Last Updated on April 24, 2017
- A great way to generate quick commissions (and sell your listings faster) with a great buyer marketing strategy,
- How to create a “Power List” that brings you consistent clients year after year, and…
- How to understand your Return on Investment with your marketing.
So let’s get started…
PROFIT MULTIPLIER #1: New Agent? Just Relocated? Need to Generate Commissions FAST?
First, find an agent with several active listings. Tell them you have a number of “buyer” marketing strategies that will sell their listings in a fraction of the average market time. Offer to implement the 4 “buyer magnet” systems I taught you from this real estate marketing article for EACH of their listings. You manage everything for the agent so they’re out $0 and no time. Second, implement the strategies, agree to take the buyer calls and qualify the leads, and sell them a home. Work out a commission split, and you’ve now got a marketing system working to bring you buyers, and even a few great listings. Plus, you’ll look like a marketing wizard in your office and agent community (not to mention you’ll automatically be building your own “Power List” for increased referrals, word of mouth and repeat business). If the listing agent refuses your offer (some people will step over dollars to pick up dimes!), move on to another agent who’s got some business sense. Remember, the strategies from this real estate marketing article will also help sell your own listings faster by acting as active “buyer magnets”.
PROFIT MULTIPLIER #2: Create a “Power List” and Make Them Your Primary Market
You already know that the NAR research says 74% of all real estate transactions occur from a relationship – they know the agent or are referred from a trusted source. Here’s something you don’t know: If you built a “Power List” (database of personal contacts) with 300 people (homeowners), and the average home ownership period is, for example 7 years (nationally it’s 5.5 years), then 42 of those people will buy or sell every year – good market or lousy market. Holy cow! Is this getting your attention? 600 people on your database and it’s 84 transactions every year from that list. 900 people and it’s 128 deals a year – and so on. And don’t forget, that doesn’t include referrals they could send you – it’s just the number of direct transactions that come from that group. Now hold on. Before you start thinking you just hit “easy street”, there’s something you need to understand. These are not just “random” people. I’m talking about people who know you or know OF you. The higher the “quality” of contact on your list (i.e. the better they know you), the more responsive they’ll be to your regular contact. This means the more inclined they’ll be to think of YOU FIRST when they think real estate. I call this your Personal Market Share™… So the “operative” question is: WHO will get all those deals? ANSWER: The agent with the highest Personal Market Share™. The one who’s stayed in contact (at least once a month, every month), deepened the relationship, provided on-going value to their list, and demonstrated they’re a true professional committed to the relationship for the long haul and worthy of the client’s business over any other agent. Are you willing to become that agent…the one who captures 74% of all transactions, holds such a high personal market share they generate huge income regardless of market conditions? You are? OK, good because next I’ll show you…
How To Build Your “Power List”
Building a Power List is easy if you put your mind to it. Here’s the best way to go about it… STEP 1: Start with all the people you know and create what I call the “Big List”. STEP 2: Put every new and old client on the list. STEP 3: Put leads you generate on your list. Many successful agents make it a point to add 2 people a day, and soon have 500 contacts their first year (and got 10 to 20 deals just by putting people on the list). STEP 4: Also, the other parties to any transactions you complete go on the list (hint: their agent will forget about them, so they’ll easily be yours when they buy or sell again). STEP 5: Create “strategic alliances” with professionals who have clients that could be yours and get a “host endorsement” of your services: accountants, insurance brokers, etc. Consider reciprocating by introducing them to your clients as well. The credibility of the existing relationship is transferred to the endorsed person. Final note: purge your list every 6 months to remove lower quality people. Within 12 to 24 months you’ll have a small, highly motivated group of people sending you consistent business month-in and month-out – something I call building “Critical Mass™” in your business (see Step 3 of the 3-Steps system). That’s what I mean by “Personal Market Share”.
How Often Do You Contact Your “Power List” ?
Now that you’ve created a “Power List” you must plan on monthly contact to make any inroads. Commit to monthly or don’t even start. The Direct Marketing Association reports that the optimum contact time is every 21 days. There have also been studies out there that say for every month you forget about your Power List, you lose 10% of them – another reason for monthly contact. Finally, the NAR reports that the “average” contact program takes between 8 and 12 months to “start” working. (Side note: We’ve cut that time in half with Service For Life!®, but even if it takes 10 months to start the “market share engine” producing, that’s still a great deal, considering most agents never get it going).
PROFIT MULTIPLIER #3: Know Your Return on Investment
If you understand where you get the most return for your marketing dollar… you’ll know exactly what to invest in to increase your income. Sounds pretty simple, but most agents don’t know how to track their numbers. Here’s how to understand how well your monthly marketing system is working for you… and I’ll use a simple example. Let’s say you want to send 300 Service For Life!® issues out each month to your Power List. That’s going to cost you about $0.91 to $1.29 per issue (let’s call it $1.20 because that’s on the higher end and will make the math easier). So you’ll spend about $360 a month for the mailing, including having the newsletter written for you. That means you’re investing about $4,320 every year to contact 300 people 12 times each, or 3,600 contacts. Now, I know that might sound like a lot of money, but let’s get some perspective here. Let’s run some quick numbers… Of those 300 people, you know statistically that about 42 transactions will come from them (300 divided by 7 years average home ownership period = 42 transactions EVERY year). If the average home price is $200,000, that gives you a co-broker commission of $6,000. Subtract out home marketing expenses and a broker split, and you’ll probably net about $4,500 from that commission. Does it make sense to mail to your Power List every month? Well, look at it this way: If you get only ONE of those 42 transactions, you’ve broken-even ($4,500 commission against $4,320 to send for a year). But after all that marketing, do you really think all you’ll get is a ONE measly commission out of 42 transactions? Here’s what’s more likely to happen… First, ask yourself: Who will generally get the lion’s share of those 42 transactions? The agent who’s cold prospecting over dinner time or pestering people in the grocery store line, OR the agent who’s demonstrated their competency, brought great value, created a family-like relationship, and “been there” when it was time to buy or sell? Are you getting a hint? I have agents with small databases of 300 “quality” people who “net” more than $300,000 per year using that very system (and it’s their only marketing). That’s a whole lot more than just one transaction out of 42. Problem is, most agents quit before they get any traction – “instant gratification” takes priority over sound strategy. It’s a shame, but that’s good news for agents who “get it”. When you consider the ROI in your marketing, you now have a benchmark to know when it’s profitable and/or unprofitable for you. To learn more about developing and harvesting endless commissions from your Power List, go here.