Real estate agents have many decisions to make when it comes to marketing their businesses, but sadly, a lot of the same bad marketing investments are made over and over again. Most of the time, agents blindly invest in marketing activities that everyone else is doing without giving thought to whether or not their return on investment (ROI) will come. Marketing success metrics, paired with genuine feedback from real estate customers, paint a vivid picture: real estate agents continue to invest in low-ROI marketing programs.
So what’s wrong? The number one reason real estate agents make bad marketing investments is because they’re trying to reach the wrong audience.
How Consumers Actually Think
Without a good understanding of how your consumers think, it’s hard to imagine that your marketing will yield successful results. This year’s National Association of Realtors’ 2014 Home Buyer and Seller Generational Trends report sheds a lot of light on consumer behaviors that significantly impact the success of your marketing.
The biggest takeaway from this report is the breakdown of how consumers find their agents. Bernice Ross did a wonderful write up for Inman News on this and makes a striking point:
“With all the noise around prospecting using websites, social media and other online resources, the one factor that really makes the difference is a referral from a trusted resource or face-to-face contact. This is true for buyers and sellers from all age categories.”
It’s important to note that while cold prospecting from social media and websites might not be as lucrative an option to get brand-new leads, those channels are still expected to be alive and active. Case in point: consumers will “stalk” you online once they learn your name, and you had better be established there when they do.
How People Find Their Selling Agents
As a real estate agent, you already know that word of mouth is the best way to win new listings. So why continue to invest in activities that don’t help you build up your word-of-mouth marketing reach?
According to the 2014 NAR report, the most lucrative channels aren’t newspaper ads, direct mail or website ads. No, it clearly says that 71% of all closed seller transactions resulted from trusted sources or face-to-face contact:
- 39% found their listing agent through a friend, neighbor or relative
- 25% used the agent they had previously used to list or buy a home
- 4% came from referrals from other real estate agents or brokers
- 3% came through an employer or relocation company
If you’re spending money on marketing to unknown people and not to those listed in the categories above, you can pretty much guarantee that you’re missing the mark. You need to market to those people in a way that helps keep you top of mind so you can increase your repeat and referral business. We can help with that too.
How People Find Their Buying Agents
It’s clear that people find their buying agents in an almost identical fashion. As it turns out, 68% of all closed buyer leads came from a trusted source or face-to-face contact:
- 42% came from the agent’s sphere of influence
- 12% had used their agent on a previous transaction
- 6% met at an open house
- 4% were referred by another agent
- 4% were referred by a relocation company
All of these face-to-face and trusted interactions are deeply rooted in familiarity. When someone sees a static direct mail piece with a name and a face on it, they’ll never know the real you. You need to have a marketing strategy focused on building relationships with clients, even after doing business with them. We can help with that as well.
What It All Means
If you’re continually spending your marketing dollars on channels that don’t prompt referrals or face-to-face interactions, you’re throwing your money away. The trends from NAR are clear: new business comes from word-of-mouth relationships from trusted connections. That’s why your marketing should focus on staying in touch with past clients and friends, not trying to reach new audiences who don’t know who you are.
And if you need help with this, OutboundEngine can automate this process for you to help you stay top of mind with the people who matter most in helping your business grow.
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