One of the most challenging things you will do, as a salesperson in real estate is have a seller pay a sufficient amount for marketing so their property has the appropriate exposure to sell.
When we were in real estate we had over 100 salespeople and using the below method, our entire team averaged just under 1% marketing investment from the vendor of the list price. For example, on a $500k sale, there would be a $5,000 marketing budget allocated.
Here’s how we did it…
The first thing you need to ask yourself is what is the importance of marketing, and why are you seeking funds from the seller to support it? There is only one answer: to achieve a higher sale price for the property which results in more than covering the marketing dollars spent.
Real estate marketing is all about increasing the exposure of the seller’s property beyond the street address. Without appropriate marketing, how will people know that your client’s home is for sale? Or, how will investors seek out new properties? Simply put, they won’t and they can’t. Not without marketing.
Ideally, you would be using a Customer Relationship Management (CRM) tool that has the functionality to produce the following data and reporting. Make sure you consistently enter every buyer enquiry into a system that allows you to tag where that enquiry came from (i.e. walk in, signboard, realestate.com.au, local paper, etc.)
Once you have entered a considerable amount of buyers and the source of their enquiry, hopefully, your CRM has the ability to provide the following reports. If not, these can be done manually.
- The number of enquiries from each source. How many buyers saw properties from a signboard and enquired? Or, how many enquired through realestate.com.au?
- The number of sales from a single source. This is the number of enquiries that came in from a single source and of those enquiries resulted in the purchase of that property.
These two reports will give you valuable information on what is actually working in your marketing strategy and what is not. For example, you may find that enquiries directed from your local paper have never resulted in a sale and therefore you’re probably wasting your money unless you’re getting another benefit like listing enquiries. You might see that a certain website is generating more genuine enquiries that are converting to sales. It could be that a higher percentage of enquiries resulted in sales thanks to this medium instead. If more genuine buyers look at that website, you should probably increase the dollars spent there.
- The third and final report you need will visually display the previous results (see a sample below). Ideally a pie chart and your CRM, will be able to produce this report with ease. You will be able to visually and easily represent the number of sales you have achieved from buyer enquiries across each source.
(Click chart to view larger)
Based on the information from the pie chart you will be able to launch your marketing plan, allowing for well-measured exposure across the different mediums. When discussing with your client, provide them with hard copies and good visuals of what each marketing piece in those categories will look like.
The aim of these reports is to persuade your client further of the benefits of marketing. Out laying funds upfront can be daunting for clients; therefore, you need to ensure you have all of your facts in order so that they can see the ‘bigger picture’.
When explaining to the client, the first point you need to make is that you have put together a strategy to give them the best opportunity to achieve the highest price for their property. The objective of this strategy is to get more than one really interested buyer on their property, so they can compete against each other and drive the price up.
At this point, you should have the seller’s full attention and you move into explaining how your company over time has identified the areas where the best buyers come from by keeping accurate data. This is where you show them your well-calculated reports. Work your way through the reports and visuals, showing them the marketing medium that relates to the pie chart.
Once you have finished, state that you have taken the conservative approach by making sure that no area where your company has attracted genuine buyers in the past has been left out. This would give the best opportunity to leave “no stone unturned” in finding the best buyers for your client’s property and hopefully more than one.
At this point one of two things will happen:
- They will agree with your strategy and the budget you have allocated, or;
- They may agree with the strategy but not the budget.
In this case, do not defend or try and convince them to pay the entire budget. Simply ask them what budget would they feel more comfortable with. Once you have a figure, ask them which marketing they would like to remove. Make sure to point out the percentage of buyers from that category that will not see their property. You should ask here are they okay to take those buyers away? Then wait for an answer.
Use the same dialogue for each area that they want to remove. However, do be cautious. In many cases, the client will ask for your recommendation as to which mediums to remove. Regardless of your research, your response to this question should allow for the client to make their own decision. Reply that you cannot comment, as you do not know where the best buyer might come from that will pay the most for their property. This is the reason you made your recommendation to cover all the areas to have the best chance of attracting a sale.
The moment you suggest to remove something you will lose credibility. The client will start to question why you recommended that medium in the first place and what else can they also remove. Stand by your marketing plan and don’t involve yourself in changing things if you believe in it.
This process is consultative and at no point to be about selling advertising. It’s all about a strategy to get your client more money. If they decide to remove items, then it is at their peril that they have limited what they could achieve.
When/if a seller has decided to remove any marketing, then down the track if the property has not sold then you can suggest to them to add what was originally removed back to the marketing strategy.
You should stick to this process remaining consultative in nature and make your sellers part of the strategy then you will be far more successful in getting the correct marketing for a property to sell at a higher price and have a lot of happy clients.
If you need further advice on accessing a great real estate CRM to assist you with building the reports you require for a successful marketing strategy you can find out more about how Aro can support you here.