Relax your shoulders and pull your head slightly back. Close your eyes slightly and consider the following scenario: You are solely responsible for the sales of one-off products. Although you may have a dozen (or more) instances of products that fit into the same general category, each product you sell is unique. Your products combine practicality with aspiration, and are parts of your customers’ lives for years, sometimes even decades. Indeed, these products represent the single most important purchase most of your customers will ever make.
(I know you already know what I’m talking about but please just stay with me for a little longer, there’s a question I’d like you to answer.)
You are currently in a soft market. By soft, I mean lowest market activity for a decade in some areas of the country. Your particular micro-market is not immune to any of this: unsold inventories of other similar products are up, increasing the amount of time each sits unsold and thus driving down prices. It’s a classic buyers market, and there are buyers, but not as many as there might otherwise be because many potential buyers are also sellers who already own a similar product that they themselves can’t sell.
Given all of the considerations above, and independent of your relative experience selling these products, would you:
- Identify a few likely buyer profiles and start focusing messaging to them, emphasizing the particular benefits and features of this unique product? Or would you
- Take a blanket approach and ensure that this product is appearing under relevant categories in as many lists as possible, and be more vague in your messaging so as to not exclude anyone?
I suppose the real question I have is, why is it that real estate agents, and the companies they work under, don’t engage in marketing? Why is it that, with all the tools available in the form of audience targeting and product segmentation, the real estate industry simply lists their inventories and hangs out a sign or 2 instead of actively finding new owners for them? When will the industry realize that the game has changed, so the strategies and tactics employed to win the game must change as well?
It’s not for lack of tools. Besides porn, no other industry took to the Internet as early in the game as real estate. When other industries were dithering about the best format for a web site (online brochure was an old favorite) real estate went right for the jugular, adding new spice to listings by including photos and floorplans. Just like porn. Yet, while sometimes the two industries do, in fact come together (if you’ll excuse the expression), porn has continued forward, very effectively exploiting the full benefits of interactivity – sorting, defining content by genres and sub-genres, and encouraging 2-way communications, to say nothing of e-commerce – to bring focus to it’s multi-faceted offerings. Real estate, on the other hand, continues to behave as though classified listings are still the only way to go, clinging to standard definitions of properties and hoping that the right buyer will somehow happen onto the right property, and select it from a pile of other like (but less worthy) options.
As we can all see from the headlines, it doesn’t work that way anymore. Thus, while Debbie may have done Dallas, so far the real estate industry hasn’t. Or, for that matter, Chicago. Or Detroit, Denver, Phoenix, Portland…
Show It To Me, Baby
Having been a creative at an ad agency in NYC that specialized in supporting commercial and residential real estate companies, I have seen how real estate professionals in arguably the most competitive market in the US (if not the world) responded to the various boom and bust cycles of commercial leasing as well as the “rollercoaster up” of residential rentals and sales. I was there when the Internet first appeared on the scene, giving agents and brokers their first shiny new presentation toy in decades. I saw how newspapers were flat-footed by the shift in ad dollars from print to online. I witnessed the first 360-degree virtual tours made available on the Internet. They were not created for The Smithsonian or the Museum of Modern Art. They were made for high-end apartments in New York’s Upper East Side.
Real estate – like porn – saw early on the value of showing “the product” to prospective customers on a no-obligations basis, in the comfort (and privacy) of their own homes and offices. But real estate – unlike porn – has stopped pushing the envelope. Specifically:
- Real estate companies continue to invest in collateral, but the collateral is not distributed except at the point of sale. Think about that: the 2-dimensional leave behind is given after the potential buyer has already experienced the 3-dimensional product, after the “I like it / I don’t like it” decision has already been made.
- Real estate companies still categorize properties by number bedrooms/bathrooms, which was created by newspapers because that was the only way they could reasonably handle organizing data in a 2-dimensional medium without the ability to reshuffle. Yes, they offer additional narrow-by fields (price and neighborhood) but this just imposes more 2-D thinking on a 3-D product.
