Monday, July 31, 2006

Larger Issues Effecting Our Economy

Although this is primarily a marketing blog, I do want to keep readers in the loop on what is happening in our economy and what politics may effectively shift how everybody does business. This press release published on the NAR website is one of those issued:

Essentially, Wal-Mart and its subsidiaries are applying for FDIC insurance of its financial groups and a House Subcommittee is reviewing the application. Although unlikely to pass, the application sets a dangerous precedent for large companies. The basis for market valuation, and indeed every business endeavor is the balance between the risk that the investment poses and the potential reward. Often times, the risk associated with a project or investment is the complete loss of the investment. Subsequently, adequate potential reward must sufficiently off-set the risk in order for an investment to be “worth the risk.”

So how does this translate to business and to larger corporations? Well if you have a potentially beneficial investment opportunity, you need capital to invest in the opportunity. However, capital is scare but can be borrowed from the bank. So you go to the bank, explain your opportunity and try to borrow money. If your opportunity is a sound investment with an acceptable amount of risk, the bank issues the funds and you make the investment (This is more applicable to larger organizations than private individuals. Most banks have a really hard time loaning individual’s money for investment opportunities)

Okay, so what happens when you own the bank and the government underwrites some of the losses you may experience? Well, your acceptable level of risk for a potential return has the potential to become much greater. You can take much bigger risks and potentially lose a lot of money with the assurance that the taxpayers will bail you out. Personally, I can’t afford to bail Wal Mart out if they start loaning money to their subsidiaries for projects that have an unacceptable level of risk.

Okay, off the soap box and on to finding leads for real estate agents.

REALTOR® Lead Prospecting Engines

So back to the topic of prospecting engines. As I said below, a REALTOR® lead prospecting engine is a system that maintains continual contact with that seventy percent of prospective buyers that will need your help within the next few years. It should be automated enough to require only a little input on your part, but still personalized enough that it adds value to the prospect. Below is a diagram of how the prospecting engine essentially works.

With a prospecting engine, prospects are initially receive and qualified by the real estate agent. If the prospect is in need of real estate services at that moment, then the real estate agent takes action. However, most prospects will not need a real estate agent right at that moment. In that instance, the real estate agent feeds the prospect into the prospecting engine to be sure that the prospect eventually becomes a client. The prospecting engine educates the prospective client about the services offered by the real estate agent, and maintains contact across a variety of mediums. Eventually, the marketing engine provides enough contact with the prospect that they can repeat the name of their potential REALTOR® un-prompted and know exactly how to get hold of that agent. By creating this type of relationship with all of your prospects, you can be sure that most of the time, you will be their first phone call when it is time to use the services of a REALTOR®

Sunday, July 30, 2006

Unique Sellining Proposition

I will go on with my diatribe about prospecting engines in subsequent posts. However, I wanted to share this article from broker agent news with you. I have taught for many years that every business and broker needs to have a unique selling proposition that separates them from their competition. This is critical in the real estate industry because of the massive number of agents competing for business. This article by Will Dylan points out a few of the benefits and provides a great overview of the benefit and inherent need of a unique selling proposition for a real estate agent:

Please read the article, but a quote that I found compelling was:
“Dr. Cialdini's statement raises another issue for you to consider. How much time do you spend in your sales presentation telling clients what they can't get anywhere else? What is that one unique component of your offer to clients that they can't turn down, out of fear that they will be "missing out" by going with another agent?
Is it:
your patented system for selling homes faster than the market average
your value added home staging service provided free with listing
your 25 years of local experience
your status as the number one volume agent in the area
your unique, customizable online marketing program for new listings
your service guarantee
While different segments of the market will all respond a little differently to some of the offers laid out above, the point here is that each offer is hard for another agent to duplicate. Anyone can lower their price, but only one agent can have a patented, exclusive sales system that beats the market on average. Any agent can offer a discounted price, but only a few can boast 25 years experience, or top volume status, and so on.
In most cases, if you can make one of these relatively unique offers, you are effectively saying to your prospects "If you don't list with me, here's what you'll lose..."

Saturday, July 29, 2006

Lead Prospecting Engines Explained

To continue our discussion about prospecting engines, it is simply a system to maintain continual contact with a prospect until they decide to use you as their real estate agent. There is a basic tenant in marketing that a person will recognize a message after at least five exposures to a marketing message. They will act on a message after eight or more exposures, and will remember a message by wrote after twelve or more exposures. A good prospecting engine is a system that automatically maintains contact with your prospective clients and exposes them to your personal brand or message often enough that they remember your name.

Friday, July 28, 2006

Basic Tenant of the Successful Agent

Before we get into the unique nuances of creating willing and fully motivated leads, I want to share with you a basic differentiator between successful and unsuccessful real estate agents. The differentiator is what I like to refer to as a prospecting engine. A prospecting engine is a tool or system used by successful agents to continually feed leads and clients into their business. These prospecting engines are systems that successful agents use to maintain continual contact with their prospects to ensure that they are at the top of the list when a client needs help with a real estate transaction.

To think of it in different terms I present the following. Take 100 people in your city or surrounding area. Out of that 100, statistically speaking, two need the help of a real estate agent right now. That is two people out of a sea of 100, and every real estate agent in your area is competing for the business of those two people. They are spending a lot of money sending out mailers, advertising, paying for leads, just to find those two people. Unfortunately, there are so many agents competing for those two clients that most agents end up wasting a lot of time and a lot of money with nothing to show for it.

Now once again looking at that group of 100 people. There are only two that need your help right now. HOWEVER, there are twenty that will need the help of a real estate agent within the next two years. In addition, there are fifty more that will need an agent within the next five years. Out of 100 people, there are seventy-two that will need your help within the next few years. A prospecting engine is a system that makes sure that all 70 out of those 100 potential clients will choose you over your competition. In addition, a prospecting engine is automated which means you will have a lot more time to focus on closing sales and making money while the leads and clients roll in.

I’ll post more on prospecting engines in the near future.