Marketing is like rowing a boat. When you know how to row properly, the pointed bow moves smoothly forward through the water encountering the least amount of resistance.
Rowing backwards, the square stern of the boat pushes against the water, requiring more effort and increases the risk of having a wave come over the transom (back) and swamping it. Yet most people market backwards, trying to grow their business while pushing against the greatest level of resistance.
Wouldn't you like to market your business so that it moved easily forward?
What's the first thing most people do to increase sales of their products, services? They put together a description of their credentials. Then they pick up the phone, run an ad campaign, send out a brochure and/or build a web site and ask people to buy from them.
Do you know anyone who has used this approach?
Have you tried it yourself?
Were you happy with the number of new clients and customers you attracted?
It's a common misconception that the fastest way to attract more clients and customers is to focus on asking people to buy. It looks like the obvious route, but in most cases it generates only a trickle of new clients for small business owners. It can work if you're a large company with millions of dollars to spend building your brand. Why doesn't this selling approach work for service professionals and small business owners?
A sale is the end point or one of the way points in your relationship with a client. Before they are ready to give you their money prospects need to be confident that you have what they want, and they trust your product or service will deliver on your promises.
When you lead with a focus on selling and your credentials you run into high levels of resistance. It is like trying to row a boat backwards.
Marketing is about building relationships, one by one. Start by focusing on what your prospect wants, not on yourself.
Think about it. When you pick up the phone or encounter a friend, what's one of the first things you say? Do you launch into a monologue about yourself? Most people usually start the conversation with a friendly question or two and then find a topic of mutual interest. If you have information your friend is interested in, you share it.
I often speak with people who say they hate marketing. Why? Trying to convince people to buy feels pushy.
An alternative that is more effective - and more fun - is to focus instead on giving people what they want. Get your prospect's attention by leading with a question or statement that succinctly gets them thinking about how you can solve a "problem" they are experiencing. This is your marketing message or elevator speech, not your sales pitch. Once you have their interest, give them something they want in order to prompt them to contact you. This could be a short report or article.
Does your marketing approach give people what they want? Does it help start a conversation and a relationship?
Once a prospect gives you their contact information, go to work and make good on their trust by showing an interest in their needs and giving them a steady stream of useful tips. The more you give your prospects, the stronger your relationship will be.
Rowing a boat backwards is hard work and won't get you very far. There is just too much resistance. To attract more clients and grow your business stop marketing backwards and pushing against high levels of resistance. Give your prospects what they want, build relationships and you'll find more prospects buying the solutions you provide.
Well, the year is over half way gone, and it is time to assess your production to see if you are on track to achieve your goals. Are you ahead of your goal or are you behind? Is your marketing working for you or do you need to "tweak" the system a bit to get back on track?
I, of course, was fishing last weekend. As many people know, I love Trout fishing and I go out at every opportunity. Of course, with the solitude, I spend a lot of time thinking and I always seem to find some parallel between fishing and marketing.
As I started out the weekend, I went to a stream that I know was stocked with Trout. I know what the stocking schedule is and I know where they stock the stream. On the surface, this should greatly increase my chances for success.
However, I need to factor in more information to ensure my success. For example, how long ago did they stock the stream? How many people have been fishing on the creek? What are the water conditions - is the water high, low, cloudy, the temperature of the water, etc. All of these factors play a role in my potential for success.
Of course, this started me thinking on the parallels between fishing and our business. You see, there are many "tried and true" techniques for marketing to prospective clients, yet some of them seem to work better than others. Even further, some techniques tend to work better during certain times of the year than others while some will work virtually all of the time.
The trick is to figure out what works when and how much time and resources you should dedicate to a technique before moving on to other ideas. The ability to recognize the differences will allow you to maximize your marketing efforts thus maximizing your production and income. Additionally, the more you can "stack the deck" in your favor, the greater success you will enjoy.
The first creek I went to has been very productive for me. I have fished it many times over the years and I know where the fish are, for the most part, located. I work the different locations, varying my presentation, and I more often than not catch fish.
Additionally, one of the tools I use to "stack the deck" in my favor is polarized sunglasses. A pair of glasses may seem rather silly to mention as a "tool", but there is a very good reason to have this tool.
Polarized sunglasses have the effect of doing what I call "turning off the lights". When you have polarized sunglasses on and you look at the stream, virtually all of the glare created by the sunlight on the water is filtered out, allowing you to see down into the water and identifying any fish that are swimming around. This saves you a tremendous amount of time and effort by allowing you to fish where they are located and skipping over the areas where you see no activity. This makes you much more efficient, allowing you to cover a lot more territory and thus giving you more opportunity to catch fish.
Any way, back to the first creek. With my sunglasses on, I could see that there were a lot of fish in the creek, but I could tell by the size of them that they were not Trout. Small bass, Blue Gills, Carp and Chubs abounded, but my quarry, Trout, were no where to be seen. I decided to fish for a bit anyway to see what I could catch. This reminded me of Realtors who use a particular marketing idea because "it always worked for me before".
After fishing for awhile, I caught a bunch of fish, but not one of them was a Trout. This caused me to rethink my choice of streams and go to a different location.
When I went to the next stream, I could see fish that I knew were Trout so I started to fish hard. I ended the day catching several nice size fish and considered it a successful venture.
However, what if I had tunnel vision like so many agents and had stayed at the first creek because "I knew it had worked for me before"? I most likely would have ended the day with nothing to show for it except a lot of time and energy invested with very little production.
What if this is the same "technique" you employ with your marketing efforts. What if you stick with "what worked before" and find that it gives you little to no production? Does this mean that it no longer works?
Of course not! The error wasn't in the idea itself, the mistake was in not analyzing what works when and knowing when to change your strategy. You need to keep track of the different marketing concepts that you use throughout the year and logging what works best at different times of the year.
For example, let's look at advertising in the different periodicals. The Real Estate Book, Homes and Land, you name it. Which months of the year produce the most calls for you? You do keep track of your lead calls and where they come from, don't you?
