G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.
Save costs by utilizing in-house design and production.
June 1, 2007
Like its competitors, ERA American Realty generates a lot of paper. Among other things, it publishes a 48-page magazine every six weeks and a company report once a year, and it maintains a steady flow of ad copy to its local newspapers every month.
Unlike many of its competitors, though, the Fort Walton Beach, Fla., brokerage designs and produces all of this paper in-house, holding on to thousands of dollars every year that it would otherwise hand over to design and production companies.
Beyond the savings, the in-house operation gives the brokerage flexibility and speed in designing and producing its print material, improving its ability, through volume, to reinforce its brand image and give itself what broker-owner Gloria Frazier, CRS®, says is a big advantage over other brokerages in its market. “Our marketing design shop has helped build our brand in a way that you can’t quantify,” says Frazier, who brought design and production in-house 10 years ago.
The benefit of in-house operations is equally important to sales associates, who can boost their personal marketing by tapping a brokerage’s cost efficiencies, says Patrick Conner, president and broker of London Properties in Fresno, Calif.
To be sure, bringing design and production in-house can come with big startup costs — you can expect to pay tens of thousands of dollars if you want to get up to speed quickly — but brokers call it money well spent when you consider your improved marketing control and the thousands of dollars you save in the long run.
Here’s a look at how some brokers have made the move.
At London Properties, the marketing production department started with one graphic artist, one computer, and one software program.
“At the time [in the early 1990s], the graphic artist’s annual salary was about $25,000, and the equipment probably cost $10,000,” says Conner. Today the 450-associate company has 10 production department staffers with a combined annual salary of more than $250,000. They include three graphic designers who create camera-ready copy for ads; three graphic designers who work on other projects, such as postcards; one person who makes the company’s yard signs; a manager; a billing person; and a mail person.
The company maintains about $1.5 million in equipment, which includes several computers with graphic design software; printers, including a 15-foot, high-speed color printer; paper cutters; scanners; postage machines; and a machine that creates vinyl banners.
To help offset the costs, the company typically charges its associates part of the costs for their personal marketing pieces. For instance, there’s no paper cost to associates for full-color, company-standard just listed/just sold and open house postcards, printed with a personalized message from the salesperson. But the company charges a $10 setup fee for the print run and covers about 25 percent of the bulk postage cost. “It costs associates about 20 cents for a postcard to be printed and mailed with their message,” Conner says.
If associates want custom materials, they pay an hourly graphic designer rate of $35–$40 and cover the cost of supplies. For associates who want an entire brand created, the company will design a turnkey marketing package—from business cards to postcards to Web site graphics—for a little more than $1,000.
Conner says his associates like having the services in-house, and it’s translating into a plus in recruitment and retention.
“We wanted to offer full-service graphics services to our associates, and we also wanted more flexibility to change our ads more often,” says Conner. “We also didn’t want to be competing for sales associates solely on the basis of compensation. We wanted to give them a means to partner with them to grow their business.”
Tap In-house Talent
Frazier of ERA American Realty added design and production services about 10 years ago, when the company had about 50 associates. Today it has 122. Frazier attributes that growth in part to improved quality control of the company’s brand image. “All the salespeople were doing something different in their marketing pieces,” says Frazier. “Some materials were better than others, and we had no corporate image.”
Although Frazier wasn’t planning to create the department, she seized an opportunity that was under her nose: An employee who was temporarily working as an assistant to several associates was creative and computer savvy, so Frazier moved the assistant into a new department, now called the Print Design Shop, where she began designing marketing materials for the company and its associates. “It turns out it’s an attractive recruiting feature,” Frazier says.
She estimates she initially spent about $15,000–$20,000 to set up the shop, excluding salary to the assistant, who was already on the payroll. Since then, she’s added three staff, and now salaries for the four amount to about $85,000 annually, plus employee benefits. She also regularly upgrades equipment and has about $20,000 invested, not including a color copier she leases for about $500–$600 monthly.“We don’t upgrade every year, but when we do, it costs us about $2,000,” she says.
Associates pay a set fee for each marketing product depending on how many pieces they order. The cost covers the graphic designer’s time, printing, and paper stock. The company also offers products for a flat fee. For a five-year program in which the company sends four personalized pieces annually to consumers who’ve bought or sold through an associate, for example, the associate pays $40.
“We occasionally compare our services with those of printing companies,” and associates couldn’t find the same service from an outside company for as low a price as they can get from the in-house operation, says Frazier.
Build From Scratch
Despite its small size, The Gove Group Real Estate in Stratham, N.H., saw in-house marketing production as an expense it was willing to shoulder because the service created a way for associates to compete against the big guns in the market. “We’re an independent, and everywhere you turn there are franchises with big names and marketing budgets,” says Patty Harpin, co-owner of the 15-associate company.
To build its image in a market with deep-pocketed competitors, the company brought its marketing in-house about five years ago. “We wanted to have all our advertising centralized, get more quality control, and develop a branding campaign,” says Harpin. “It allowed us to create a brand, and that’s been a big deal for us.”
The company started by hiring a full-time marketing manager for less than $50,000 annually and investing about $1,500 in equipment. Since then, the Gove Group has added another employee and $50,000 in equipment, which includes a computer with juiced-up memory and speed, graphic design software, a laser printer and copier, and several high-quality digital cameras. Harpin estimates the company spends about $5,000 annually to maintain the software and equipment.
A Benefit to Associates
Prudential Serls Prime Properties in Hopewell Junction, N.Y., launched its in-house marketing services primarily as an associate benefit to help its company stand out from the competition.
Designers work with associates to create marketing programs tailored to their needs. “We outline a marketing plan with them and help them hone their identity,” says Debbie Domber, director of marketing. Associates don’t have to use the company’s services, but about 75 percent do, because it saves them time and money and helps them create professional-looking pieces quickly, Domber says.
The company subsidizes associates’ marketing costs. All design work for advertising and marketing materials is free, and the company passes along any discounts it receives through bulk agreements for buying advertising space.
Prepare to Spend Time, Money
Whether you start small or big, be aware that the program will take time to create and will probably never turn into a revenue generator for your company, say brokers.
Frazier at ERA once envisioned that her Print Design Shop would. “I’ve given up that hope,” she says. “There’s no way to cover the costs and still be competitive.” Even so, her shop has “more than compensated” the company by improving its marketing materials and its ability to recruit new associates, she says.
In fact, last year, Frazier was looking for ways to trim costs and considered cuts in the Print Design Shop. “The more I thought about it, the more I thought that would be like eating the horse you need so dearly to ride on,” she says. “Instead, I beefed it up.”
Conner, who oversees a $1.5 million–plus production budget, says a brokerage needs to do a big volume for that type of investment in marketing services to make financial sense. “Everyone can do some level of in-house production,” says Conner, “but I don’t think you can do what we’ve done with fewer than 2,000 transactions.”
“What we’re happiest about is that we started 15 years ago,” says Conner. “A company can’t just flip a switch and do what we’ve done. It takes years to build up your in-house staff, implement the programs, and work out all the bugs and kinks.”
Are your salespeople looking for design and production options? Hewlett-Packard Co.’s Real Estate Marketing Assistant software lets them publish flyers, brochures, postcards, and other materials. For more information on this Realtor Benefits(sm) partner, visit REALTOR.org/realtorbenefits.