Are you feeling stuck with what you should be doing to generate more real estate business? One set of gurus is telling you to prospect until the cows come home where other set it telling you to do the complete opposite and it leaves you feeling confused as to which is more important?
What is marketing? What is the difference between marketing and advertising?
As a Realtor and small business owner (YES you are), you need to know the difference and the truth is you should probably be doing both. In this article, I want to point out the difference between marketing and advertising and how they BOTH are crucial to building your real estate business long term.
Real estate “marketing” is anything you do to keep your brand on top of mind. It’s your ongoing story of how your brand relates and interacts with others. It’s what you do to keep your brand in front of your audience so you are not forgotten about. It’s things like your branding on your signage and business cards to your monthly direct mail or email communication with your existing database. I like thinking of marketing activities as something you do consistently to stay top of mind with your database.
The reason for this is very simple.
“If you aren’t marketing your database, then someone else is”
Your largest source of business will come from people you already know. It’s a fact that over 60% of business comes from referrals(51%) and Repeat business (12%). This means people choose to work with agents they already know, like, trust, but more importantly REMEMBER. Only about 13% of consumers use the same agent again, but over 70% say they would use the same agent again post closing so what happens?
Agents tend to lose touch with their clients after closing, which ends up costing them the repeat business in addition to a source of referrals over the course of time.
You create real estate marketing activities to nurture the relationship you have with your audience (SOI and past clients). Marketing should be all about maintaining and generating attention around your brand. Real estate marketing activities are not meant to generate a lead, they are meant to generate awareness!
What Is Marketing? Direct Mail To Database “Don’t Forget I Exist”
The first marketing campaign you can easily run and automate is a direct mail campaign to your entire database. Instead of farming a bunch of strangers, why wouldn’t you farm your relationships first? The thing I love about direct mail is that everyone gets it. Even if the recipient throws it in the trash within 1 minute of seeing it, they still make a mental acknowledgment of your existence.
The question you should ask yourself is if you had 100-200 people on your direct mail list that you sent one piece to a month for one year straight, would you be more memorable than if you didn’t? None of this is theory either because statistically, because out of this list, 10-15% of them will be moving and 100% will know at least one person they can refer you to.
You can also check out this podcast on Direct Mail Farming, but apply the concept to your own database instead of a zip code.
What Is Marketing? Email To Database… “Don’t Forget I Exist”
Another channel you can use to stay in front of your database would be a consistent email campaign, but one geared at staying in touch with your rolodex of relationships and past clients. The goal is not to generate a lead, but more so to stay in touch.
The key is in the type of content that you send. I’m not talking about sending just listed emails or anything that related to real estate but something more along the lines of holiday greetings, local events, or happenings that are newsworthy. The same reason you don’t always talk about work with your best friends is the same reason you don’t always talk about work with your database either.
We have found extreme value in using video email to send personalized messages to our database as opposed to salesy ones. They get more opens, responses, and overall is a much better form of communication as video allows you communicate visually in a way traditional email cannot.
What Is Marketing? Blogging … “Don’t Forget I Exist”
Blogging would also be considered a real estate marketing activity. The content I create on my website is meant to drive traffic and build my authority as an agent. I create it to build trust with my audience. It also gives me a reason to keep my brand in front of them so I’m not forgotten. People who read my content are more likely to be attracted to working with me as it allows me to showcase my expertise with complete strangers without sounding like a narcissist.
This is the same reason I am writing this post. I may find some agents who need to hire a dude, but I was found through the content I created and not through some kind of direct response advertisement. I can also use the content I create to market my database no differently than you would market yours. The concept is all the same regardless of what type of business you are in.
You create content to generate buzz around your brand which can then be used to be put in front of your database and local community.
What Is Marketing? Video Creation … “Don’t Forget I Exist”
Creating videos is another form of content that would fall in the marketing side of things. We create fun neighborhood videos like you see above to serve as an excuse to remind our database what we do for a living, but also create new relationships with people we have not previously met. . I can host these videos on my You Tube page and then optimize them to try to attract new clients. I can also post on my site, blog, and social media sites to multi-purpose them for further brand and authority building.
Marketing is all about maintaining and creating attention around your brand that doesn’t necessarily involve a lead generating activity.
What Is Marketing? Real Estate Advertising Activities
So now lets talk about real estate advertising activities. Real estate advertising activities tend to have a goal of generating direct business or a lead. These are things we do to create “NOW” business.
If you are running ads any kinds of lead capture ads, buying any kinds of leads or online placement, or targeting direct “prospects” with direct response type of campaigns, I would then classify this as advertising because you are looking to generate an action directly as a result of your advertisement.
Pay Per Click ads would also be considered an advertising activity. You are buying placement at the top of Google search results to generate a lead.
Zillow is an advertisement activity. You are paying a monthly fee to generate leads directly.
Anything you pay for in exchange for a direct lead is considered an advertising activity.
Real estate marketing is all about attracting business while real estate advertising is all about creating business.
The key is what you do with the “leads” once they come in. There are many ways to make your phone ring, but what you do once it does is the difference between an agent who can turn an ROI on their advertising activities to one who’s losing money. Especially in the online space, most “leads” are far out from taking action, so how do you get them to convert? This is where the marketing side of things come into play.
Your ongoing “marketing” campaigns are what keep you in front of the leads while at the same time humanizing your brand. Your marketing plan would look more like the image you see below. The key is not scaling into too many advertising campaigns until they are profitable. Focus on turning a positive ROI in one at a time and then scale on up. My personal goal in advertising is to extend the reach of my audience vs the reach of my leads, because I know it’s just a matter of time until people move.
“72% of them close with the first agent they meet with”
I want to be the first once they think of. The model looks something like this.
So, Which One Is Better?
You should have both working in your business at all times for the following reasons.
Marketing campaigns keep your brand at the forefront and nurture your relationships. If you don’t build a brand amongst your SOI, then you’ll always just be a sales person chasing a bunch of leads. Building and maintaining a database isn;t optional, it’s mandatory because in real estate over 60% of all agent business is directly attributed to referrals and repeat business. You don’t get referrals and repeat clients from complete strangers, you get them from the relationships you have established in life.
If you consistently stay in touch with every person you have a relationship with, you’ll have a better chance of getting their direct business when they are ready to make a move. If you had 100 people you stayed in touch with consistently, about 15 of them are moving this year. Do they remember what you do?
More importantly 100% of the people you know, knows someone who is moving this year. If you consistently keep your brand in front of them, how many referrals could you generate?
This is why you may want to look into implementing a real estate marketing strategy into your business.
What Is Marketing? But, What About Advertising?
Advertising on the other hand is necessary because you should always be looking for NOW business. Each new client you convert out of your advertising efforts can turn into a referral source and repeat client.
Yes, you also get to sell them a house too, but that’s being very short sighted. Staying in touch with your clients before, during, and after their transaction will nurture the relationship to become extremely profitable down the road as they refer you clients and return for repeat business. You cannot quantify the lifetime value of a client because the average person buys 3-5 properties over their lifetime. They also ave the ability to refer you at least 1 client a year.
However whichever way you want to dice it up , in this business, the one with the most relationships tends to be the one who does the most business.