Looking at your level of calls, would it make more sense for you to cut back on your advertising in these magazines at certain times of the year and focus your advertising dollars on other efforts? Or, are you of the tunnel vision mentality and continue to plow money into efforts that are basically window dressing that will not produce results?
Only you know the answer to this question. You must evaluate your marketing efforts constantly throughout the year to ensure that each dollar spent on marketing returns many times the investment.
Are you a peak sales performer? It seems as though every sales pro thinks they are the best. Nobody else can sell like them, or close like them. But yet, when I press them on exactly what it is that makes up a peak sales producer, they usually say, a strong positive mental attitude, goals and aspirations. It's shocking to see what little knowledge most salespeople have of what it takes to be a top producer.
The Xerox Corporation recently conducted a study to learn what makes a top performer. This study outlined the behavioral differences among salespeople in over twenty-four different industries. They studied over five hundred sales calls. They looked at not only top producing sales performers, but also mediocre and marginal producers as well. They found five different behavior patterns that seemed to characterize the crème from the half and half.
Xerox researchers found that peak sales producers first establish a very balanced dialogue with their prospects and interact like friends. They seem to have an uncanny ability to get their prospects involved as well as help them discover why their product or service would be of value in helping solve their problems. Top producers also realize that proving why the product will be valuable is much better than simply telling the prospect about it. Your prospect will never buy because of what you present. She instead buys from what she convinces herself of. This means that even if you are selling a watch, telling your prospect you will cure his ignorance of time, will not be enough. Your prospect will literally talk to himself to discover that this watch will indeed keep him from running late. He will not listen to you, he will only listen to himself.
The second characteristic of peak performing salespeople is their ability to probe skillfully. These top sales producers are so good at asking questions that they almost always uncover their prospects needs first, before mentioning anything about the product. I'm sure you have found, if you present product benefits or especially the price too soon, the prospect often disqualifies you by giving an objection. But top producers acknowledge and support the prospects comments much better than mediocre performers. They have an uncanny way of using "counseling techniques," to ferret out the prospects true needs. These top performers ask twenty-five percent more open-ended questions than the low performers. Have you ever been contacted by a hard closer? The reason they are pushy is an inability to establish rapport with you. They have not listened to enough of your needs before prescribing a solution. Top salespeople, are so good at probing that they make you think that they know your problem inside and out before they ever recommend a solution.
The third characteristic of peak sales performers, is skill at matching product features to needs. They have learned to uncover real needs and show how the product or service can satisfy it. These peak performers are so good at uncovering needs, they often uncover many. In fact, research has now shown that when two or more needs were uncovered, a sale occurred. Many of us in the sales business have a tendency to present benefits that may not relate to needs. Unfortunately, if you talk your product benefits and features that do not match up to the needs of your prospect, you are inviting objections.
These peak sales performers have a fourth characteristic. They have a highly developed talent at turning a prospect's negative attitude around. These top sales producers have developed an interesting technique of being able to counter objections and a prospect's rejection properly and directly. Do you think that you receive objections when you sell? This is a fairly obvious question. It's like asking if fish can swim. But in studies it was shown that successful sales interactions contain fifty percent more objections than those appointments that resulted in no sale. This indicates people who buy will produce more objections than those who will not. It seems obvious then it's not the prospect who is giving up by saying, "I don't want to". It's more likely you are giving up on the customer. You are quit often before the prospect does. There are actually three ways to answer objections; before it's asked, when it's asked and after it's asked. You obviously know that some prospective customers will give you objections nearly every time you present a product. Knowing when those objections may come will undoubtedly give you a key concept in avoiding those objections by addressing them in the beginning. "Mr. Prospect, some people have even said that this typewriter ribbon does not last as long as other ribbons on the market, but we have found that the high quality of this ribbon allows it to be reused, rather than last longer." If you answer the objection before it is asked, you will cut out a source of problems.
A good time to answer an objection is after it is asked. Undoubtedly, you have received objections in which a prospect said something like, "Well, how much does this cost anyway?" or, "This is way too expensive, I can't afford it." The objection may come at a point where you have not been able to fully give the prospect a sense of value for what he's buying. You might simply say, "I'll get to that on how I can justify the cost in a few minutes.
I once heard a computer sales person in the mid 1980's get an objection from a prospect in the middle of the presentation and said; "I haven't got an air conditioning unit that can support a computer this big in my office." The salesperson promptly said, "I understand your concern and in just a couple of seconds, I will show you why that it won't really be a problem." So rather than let that prospect distract him he was able to thereby circumvent the objection and address it at a later time when it would fit into the presentation more nicely making more sense.
The fifth and last characteristic of peak sales performers is one of knowing how to post close. These top producers have learned to summarize benefits and propose a concise and succinct plan of action when they close. There is a difference between the peak performers and the marginal ones. The poor performers tends to make the sale and lose touch with the customer. This leaves the customer with the sense that he is high and dry with no one to turn to in case something goes wrong. The top performer actually lays a plan of action in helping the prospect understand exactly what will happen in implementing his product or service and the relationship that will start after the purchase. They in effect are saying, "Mr. Prospect, upon buying this product, our relationship is just starting, not ending. The is where long term sales and profits are made.
The Xerox study also showed when this kind of proposed line of action close was used, seventy-five percent of the prospects ending up buying. Your prospect not only wants your product, but he wants to know that the relationship comes with the purchase. Your prospect first buys trust and the rapport. They buy the product benefits second. Now this may change in certain situations. If you are buying a product over the Internet or through direct mail, the relationship may not be as high. But when a prospect says to you, I want to buy your product, he is basically also saying, I trust you, I think a lot of you, I want to spend time with you afterwards. Please support and keep that relationship strong after I buy this product.
Here are some other key items from the Xerox research:
1) The age, sex and experience level of the salesperson do not significantly affect whether the prospect will buy or not. Whether that salesperson was eighteen or eighty, male or female, the prospect was as likely to buy because of these five characteristics as whether that person was thirty, male with ten years experience.
