Money In The Bank
What most real estate agents refer to as Marketing is really nothing more than Advertising. Advertising is just one small component of the large umbrella that is Marketing.
Agents place ads on websites, in newspapers, they erect signs, they place leaflets in letterboxes, but all of these are advertising. What other MARKETING do they do? Not much really.
I see agents place ads in newspapers, sit in open houses, and watch as ‘buyers’ wander through the ‘open’. At the end of the open, they close that property, travel to the next one, open that and… guess what?… many of the same people attend the next open house.
Do you see what is happening here? The agency paid for two advertisements – one for each property opened for inspection – and many of the same people attended both opens.
THE AGENCY PAID TWICE FOR THE SAME LEADS.
No marketing expert will say this makes sense. The idea is to advertise once, gather the leads, and then continue to keep in contact with those leads until they either turn into sales or until the prospects ask you to stop marketing to them.
This means you need a Database. A good database is like money in the bank.
Most agencies do not have a reliable database that grows by a significant number of prospects each month. These agencies are doomed to continue their programs of expensive advertising – often with diminishing returns.
Here is what one leader discovered with his database:
- He has 20,000 contacts in his database
- It produces reliably 10 listings a month on average
- If only half of these sell, this is 5 sales a month
- At an average selling fee of $12,000 the return from database sales is $60,000 a month, or $720,000 per annum
- This agency has a gross profit of 30 percent ** so the profit from sales that came off database leads is $216,000 per annum.
A database IS
I nag our leaders and salespeople to build databases. I can’t believe that in the 21st century leaders are still so short sighted that they do not build a database.
There is plenty of good database software out there. You don’t need much more than to be able to enter names, addresses, phone numbers, and email addresses, and the ability to send personally addressed letters and emails from this data. Don’t make it too complicated.
At the Pittard Training Group, we believe this is such an important aspect of marketing that we have under development an online database that we will web host for our clients at no charge. For too long now we have watched many of our leaders put their databases into the ‘too hard basket’ and so we intend doing half the work for them.
I say half, because a database is only as good as the data that goes into it. For this, EVERYBODY on the team is responsible. Everybody who talks to a client is responsible for gathering the relevant details from that customer and obtaining permission to enter them into the database and to stay in touch. This cannot be left to the leader alone, but it is the leader’s responsibility to follow up with every team member every day to instil data gathering as a HABIT.
If you found a $20 note on the ground, would you walk past it? But a 3 x 5 card with a client’s details on it is worth far more to your agency than a $20 note. But how little attention is given to ongoing marketing to that lead?
Without a database you devalue your business. People pay big money for databases and, when you go to sell your business, a buyer will pay big money for yours.
But long before then, if you build a database and market to it, you will see that the return on investment is huge. You will already know that a good database is money in the bank.