- In the same vein, real estate companies list in “all the search engines”, but they don’t differentiate between them. When in doubt, a real estate company “just lists harder” not smarter “because it’s just as cost effective for you to be everywhere” (two actual quotes made straight-faced by a bona-fide real estate agent).
- Real estate companies don’t maintain databases of buyers and sellers for push programs. Real estate agents meet thousands of individuals and families a year, but only have have a sign-in sheet for data collection. How do you start a relationship when you don’t even get a first and last name?
- Real estate companies tell their agents to believe that anyone and everyone could be a buyer. Out of fear of exclusion they don’t profile and target the most likely buyer for any given property. Can you name one other industry where this is the case?
- Real estate companies place emphasis on the agent, not on the property. Tour your town and gauge the percentage of “for sale” signs that have an agent’s name and number, but no details about the property itself.
Real estate professionals do speak of their “marketing strategies” but when one takes a look at their methods there’s nary a drop of marketing to be found therein. In the real estate market we all are in (historically bad, according to one reasonably respectable source) it is the aggressive, savvy marketers who will succeed. Replace “real estate” with any other industry and the same holds true.
In spite of what is promised or believed by real estate professionals, they do not actually market their properties, they list them. They do the exact same things to sell properties that they did in the days before the Internet, regardless of whether the market is booming or not: listings in various search resources (formerly newspapers not search engines), a sign in front, and the odd open house. Since a real estate agent does not get paid unless they effect a transaction, one would think that they would adopt proper marketing strategies and creative tactics using the latest tools to bring that payday forward. Instead, they continue to make the same mistakes:
- Real estate agents focus their market research on comparable sales, which are predicated on relative configuration and price. This is not invalid since that is the basis that banks use to determine if an agreed-upon price is too rich, and thus if a mortgage will be written. But an agent has other considerations beyond the bank, so they need to have a wider focus. If an agent focused on “who” bought the comp properties, and compiled that information they would have some view of who else would buy the same type of place in the same general neighborhood.
- Some real estate agents love to produce charts on current market conditions, on the number of clicks your listing received on their web site, the number of times your property was included in a search, etc. Look carefully at the charts and statistics the agent presents: do they provide any information that supports the agent’s strategy for selling your property? If a statistic doesn’t provide any indication of what the agent should do to get the property moving, then the statistic is worthless. As David Brent from the UK version of The Office said, “Statistics are like a lamppost for a drunk man: better for leaning on than illumination.”
- The real estate agent will tell you (solemnly) that price is the most important consideration in a real estate transaction. They will tell you something like, “In this market the property needs to be well-priced.” Duh. To be well-priced is the same as to not be stupid. Because all units on the market (even 2-bedroom / 2-bath condos) are unique to some extent, price is relative. Without the right buyer the price is never right. This is not the chicken/egg conundrum; the buyer comes first, then it’s up to the seller to not be stupid.
- Staging is something that the real estate agent will emphasize. As painful as it is, he/she is right: neutering the property to a certain extent to help the buyer see themselves quickly in the space is a valid part of the overall strategy. The key for the seller is not to indulge the real estate agent’s latent interior designer complex. Agents want to redecorate your house on your dime under the aegis of making it sell faster. Use your judgment to not let this get out of hand.
As you have probably figured out, I am currently a seller. But my observations and approaches aren’t motivated by frustration. We don’t need to sell; we’re doing it more out of nervous energy than an outside event that is forcing a life change. For my wife (a brilliant marketer) and I, selling is something we want to do, but we also view it as an exercise we can observe from a little bit of a distance. Since it doesn’t have to have a specific outcome it’s more than a game but less than a mission-critical event. We haven’t even bothered looking at something else to move into; why fall in love with the next place when we don’t know how the sale of our place will play out.
Our real estate agent even complimented us for not looking yet. Now that I think about it, that might have been an indication that we have not contracted with the right person for the job…