2) The study showed that the ability of the salesperson to recognize cues and buying signals as well as use skillful techniques in controlling the call, were much more beneficial than having the best product.
3) In studying poor producing sales people, it was shown that these marginal performers tend to over structure the call. The biggest mistake they make is to think of a sales call as one in which their prospect only cares about the product. The top performers seem to move smoothly into establishing a dialogue and rapport, thereby maintaining their relationship and controlling the call.
The relationship is always more important than the product. If that were not true then airliners could be sold through direct mail. It was also found that the average sales people tend to pay too little attention to prospect's needs. They often are taught to ask questions but apparently don't listen well enough to the answers or utilize the information received. They concentrate too hard on asking the right questions instead of listening to the responses.
And lastly, the top performing sales people were able to establish a dialogue very easily while subtly controlling the dialogue. They were very alert to buying signals throughout the interview. Often you'll find your prospect showing signals such as leaning forward in their chair, putting a hand on their knee and forearm on their thigh, as well as pupils dilating. On the telephone, buying signals are such as voice modulating up in saying words like, "Really, Sounds good to me, or Great." These top performing sales people are very attuned to buying signals knowing that they've said enough, it's time to close.
I hope these characteristics have given you a better concept of how to sell and how important the relationship of the sale is. It's not enough to just present your ideas, you have to be a psychologist of sorts in knowing how to read the prospect especially in the first few minutes.
The Xerox study found that successful sales call lasts an average of thirty-three minutes. The successful sales person asks the average of 13.6 questions, describes an average of 6.4 product benefits, and lists over 7.7 product features. As you can see that there's a lot more listening done in a sale than presenting the product. The customer on the other hand, usually tells the salesperson about 2.2 different needs, raises 1.4 objections and makes 2.8 statements of acceptance while himself asking 7.7 questions. Yes, you will get objections. But if you find out needs, he will buy and you will sell
If you could analyze the parts of your sales process that are the strongest and weakest, and shore those weaknesses up, selling for you will be as natural as a duck paddling on top of water. You'll be absolutely surprised when someone says, "no." Use these techniques and you will make more sales than you have in a long time.
Recently, a salesperson worked three long months trying to make a high commission sale to a wealthy professional, a doctor. Not only did the salesperson know their product but they also worked hard to develop a trusting relationship. The good doctor was astute enough to focus the salesperson's recommendations on investments property. In the end, his trust in the agent's competence won out. He would become another satisfied source of referrals. In turn, the agent would gain access to a new market rich with professionals possessing needs they could fill.
A month later the agent received a phone call from the good doctor. The client became rude and curt on the telephone. He said he was mis-informed and felt ripped off. He didn't need that much insurance and thought the premiums were excessive. His colleagues told him of group products which he should have evaluated instead. The doctor said he bought too quickly without being properly advised. He shouldn't have bought so soon.
Have you ever faced a situation like this before? Have your clients ever regretted buying from you? We have all had remorseful buyers, but how does remorse progress into a bad client who terminates his relationship with you by letting his product or service be replaced. This may not make much difference if you make a sale expecting never to see the customer or client again. But today, you can't afford that cavalier attitude. Clients need a mortgage every 8 years. They buy a car every 5 years. Your customers will buy an investment every week or month. You can afford to lose a sale. But you can't afford to lose a customer or client. Don't they realize that you really know their needs? Aren't they aware that you read the Wall Street Journal every day and have professional designations telling the world how much you know? The answer lies in how clients could ever become de-sold in the first place.
KEEPING THE SALE
Making a sale takes great skill, but the real benefit comes from keeping a client. The cost of getting a new client is nearly double that of selling to an existing one. Recently, I refinanced a past client to help them tap into their equity in the home. When I asked them if they had heard from the agent who sold them the house (who referred me to them) they replied that they had received a card from her about three years ago but since then, nothing. By this time, even if the agent did call, it would be perceived as a cold call to their own past client. In fact, the property was recently listed for sale, and they hadn't even given a thought to calling the agent who sold them the house.
No wonder business gets replaced. Clients often can't remember why they bought from an agent, and even worse what the agent even did for them.
Possible stages of the selling process:
1) APPROACH SELL DE-SELL 2) RAPPORT 3) PROBE 4) PRESENT 5) CLOSE 6) SALE 7) REMORSE 8) DOUBT 9) FEAR 10) DISTRUST 11) REJECT
LOW TRUST HIGH TRUST LOW TRUST LEVELS OF TRUST
Your prospect goes through many selling stages before they decide to buy. They first gets acquainted with you during the approach or courtship period. They may reject or accept you at that point depending on the strength of the referral. After the first few tenuous minutes, the salesperson tries to reach a sort of similarity with the prospect. Rapport is generated by a close identification with the salesperson's personality. The prospect tries to reach common ground. Their striving to reach similarity, "That salesperson is just like me,-- I enjoy her company." The degree to which you generate rapport will determine the quality of information you receive during the time you probe.
The probing stage of selling is much more important than just determining needs. This phase is also useful in generating a relationship bond. I interviewed computer consultants a few years ago. Most told me what they could offer and what I should allow them to do. But, one told me why he was asking questions and then wrote down every answer without judging any of our inefficiencies. As I answered, I found myself glued to his pad of paper. His style of asking questions about my needs was like putting super glue on our emotions.
The next selling stage is trust. If you show empathy and listen, you'll develop rapport rapidly. Your prospect will listen to your recommendations and sell them selves. Trust comes from confidence in the competence of the abilities and desires of someone else. From trust comes the close. With trust, it is rarely even hard or manipulative. It's simply a culmination of a high-rapport trusting relationship, much like a lover's kiss. The highest level of trust comes during the point at which people buy. This is the primary reason why all referrals should be acquired when someone buys, not afterward.
