Yesterday, Val Allocco (I hope I spelled her name right!), a home stager in New York, responded to my blog post about a home I am staging and asked me about whether I allocate my staging expenses as part of my marketing budget. The short answer is yes. But I thought I would go into a little more detail on my thinking about this, because it differs somewhat from the prevailing attitude in the industry.
I think we are at an interesting time right now in the real estate industry because things are changing very quickly and I think a lot of people struggle to figure out how to keep up with the changes that are happening. I think this is especially difficult for people that have been in the industry longer than I have, because they got used to a certain way of doing things. But change is inevitable. And the big change that will transform our industry just as it has transformed a host of others, is the Internet. Our industry will survive because there is a real need out there for our services, but it may look different than it does now, just as it already looks different than it did 5 or 10 years ago.
How this relates to the way I market homes is, that I think most forms of traditional media advertising are a complete waste of time and money, at least as far as selling a specific home. But I think we all have tried it at some point. When I first started in the industry I would run display ads (4x6) to market the homes I had listed, and never received any interest off them. But I ran them anyway, because I thought that is just what you were supposed to do. All the big name people were doing it, after all, so if I wanted to be a big name person I better do it too. But, the results were just not there. The one thing I did notice was that all the other agents saw my ads and commented on them, but as far as consumers or the people I wanted to reach? Zippo.
That reminds me of one of my more embarrassing realizations, which was how nonsensical it was to run a newspaper ad that says "The Internet Changes Everything." Which I did. Well, one day I realized that one of the things the Internet had changed, was that the person I was trying to reach with that ad wasn't reading the newspaper! I believe that is what you call an "aha" moment. Love those!
Based on my research and what I have seen personally, people looking for homes today aren't looking in print media anymore. NAR estimates that 77% of people are using the Internet to find homes and that number goes up a little every year. The next most important sources are the Realtors working with the buyers, and sign calls. Newspaper and other forms of print advertising are now mainly a supplemental source of information for people who haven't gotten that serious yet. Reason being is that most print advertising is out of date by the time it even reaches the consumer, and a lot of them learn this very quickly after calling to inquire about a house they saw in the newspaper or a magazine only to find that it was sold days or even weeks earlier. At this point, the buyer will either hire a realtor, and of course the agent placing the ad this buyer has just responded to hopes the buyer will choose him, or they will start using the Internet if they are inclined to do so.
So, obviously, the ads aren't placed to sell the home, they are placed to advertise the agent. Getting a lead for the house you are trying to sell is actually pretty unusual--not that it NEVER happens, but it's unlikely. Yet, when we market our listing services to home sellers, we go into great detail about how we are going to buy all this great advertising for their house. Maybe it used to be an effective way to sell a house, but not anymore.
So I've changed the focus of my listing presentations to emphasize the Internet, and minimal print. Not necessarily none--if you're selling a $15M vacation home or something else that is unusual or difficult to sell, you are going to need to spread your net far and wide, in which case print media might be an effective part of that. But in most cases print media is not an effective way to reach MOST buyers anymore, and the sellers know it. And how do they know it? They know it from personal experience...they are looking on the Internet for their next home themselves! So this message really makes sense to them because they are living it.
Furthermore, you need to know your market. I realized (after spending thousands of dollars on print media advertising) that the kind of buyers who are looking in the paper or in magazines aren't the buyers I want to work with anyway, and are probably not the buyers that want to buy the homes I am selling.
And "name recognition" in and of itself isn't that interesting to me. I want a select clientele that understands my value and will tell their friends. In other words, I don't need a lot clients, I just need good ones. These people are not looking in the paper to find an agent, they are asking their friends for referrals, or are looking on the Internet.
I now do all my advertising and marketing on the Internet, at a fraction of what it would cost to run less-effective (for my sellers anyway) print ads.
So if I am not spending money on all this print advertising, what do I spend it on?
Staging, professional photography and web presence. I look at staging as being sort of the "styling" of the house--getting it ready for its close up. Just like how in the fashion magazines the models don't pick their clothes or do their own makeup, I don't have pictures taken of the house until it has been staged and professionally "dressed." And I've seen enough "agent pictures" and professional photographs to know that it is TOTALLY worth the $150 it costs to get a professional out to take the pictures. The difference it makes when you look at an online listing that has professional photos versus one that doesn't, is like night and day. You could be selling a dump and if it's staged and the pictures are done right, with good lighting and the right lenses and so forth, it's going to look like a million bucks, and buyers/agents will flock to see it. Conversely, if you have a million-dollar mansion and the photographs are dark, cluttered and dingy looking, no one wants to come see it.
Maximize your traffic, and you will generate offers. As long as you've done everything else right!
Once I have great pictures that make the house look like a model home, staged to appeal to the most number of potential buyers, I focus on effective promotion via the Internet, other agents, and a variety of other techniques to reach the most potential buyers. But I focus on marketing the home, rather than myself, and believe that by providing better service, I will find the kind of clients I am looking for.
So, yes, staging and photography is part of my marketing budget. I think of staging as the packaging of the product. The product is the most important part of the Four P's, which those with a marketing background may remember from their college days:
- The right Product (packaging is a big part of this--your product needs to appeal to its market)
- At the right Price (a price that works for buyers and sellers)
- Placement (in other industries this is about distribution channels, in real estate, it's your interagent networks and other buyer sources--how will you find them?)
- Promoted effectively (selecting the methods you will use to communicate with buyers and maximizing the effectiveness of these methods).
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