Why do some agents fall victim to abusive commission reductions, while others continually get full price for their services 100% of the time? The answer is simple: Smart agents know the importance of “Value Marketing”. What’s Value Marketing? It’s understanding and using the psychological elements that persuade people to recognize the true value of your products and services. The problem most agents face is their prospects and clients see them as a “commodity” where one agent is viewed the same as the next. And when alternatives are presented as equal in all other respects, people will naturally negotiate price. Here’s a formula I want you write on a piece of paper and post above your desk…so you’ll see it every day…
Motivated Prospect + Unique Product + Limited In Supply = VALUE
Yes, folks, it’s a lesson in economics. But it’s more. It’s also a lesson in psychology and marketing. DeBeers (the diamond producers) understand this lesson implicitly, and have held the world hostage with their “value” tactics for decades. Think about it: 1) Diamonds are extremely unique from other stones, 2) Intensive emotional marketing has caused a great demand for diamonds (have you ever seen a pearl engagement ring?), and 3) DeBeers has intentionally manipulated the supply of diamonds in the market place by limiting production and distribution and applying predatory practices against anyone who attempts to compete with them and increase the supply of diamonds in the world. DeBeers may be an extreme example, but the lesson it provides is no less applicable to YOUR business. Would you like to quickly multiply your value in the marketplace? Would you like to carve out a nice little niche where you never hear a client demean you by asking for a commission reduction?
Strategy #1: Stop dealing with commodity Markets. Most agents will attempt to work with anyone with a heartbeat and bad breath…and they end up being professional tour guides, not sales producers. Smart agents target their energies with laser beam accuracy (and qualify their prospects) – so the time, energy and money they spend prospecting gets results. Yes, what I’m saying is you need to reconsider “whom” you are marketing your services to in the first place. Here are 3 guidelines that can change your business when it comes to selecting and prioritizing markets…
It’s Your Market Share!It’s the ONLY thing you can rely on for predictable business in good and bad markets. Work the numbers: if you want to sell 40 homes this year, and you know the average homeowner owns their home in your area for 7 years, then you need to have between 280 and 350 people in your database who, because of your intense, value-oriented and welcomed contact, think of YOU FIRST for real estate services. Do the math yourself – 80 homes a year will require 700 people, and so forth. 40 homes will sell from this group – whether you get them or not is up to you. Now… those numbers are only if you get 100% of the deals from your house list. And since that won’t happen, you probably need a bigger list and/or better contact. But remember, the “secret” is not just the size of your list, it’s QUALITY of your list. The greater the quality of each person on your list (i.e. the better they know you and believe in your services), the smaller list you need. And building the quality is easy once you understand how to create the right relationship-building contact. I’ve created 7 strategies for increasing the value of your house list in my Free course, “The Ultimate Real Estate Success Secret™“.
Strategy #2: PRODUCT-IZE Yourself To Be UNIQUE From Other Agents. Productizing yourself really relates to educating your prospect through unique (and sometimes proprietary) methods of how you can help them, and how you do business. Here are a few examples of productizing yourself: Rather than give a CMA, why not design a “Maximum Home Value Audit™” where you review their home in every aspect to determine how to get maximum dollar in their sales time frame. And no other agent has a “Maximum Home Value Audit™”. Or…during your listing presentation (or buyer qualifying) reveal ALL the things you do for your clients. Many of our 3-Steps agents use our “28 Step Home Marketing Plan™” with the “listing duties” section of their listing presentation. When clients become aware of ALL the things you do to list their home (not just find a buyer through MLS), you have more value. Or…create a “Platinum Home Buyers Program™” and list out all the steps you’ll take for your buyers to make buying the perfect home easy, fast and affordable. And make sure to copyright all your proprietary marketing materials so the agent next door to you won’t rip you off without getting a letter from your attorney.
Strategy #3: Make Yourself AND Your Services RARE in Supply Think about this: Have you ever seen a Cardiologist make a cold call for business? How about a dentist? A lawyer? A neuro-surgeon? When you’re unique and different, there are only so much of you (or your services, special reports, listings, whatever) to go around. And that creates VALUE! Two things I want you to focus on here: 1) Make yourself and your services very unique, and protect their intellectual property from other agents, and 2) “Take a position”. What do I mean by this? You just saw from Strategy #2 above that “product-izing” yourself makes you different from other agents. “Taking a position” means that you treat prospects and clients like you want their business, but you’re not willing to grovel or tolerate abuse for their business. Heck, you’ll never struggle if you have strong marketing systems bringing you a steady stream of prospects and clients each month. You can pick and choose your preferred clients. Finally (and this goes against most agent’s beliefs), educate people on HOW you work in your practice. Set their expectations up front in a polite and professional way, and require people work within YOUR parameters. You’ll be amazed how well they’ll comply…and how much more effective you’ll be in your business.