When the prospect is closed, the sale is over. Or is it? The first phase of de-selling is remorse. If your client isn't serviced properly or is left alone, they may feel remorse. This remorse may not be bad enough to avoid paying the first premium or payment, but they may feel that they could have made a mistake.
Have you ever heard that people buy due to emotion and then justify it by logic? This is certainly more true during the development of a relationship with a salesperson, less true after that. The initial period after your client buys is filled with remorse. It could be your most vulnerable time in losing business to competitors. I bought an insurance policy from a financial planner a few years ago. I hadn't thought about it again until another agent asked me what insurance product I owned. When I told him, he said my company had pool reserves and couldn't continue providing the benefits. I called my planner and asked him if he knew something about the company that he wasn't sharing. The key phrase here is, " I called my planner." Was I a bad client or was I caught off guard during a vulnerable period of remorse? You may not be so lucky. Your client my not bother to call.
The next phase of de-sell is doubt. This step revolves around the motives of the salesperson. "Was he just trying to make money from me? Didn't he care about my family? Was I just an easy mark?" This doubt stems more from a people relationship crisis than a product crisis. The replacement salesperson is fomenting the crisis by playing on the prospect's doubt.
"Didn't your agent tell you that product X was better? You know why? He makes a lot more commission on what he sold you than what you really need. In this case the client isn't comparing products, he is doubting the ethics of the salesperson. The doubt is in the person-to-person relationship, not in the product.
It doesn't take long before doubt gives way to fear. The prospect gets a feeling of impending doom or loss of money. "If I don't get rid of this product, I will be in trouble. Fear occurs anytime after the sale. It doesn't have to be rational. When it occurs, your customer will contemplate rejection of you and then your product. Have you ever been concerned about losing a customer when they don't return phone calls? He won't give you the chance to defend yourself? Is he a bad client? He simply went through a process of de-sell. The de-sell cycle may occur as quickly as the sell cycle. This process is typical of what the North Koreans did to the United States POW's during the Korean War. This same sort of remorse, doubt, fear, distrust and regret cycle is inherent during any brainwashing episode. The product is simply a focal point of attention. Is the client bad or just a victim? Does the salesperson attempt to sell and run, NO! He tries to instill an ongoing sense of trust through a long term relationship. "Stick with me as your partner, and I'll make you money.
The most obvious way to avoid a de-sell is to keep in contact with your client. Since the client bought the relationship first and the product second, he needs a good relationship maintained. I have never heard a prospect yet say, "Gee, I'd rather buy a relationship based product (like a car, financial products, house) through the mail than from a real flesh and blood human being." Your prospect also believed there would be a continuing relationship with you when he bought the product. If your doctor saw you once but never again it wouldn't be long before you'd use other doctors. The same is true of your clients. Don't let your clients become orphans. Keep in contact.
Just sending birthday cards or even a regular newsletter will do wonders in ensuring their loyalty. Then, when you do call, you'll find not only a receptive source of referrals, but also a ready market of new business. Are clients who replace their products or services bad or just responding to neglect?
There are FOUR basic areas in which most of your client's objections about you and your products fall: 1) confusion, 2) doubt, 3) product weakness, and 4) low trust. When your client is confused about what the product can do, he opens himself up to criticism by competitors. Does your client know what he is buying? If not educate him. It's true that many clients will buy whatever you recommend, but you may face de-sell if you aren't there to defend the product.
When your clients are in doubt, they don't believe the claims you've made about the products. They need more information to satisfy questions about the product's capabilities. Recently, while in the midst of selling me a life insurance product, an agent handed me a Wall Street Journal article explaining how built up cash values of policies would be protected from taxes. How he spotted my doubt, I don't know, but he sold me more insurance because he did.
If your client feels the product is weak, he's displaying a concern about it satisfying his needs. He may be aware of a product's pitfalls because a competitor pointed them out. It is up to you to go in and re-establish his needs and goals that both of you initially discussed. Then, show the client how the product truly meets his goals or upgrade him to a better product or service.
Low trust is the most critical area of client objections. Trust revolves around the client's reliance on your competency to solve his problems. It also focuses on how well he identifies with you. People tend to trust others who are most like them. They distrust those who seem dissimilar. The longer you avoid contact with your client, the more dissimilar you become. If the replacing salesperson is able to convince your client that the product was sold because of high commissions, you're sunk. Trust will be lost.
Bad clients don't just happen to good salespeople. They are made. It's not easy for a replacing salesperson to get through the barrier of a happy satisfied client. But, if you lose contact, your client will gradually de-sell himself often aided by your competition. Selling is hard enough. Selling after your client has gone through de-sell is like a divorced couple getting remarried.
The relationship between you and your clients can be tenuous or a gold mine. It can be a source of referrals or misery. It all depends on how you nurture the relationship. The sell starts when your client buys not when you first make contact. The de-sell may start at the same time if you ignore you client.
One of the most under appreciated principles in marketing is the power of marketing leverage. In my estimation there is no where else you can create as much leverage than in your marketing.
For example, when you purchase a piece of real estate you can use leverage. You can put a small amount of your own money down, borrow the rest and create a reasonably good return on investment.
Let's say, for example, you put $5,000 down and sell the property a year later for a $10,000 profit. That's a 200% return on investment.
Not bad.
But let's take a look at the leverage we can create with marketing. Let's say you are running an advertisement every month that is costing you $400 per month resulting in 12 leads a month which turns into one closed loan with the average income of $2000. That's a 4X or 400% return on investment in a matter of a month or two.
But here is where the real leverage can occur...
By simply testing different copy you should be able to improve the results of that ad over time. That means, you can get more leads and more closed loans without spending a single extra dollar.
So for instance, with better copy or a better offer let's say you increase the response rate of your ad to 18 leads and 1.5 closed loans per month. You are still spending the same $400 per month but now your income is $3000 or a 650% return on investment. (Really, that's an extra $1000 at no cost which is an ROI of infinity.)
