
When you take all of these factors into consideration, a change in the way you market your service is needed now more than ever. Change is inevitable and the rate at which our environment changes is getting faster and faster each year. How you adapt to that change will determine your level of success moving forward. You need business and marketing systems that speak to today's economy and demography to remain viable. You cannot employ the same old tired methods and tactics and expect to be successful in today's Relationship
Age.
Meeting the Challenge
Marketing has always been a costly endeavor, however, networking and the effective use of your networks and connections is often overlooked. Networking is the most powerful and professional form of selling when done properly. The rapid rise in social networking tools gives you the ability to learn an incredible amount of information about a contact and market to them in a personal and powerful way. Having a sound relationship management system will allow you to remain viable during the long sales cycles and garner a steady stream of referrals. People do business with and refer those they Know, Like and Trust. You must maintain that level of connection with everyone you know to reap the reward of referrals. By adding value to the lives of others, you will gain the success you deserve. If you want to make money, add value to the lives of others. If you want to make a lot of money, add a LOT of value. I have found that by helping others gain what they need all of my needs are met as well. These are RENA's principals of working in the Relationship Age. It starts with a mindset of giving. You need to give to others with the expectation of getting nothing in return.
Most of the marketing methods used by Realtors today have become common and generic. You need to stand out from the crowd if you expect your message to be heard in today's over communicated society.
Becoming a Commodity
Almost all real estate companies and agents are providing the same general services. When you become generic, the only thing you have left to compete on is price. This is one of the major reasons we have seen the decline in fees agents can charge. The public views real estate services as a generic commodity and are refusing to pay what they used to for the service. There are other factors involved in this as well such as the dramatic increase in average sales prices over a relatively short period. This makes the 6% fee much more significant. The internet has dealt a heavy blow to many other financial services and businesses such as insurance, stock brokerage and travel. It is actually amazing that the real estate industry has held up so well for so long. The fact is, our day is coming. If you want to remain viable, you need to provide unique and valuable services.
Niche and Specialization
One of the best ways to cut down on the amount of competition is to have a niche or area of specialization. If you look at the most successful people in the world, they share a few common traits. They all have great networks; they have top-notch coaches and have a specific niche they fill. Establishing yourself as an expert in a specific area gives you the ability to transmit a unique message and stand out from the crowd. You will also increase the amount of referrals you get from within your industry. Your niche does not necessarily have to be real estate specific, like first time buyers etc, you can specialize in a particular industry or represent a particular demographic.
Advanced Database Marketing
Your database holds the key to your success in building your business and relationships. A good database will allow you to do so much more than have contact information for mailings. By acquiring high value data, that is information on your contacts beyond name and address, you can begin to provide a high level of personalized services. Along with custom tailored marketing, you can also employ my cross endorsement and circle of endorsement strategies. Your database is the lifeblood of your business. Maintaining a database rich in information will put you on the path to creating a saleable business.
Identify Key Professionals
You can market your services to two different groups of people. You can spend a lot of time and money trying to find individuals that need to buy or sell real estate or you can work with other professionals that deal with MANY people that buy and sell on a regular basis. By understanding whom these professionals are and how to connect and add value to their lives, you will ensure you will have a steady stream of referral business in any market. You also need to understand the various roles people in your networks play such as Mavens, Subject Matter Experts and Thought and Opinion Leaders. By identifying these key people, you will find it much easier to broadcast your message and brand.
Become a Connector
As I stated earlier, by adding value to the lives of others, your business will grow to new heights. One way to do this is to connect the people in your database with others that will add value to each other. The average database contains 250 contacts. Within those contacts, there are people that should know each other and can add great value to each other's businesses. It is up to you to identify these connections and bring them together.
Branded Unique Services
Another way to stand out from the crowd is to have unique services you offer that are branded to and associated with your name. This is a process of looking at all of the tasks you do on a regular basis and putting your own unique spin on them. A simple example of this would be holding a new home orientation for buyers. After the close of escrow, have the property inspector join you at the home with the buyers for an orientation of the homes systems. You can use the internet to print out instructions for just about all systems and appliances the property may have. This is an excellent way to present the new home to the buyers and leave a lasting impression of service. There are so many steps throughout a transaction you can apply this thinking.
After Sale Services
Another important tool for operating in the Relationship Age is having strong after sale service programs. The actions you take add value to your client's lives and keep you top of mind for referrals. Things such as sending a repair person in for a few hours of free work for a buyer or rekeying the locks make strong statements about your service and make you stand out. I have a long list of service programs I am happy to share with you, just ask.
Referral and Reward Programs
In order to build a strong referral business you must have programs in place that reward that behavior. Teaching people how to refer you, giving them information they can pass on and rewarding them for their efforts are essential for you growth. I recommend having a "referral kit" that your clients can have readily available to aid in recommending you. The kit should contain you resume or bio, specific verbiage for them to use, references and some gift cards.
Conclusion
The economy and business climate has changed dramatically over the last few years yet most people continue to employ the same tactics and strategies that were created 20 or more years ago. The real estate industry is in dire need of fresh thinking for agents to remain viable in the coming years. Many well-funded enterprises are attempting to replace Realtors and reinvent the industry. This is a small sample of many unique strategies that I have created in my 20 plus years in the real estate business.
I urge you to contact me to learn more about RENA and the services I provide.
About Larry Klapow
Larry Klapow has been a luminary in Bay Area real estate for over 19 years. He has been an influential leader holding every position from top producing agent to President of the largest real estate firm in Northern California throughout his career. Using fresh thinking and creative ideas, he has mentored both individuals and entire offices to amazing success. Currently, Larry is the founder and CRO of RENA Professional Networks Inc. RENA is an innovative company that manages powerful networking teams, produces highly impactful seminars and coaches and mentors business leaders to their highest levels of achievement. Larry is also the author of the book "Effective Networking in the Relationship Age" and a member of the National Speakers Association.
Larry Klapow was the President of Coldwell Banker Residential Brokerage's San Francisco Bay Area Region - incorporating 16 offices and a talented team of more than 1,000 real estate professionals. Prior to being named President in 2007, Larry was the Senior Vice President and Regional Manager of Coldwell Banker Residential Brokerage's San Francisco-Peninsula region, a position that he held from 2001-2007. During his tenure, the San Francisco-Peninsula region's offices earned several outstanding accolades. Most notable was the San Francisco Van Ness office's achievement of number two producing office nationwide. This impressive accolade, combined with countless others, positioned the San Francisco-Peninsula region as one of Coldwell Banker Residential Brokerage's most notable and productive regions in the country.
Prior to serving as Senior Vice President and Regional Manager, Larry was Manager of the company's award-winning Morgan Hill/Gilroy offices. Among Larry's impressive list of managerial accolades: member of the President's Council of Managers (1999-2006) and during his tenure, the Morgan Hill/Gilroy office earned the coveted Premier Office - honoring offices with consistent sales achievement for four consecutive years.