Now, let's assume that you have a great follow up program and you are working the leads you get for referrals. Imagine if you could get an additional six prospects from your 18 leads and you close the same ratio. That now translates to 24 leads and $4,000 in income, resulting in a return on investment of 900% WITHOUT SPENDING ONE ADDITIONAL DOLLAR IN MARKETING!
Where else can you get that kind of leverage on your money? By following this simple principle, you can put your business on automatic and create exponential growth.
As far as I'm concerned, good marketing is the best investment of them all.
Attention ALL Realtors: Knowing The Difference Between Proactive and Passive Marketing Techniques Can Save Your Business!
Recently I met with an agent who works for a large, well known real estate company. As with Realtors in this market, he was struggling to close a decent amount of business. Being that as a part of my service to you is that I work as a marketing consultant, I offered to review his business and see if I could see any areas that he could improve in order to generate more business.
After a few minutes of reviewing is marketing strategies, I saw right away what his problem was. He was relying too heavily on passive marketing, and it was draining his business.
Do you know what the difference between "proactive" and "passive" marketing?
Let's briefly see how Merriam-Webster's Dictionary defines the two words:
Proactive: acting in anticipation of future problems, needs, or changes.
Passive: existing or occurring without being active, open, or direct.
It basically boils down to the amount of control you have in the situation. Proactive marketing strategies force you to find the prospects that you are looking for.
Passive marketing strategies causes you to sit back and wait for the prospects to come to you.
From my personal experience, it seems that far too many Realtors are relying on passive methods for generating business. As an end result they are struggling.
Examples of passive marketing campaigns:
-putting a vanity classified ad in the newspaper -your company provided website -sending a mailing campaign to your database without asking for a call to action -buying a Yellow Pages ad
Now there is nothing wrong with these methods. You will get a trickle of business from people who need your services right now.
But these methods should be the first step and not the last one. By being proactive, you squeeze many more prospects from the same amount of marketing dollars.
If you are on a tight budget, you MUST be using proactive marketing strategies. Yes, they are a little more complicated to set up, but you get much more bang for your marketing buck.
Here is an example to crystallize my point:
You are in desperate need of some new business. So you follow your manager's advice and place an ad in the real estate section of the newspaper. It costs you $100 of your marketing budget and it results in one new loan. Sounds great, right? With the commissions you earned on this transaction you probably made five to ten times your investment back. Great, right?
Now let's see what a real estate professional using proactive marketing strategies handles the same situation. This agent also places a classified ad in the paper and also invests the $100. But here is where the proactive and passive strategies differ. In his ad, he lets readers know that if they are interested in purchasing their own home in the next three years, they can go to his website to download a free report on the best ways to make it happen.
The loan officers also gets one new loan from someone that is looking to purchase a home this month, but he also got 50 people to download the free report.
Here is why this is important. Those fifty prospects are automatically placed in his email follow-up system. Without him lifting a single finger, he is going to send those prospects emails a few days later, two weeks later, a month later and so forth. He is going to build rapport with them and provide them with the information they need. By doing so, this next year he will turn 5 of those prospects into new clients.
So which is the better way? Turning $100 of your marketing dollars into one closing, or turning that same $100 into six new loans this year plus placing fifty people into your marketing pipeline who may do business with you in the future or who may recommend you to their friends, family and co-workers?
Consider this: what if the second agent ran that ad every week? What if he also placed identical ads in the smaller newspapers in his area? What about advertising in the Home For Sale magazines? You get the picture.
Yes, proactive marketing strategies are a bit more complicated and do take more time to set up. But look at the results!
So if you are like many real estate professionals and are in need of increasing your commission checks without increasing your marketing budget, then you need to be looking at proactive marketing methods to make it happen. In addition to providing you a continuous flow of ready to act clients, it will put your business on automatic so that it will continue to grow regardless of whether you are in the office or sitting on the beach soaking up rays!
Have you calculated your e-factor? Do you even know what an e-factor is?
Not knowing this important phrase may be costing you THOUSANDS of dollars in lost commissions. You need to step back, re-examine what you are doing and begin to plan your path to success.
So, what is an e-factor? It's a fancy conjugation advertisers use to identify emotion factors, those things that drive people to make decisions, regardless of what the decision is, whether to let the salesperson in the door in the first place, or whether it's to make a purchase at the end of the process.
Conceptually, most marketing is push marketing. It's sort of marketing by brute force and it's designed to shove products, services, sales people, and appointments down people's throats. In many cases it comes across as begging, in some cases it comes across as pushy, and in all cases it comes across very "salesy". Magnetic marketing is all about attraction; letting the prospect have the sense, the feeling, that he is seeking out the Realtor and often that allows a different type of selling, a different type of relationship, where the Realtor is really viewed as an expert.
One of the best examples that I know to illustrate this is the "marketing guru" who shares the story that he will cheerfully pay 500 bucks in cash to anybody who can tell him of a time when they received any kind of cold call from a cardiologist. It just doesn't happen. All cardiologist's marketing is magnetic marketing, not push marketing, and therefore, it allows for a sales process that is diagnostic plus prescriptive with virtually zero resistance, price or otherwise. At the end of the examination and the diagnosis when the cardiologist tells you you've got to get in and they've got to replace a tube, your questions pretty much have to do with how soon can you get in, not how much or gee, my brother-in-law's a cardiologist and so on.
These are none of the things that sales people deal with in normal sales environments. But, the reason it's that way at the end is because of the way it was structured at the beginning. So, magnetic marketing definitionally is about using media, systems, processes to attract ideally qualified prospects to you, who view you as an expert with solutions to their problems so that you get to sell in a competitive vacuum.
If you want control over the process, that battles won or lost, I believe, in the very first square on the marketing game board. It is determined by whether the prospect perceives that you are chasing them or the prospect perceives that they are choosing and seeking you out. Therefore, control of that perception then controls everything else from there on out, and those who figure out how to do that real well find the rest of their process gets easier and easier and easier, and their sales production rises because they're only spending face-to-face time with people who are predisposed to do business with them in a competitive vacuum.
You begin by offering information of value or perceived value, precisely matched with the interests of the decision maker whom you wish to attract. Simple translation is you create the right bait and if you have the right bait for the right fish, you've got the right bait for the right animal. You focus on not advertising your product, not advertising your company, not advertising your services, not advertising your technology, but on advertising and marketing only the bait to attract precisely the right creature to respond. Now, you begin this communication with this person who has raised his hand appropriately and through that communication you establish your problem solution set up, you establish the generic solution to the problem, you establish your specific solution to the problem, and you establish the expertise of you as the sales person, who is ultimately going to get face to face with this person, and you create an environment where the prospect is going to make the first move to call or otherwise respond to request the appointment, which usually is couched in some way as an appointment or an examination or a complimentary consultation, or something that has intrinsic value in and of itself.
A pure lead generation ad, or a pure lead generation broadcast fax, or email or whatever is very much akin to a personals ad. If you've never run them, but go look at them you'll see that the structure of a personals ad is incredibly simple. It is a description of who the person wants to respond, who the person does not want to respond, and an incentive for response, in this case it's typically implied, but still it's there. So a personals ad may read divorced, white female, age 35 seeks single male 28-52, must like horseback riding, be nonsmoker, own boat, father own liquor store, etc. It's who they want and who they don't want.
Translated into marketing, for example in the financial planning industry, an ad like that might be: Attention individuals with incomes no less than $300,000 a year to $542,612 a year with children who will reach college age in the next three to five years, we have incredibly important information you should have blah, blah.....please do not respond to this ad if you are um, um, um... and then call for free recorded message or fax back this form or whatever. You can see how this format translates really into any environment.
There's fundamentally no difference between the objective of the marketing plans of the "big boys" and you as a Realtor. Just remember this: businesses don't buy anything; people buy things. The check has to be signed by somebody, and the purchase order has to be signed by somebody, and that's a human being with flesh, blood, and so forth. You can learn a lot that you can use on a smaller scale from the million dollar ad campaigns that are run.
First, think of yourself. What motivates you to buy all of the things that you purchase? Unless you are an alien, the emotions you experience are very similar to the buying public that you are looking to connect with. You need to design your advertising campaign around satisfying these needs, wants and desires. Stop telling everyone how great you are, how many millions of dollars you sell...your intended audience can't relate and really doesn't care. They have their own agendas.
Re-work all of you advertising and approach it from the point of view of how you will serve their agendas. It will pay off with a fantastic bank account for you.
You've heard of the Pareto Principle right? If not, it's the 80/20 rule that economist Vilfredo Pareto developed through his research. I bet you haven't heard of the 20/50/30 Rule, though... right? It works hand-in-hand with the 80/20 rule for leads and is more centered on lead qualification.
The basic premise is this:
20% of the prospects that you contact will do business with you easily. There are several reasons why, but the rules on handling them are the same regardless.
1. Get out of their way, and make it as easy as possible for them to do business with you.
2. They believe what you say is true and have an overall good feeling about you.
3. They believe you are skilled at what you do and trust that you can deliver what they need.
4. These types of leads are like Gold - get out of your own way and get to the point.
What should you do? Close the deal!!!
The next 50% of prospects are on the fence. They could go either way, and you have to work with them to make sure they fall on your side of the fence. Here are some ways to help your cause:
1. Make a compelling presentation with confidence.
2. Make sure you tailor your presentation to fit their individual behavioral style.
3. Help break the ice with them, so they actually begin to like you.
4. Make sure that you communicate effectively the benefits that you bring to them.
What should you do? Close the deal so that you can then move them to the 20% that will do business with you easily.
The last 30% of prospects are problems waiting to happen. Their characteristics are:
1. They are highly demanding.
2. Usually have limited respect for you.
3. You will expend tremendous energy with them.
4. You will expend huge quantities of time with them.
What should you do? Throw these leads away - the conversion rate is too low, and the energy wasted is very high.
You need to take a VERY hard look at the prospects with which you are working. Decide who is stealing your time and who you should working with to close more deals. Measure their actions against the above listed guidelines and act accordingly.
You will end up with more money in your pocket and more free time to enjoy your life.
With all this talk of a soft market and more sellers than buyers, many agents have begun to doubt if they are going to be as successful this year as they were last year. When I hear that, I automatically assume that they are talking about making more money. It seems that so many equate success only with money. In reality, there are other things that are important and should be measured as success.
A couple of months ago I was mentoring an agent and they brought to our session the statement that they needed to be more successful. Unclear in what they meant, I asked the question, "What is success for you?" It took a while, actually until we met again, for them to be able to define success. After further review they found that success was on their doorstep. The problem was that they had never defined it and they and their team were confused.
I have a fundamental belief that you must define your success, what it looks like and what it will take for you to achieve it, or someone else will do it for you. Allowing others to define your success leads to what they - not you - see as success. You MUST define it so that you are really seeking what makes you successful.
Here is what I believe to be four non-negotiable components of enduring success. Later you can re-examine the components and revisit what is really success for you.
Component #1: Happiness
Why is it that we have heard so many times money isn't everything? The reason is quite simple: it's true. If it wasn't then everyone with money would be happy and the happiest people in the world would be the richest people in the world. Would you be left out of that group?
Happiness comes from so many different areas. You need to explore where those sources are for you. Look at the happiness that comes from the things that you enjoy doing the most. If you do those things on a regular basis, then you are to consider yourself successful in that area. This happiness should not be determined by a soft or hot market, but rather by your values or innermost desires. Happiness can be right at home but one so focused on their "work success" might walk right by it and never enjoy.
Another place is work. That's right: WORK. Find the things about your career and work that really make you happy. Write them down and take time to enjoy. If you can't find anything, then a career move may be in store. I would imagine that there are many things about your work that really make you happy. Helping others find the dream house, solving a problem for your client, etc. However, if you have not defined success as happiness, you will focus on the problem, not on the joy of solving it.
Stretch out your success barometer to the community. After all of the talk in our industry of "get those referrals," most agents lose the real joy of being involved on a personal level in the community. Take the challenge and search for real happiness in being involved. Helping others, giving back or just simply having a great conversation with someone in town could prove to be real happiness for you.
Component #2: Achievement
Success is not just about what you get done today or how many transactions are going to close this month. The most successful people have found many different ways to enjoy their success. By falling prey to the infinite "more," it is quite easy to miss the larger picture. Feeling a deep satisfaction from your past and present achievements will ensure greater success in the future. Remember, success breeds success and failure can breed more of the same.
Jot down a few of your most rewarding achievements. Maybe it was the day you graduated from college. You may have been in the top 10 percent of your class or the first one to graduate in your family. It could be that you worked your way through school and never gave up even when you were exhausted. There could be successes you have forgotten about because of time passing or being too busy today to jolt your memory process.
Remember the first transaction that you closed? You went into the deal with trepidation and fear but it all came together. For the new agent, it was not only success but also a time of relief, happiness and yes even a financial reward at the end. That was a true achievement.
You can look back and find so many achievements. Writing them down brings back memories and good feelings. We often pride ourselves in being overachievers and hard workers. This may not be a bad thing but should be considered in what you determine to be called success. Don't be afraid to remember your achievements for it will not hinder the future, only enhance it.
Component #3: Significance
At some point in life we have all asked a very pertinent question, "What is the significance of all this that I do?" Again, it is time to write down what we consider to be of significance. What we consider to not be of great significance could have been huge in the lives of others. So don't count it short when it could have been one of your greatest successes. Being a parent is one of the areas where one often fails to see the significance in many of the tasks performed. We were so busy that it passed us right by while being fully engaged in what had to get done that day.
Watching that newlywed couple enter their first house that you put so much time and energy in that you missed the true significance. Just for a moment try to forget about what you had to do to make it happen and enjoy the long-term effect. For that couple, it may have been one of the most significant moments, so just enjoy your part of the success.
Maybe you gave of your time to help a family when you thought that you should be at work. Think of it as a great success. You made a mark and that will never be forgotten. But even if it is forgotten, it was a time of significance in your life. COUNT IT! You are only human if you ask the significance of what you do. It is even more human to think that what others do has more significance in this life than what you do. Remember, you are looking at the significance of success in your life. Let the others find it in theirs. Comparing for the sake of comparing hinders the process and serves no real purpose.
Component #4: Legacy
Legacy is about building on your achievements and values to help others succeed after you're gone. I must tell you that this is probably my greatest desire. From time to time as I long to leave a legacy I easily forget how it is built. Why? I am caught up in the moment. Sometimes "living in the now" can be a benefit, but not necessarily when it comes to building your legacy.
Success will lead to a great legacy, hopefully. But it also will lead to a better today. When you are working with another agent, the impact of your professionalism, courtesy and promptness may be only a few of your daily successes. Without it being said the other agent has learned that there is a better way to do business and your legacy will be remembered through the impact that occurred. Why not think about the sale as an active engagement in legacy rather than as a platform for happiness or just a great way of doing business?
Whether it is the President of the United States or the guy next door, legacy should be a huge part of one's overall success. Legacy is not determined in monetary ways. That would be called an inheritance. Legacy is what you determined to be of great value and others have observed it and counted it worthy to be remembered.
Write it down. How will you impact others in your family, work and community? How will you leave your legacy? Depends on what you did yesterday, what you will do today and what you do tomorrow. Legacy is a great part of success.
Now It's Up to You
Your next step is the good part: deciding where to go and place your attention. I suggest taking the time to ponder all four components. It may move a little focus from one component to the other. It may mean that you will spend less time on work and more in the community. Or vice-versa.
Take one sheet of paper for each component and fill it with things you consider to be important. Questions will arise in your mind when enough really is enough. Maybe it is time to move the focus or just refocus on one particular area. The answer will be different for each person.
Just remember, if you don't determine what is success for yourself, someone else will. As an agent, parent, friend or just a neighbor, the more you celebrate your successes the more successful you will become. Success breeds success.
Real estate has enough surprises and challenges - you don't need to create your own. Self-inflicted agent damage can be solved with patience, education, and experience. Even with top producers, the occasional snafu, while rare, still happens! What follows are some of the biggest mistakes many realtors make in the selling of real estate. It is my goal that you learn from others, because experience is a hard task master. And keep in mind, they don't give out Purple Hearts for self-inflicted injuries!
1. Occupancy prior to closing
I know what you're thinking. The client had to get in, the property was vacant, and the seller didn't care! Why not be a client-pleasing agent and make it happen? You can even cure the liability issue with a pre-occupancy agreement and make certain that all insurance is in place, but I guarantee you that you will only do this once in your career! If you do it a second time, then you must enjoy pain. When those new buyers move in prior to closing, they are at the height of their anxiety. Buyers remorse is running rampant. Mrs. Buyer is still mad at Mr. Buyer for not negotiating harder. The lender is still calling for "just one more" piece of paper! They are so grateful that you arranged that early occupancy but as they are moving in, they notice that the front concrete porch, once hidden with a mat, has a huge crack. They didn't notice the discoloration on the walls until the pictures were removed. How about that stain that was behind the seller's couch? You're saying, "But all of these things would have been seen during a final walk through anyway?"
True, but these things only add to the fire when they discover that when three people are taking a shower at once the hot water pipes jiggle just before the hot water runs out. They also discover that there is a draft through the master bedroom window, that there is an ever so small leak from the skylight, and that there is a gouge of plaster on the inside of the closet. Normal wear and tear, enhanced by the buyer's anxiety and multiplied by the fact that they are currently living with it every minute until the close, combines with the fact that they have the ability to not bring in the money and documents to close. What this involves for the agent is hours of negotiation, repairs, and probably a commissionectomy. No resale house is perfect nor can any one expect it to be; however, when you enhance the presentation of problems and combine it with the buyer's ability to not attend the closing, you are only begging for pain. You will find that it is certainly not worth that short lived client appreciation of early occupancy. In my previous life as a Realtor, I had one personal experience - my buyers sold their home in another state. They came into my office, they told me that they could not get the closing extended, and they had no place to live. I knew it was a mistake but I offered them my abilities for occupancy prior to closing. After much negotiation and time spent, I negotiated a pre-occupancy agreement and obtained the keys for a Saturday move-in prior to a Thursday closing. The batteries in the garage door opener were dead. Every lock in the house had a different key! The rain that week was incredible and the little yellow stain in the corner of the living room (that everyone had noticed) now became damp. We called out the roofer who had previously made repairs and we found that for another $250, the work could be done correctly this time. The carpet didn't go quite with the color of their living room couch and you've never seen more ants in one house! Every day, from move-in to closing, I was negotiating price concessions, handymen visits, and warranty agreements much to the chagrin of everyone involved. Instead of the whole experience being chalked up to "you gotta expect some problems with a used house, honey" it was "we want it perfect before we close!". It only took one time for me to learn that final walk-throughs were okay but there will be no living with the challenges until close.
2. Not preparing for the busiest week of your career - the week before your vacation.
Yes, it's true! REG, the real estate god, guarantees that the week before your vacation will be your busiest week ever! More clients will call this week, more sellers will want to list, and more buyers will want to buy than at any time in your career! Your anxiety grows as the date your vacation approaches and you start considering postponing it or cancelling it all together. Not only will this cause resentment for the real estate business but it will also cause serious family problems! Furthermore, if you ever do cancel your vacation, REG makes sure that those newly acquired clients will soon become the nightmares that we talked about in point number one. Therefore, plan and understand that the time constraints will cause anxiety and that you will need help. Make sure that you have enlisted the help of your manager, broker, and your best friend in the office. They will take care of the files and they will do a great job! Start setting up your "in house" office alliances now to make sure that you have a life! If you want to go and increase your overhead, one of the greatest uses of an assistant is to make sure that the continuity of your small business maintains a level keel during your well-deserved time away. Yes, you can have a life in real estate, but you have to plan for it.
3. Agents were not put on this planet to negotiate!
Very early in my real estate career, I was told by one of my mentors that your seller's highest priority may not be price. They want their hopes, goals, and aspirations realized. Buyers are not always interested in shaving off that last $3000; sometimes they're just interested in getting the home. Over the years, I have seen hundreds of transactions lost by a real estate agent who had a client that truly wanted that home than I've seen that same agent deliver less than full price offers in the hopes of negotiating a few thousand dollars off the price. I've then seen that offer rejected in favor of a better one. I've even had buyers call me (as the listing agent) directly, bypassing their buyer's agent letting me know how badly they wanted the house and if they had known that they had a chance of losing the house than they would have offered more. I have been in the unenviable position of having to tell them that it's too late. I've even seen people cry. When clients want to buy a home, their best chance of doing that is to make a full price or better offer. When a seller wants to sell a home, their best chance is to accept the first offer. Any deviation from these assumptions increases the chances of their goals not being met. I'm not saying to accept ridiculous offers or make offers at above market value, but please take into consideration your client's needs. A $1000 price difference over a 30-year mortgage on a $100,000 home will mean nothing to a client who loves the home. A seller that wants to move closer to family in another state sometimes does not want to see a counter offer rejected and a buyer buy another home because you thought it would be a better idea if a higher 'net' could be squeezed. Real estate agents make dreams come true and they should only become negotiators when it's in the client's best interest....not in the agent's ego or DNA.
4. If they are not motivated, you do not have clients.
As I move around the area, I see agents knocking themselves out with clients that have less than perfect motivation. There isn't a worse mistake in the world than working for free, which we all do, for a client who has less than realistic motivation. "I am testing the market. I have plenty of time to look. I have seen hundreds of properties and I don't like any of them. All the sellers are crazy, I really don't have to buy." These are comments from clients that have less than perfect motivation. When you deal with clients who have lower motivation, you deal with individuals who have more time to complete a transaction - sometimes forever! Since you work for free until closing, time is money! However, there is something even more insidious at work. If the client doesn't really need the fruits of your labor, then nothing that you do sometimes is good enough. Therefore you are in a constant state of frustration with an unhappy client trying to achieve goals that are unclear. The concept is simple. A seller has to have a real reason to sell and a buyer has to have a real reason to buy. If they can not convince you of these things, please have your internal red flag go up and be wary about your investment of time. I believe that the lack of pre-qualifying for motivation may be the largest mistake agents make in their career.
5. It's time to under-promise and over-deliver.
If the sign is going to be up in three days, tell them five. If you're going to email them three pictures, please email them four. If you're going to have them drive by six properties, give them a bonus seven. If you're going to return the phone call in three days, make it two. All agents want to please. I know that I did - and this sometimes leads to promoting best case analyses. It sets up a goal and expectation that are sometimes hard to achieve. One agent I know of makes sure that his affiliates, like his lender, give him a worst case analysis. He says that if you're going to tell a client that we'll be receiving loan approval in three or four days and it takes two weeks, even though you have no control over the loan approval process, you're going to be a jerk! So, therefore, please adopt the worst case analysis with consistently grim expectations. I even went so far as to send all buyers and sellers, who were at the point of signing a contract to buy or sell a home, a list of every nightmare that I encountered in my years of real estate experience. The reason I did this was that they would understand the amount of work that goes into closing a transaction and also to let them know that there are many ways in which a transaction can not come to fruition. This also let them know that they have chosen someone who has great experience in heading off these potential problems. The concept was genius! It not only let them know the amount of problems that were possible, but since most of these problems never happened, they believe that their affiliation with me was the reason for their good fortune. You build perceived value by always outperforming your client's expectations. You'll find the frustration level of your clients, and most importantly, yourself, will be severely reduced.
With a little thought and preparation, you can make your real estate career much more rewarding and less stressful. The control is totally within your hands.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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