3 Marketing Budgets, 3 Great Plans
Whether you can invest $1,000, $10,000, or $100,000 to build your business, we¿ll show you how to get the biggest bang for your marketing buck.
May 1, 2007
A good rule of thumb for real estate practitioners is that marketing budgets should equal about 10 percent of their commission income, says Jerry Rossi, e-PRO®, GRI, author of Dog Eat Dog & Vice Versa: 9 Secrets to Put the Bite Into Your Marketing (Charter Publishing, 2006).
But percentages tell only part of the story. When you’re just getting started—like Richard Schiffer, a sales associate with Weichert, REALTORS®, in West Chester, Pa., who got his real estate license in August 2006—coming up with even $1,000 to promote yourself can be tough. That’s why Schiffer is using the oldest, least-expensive marketing strategy in the book—networking.
He relies on free social sites, such as Facebook and MySpace, to reach his target market of first-time home buyers. He also blogs three to five times a week on the free ActiveRain Real Estate Network to establish his expertise with the site’s other real estate professionals. His blog entries will soon be carried by ActiveRain’s new sister consumer real estate site,www.localism.com. The marketing budget: Schiffer’s time and energy. The result: In one week alone, he received three phone calls and one e-mail from prospects who read his blog posts. His Facebook prospecting helped him land an exclusive agency contract with a buyer seeking investment properties.
At the other end of the spending spectrum is Patricia Choi, CCIM, CIPS, whose international clientele expects her marketing to match the luxury homes and commercial-investment properties offered by her boutique real estate company. As president and principal broker of Choi International in Honolulu, which has 35 sales associates, she has a six-person marketing staff to execute full-page ads in luxury home magazines, create glossy four-color property brochures, photograph and stage properties, and keep her Web site updated. She’ll also occasionally throw one amazing open house—often with catered food, valet parking, and a pianist or harpist—spending between $5,000 and $10,000 per event.
The marketing budget: more than $100,000 annually, just for her own listings. The result: Choi closed $135 million in sales in 2006, one of the highest sales volumes among luxury residential practitioners in Honolulu for nearly a decade, she says.
In all likelihood, your marketing budget is somewhere between those two poles. To help you spend wisely, REALTOR® Magazine took a peek into the marketing playbook of three practitioners to show you how they use their money in ways that net great results.
The Marketer: Roger Ek
The Budget: $1,000–$2,000
Around town, Roger Ek of ERA McPhail Realty in Lincoln, Maine, is known as the Northern Maine Land Man. He’s built a niche out of selling land and recreational properties. His outdoorsy look, he says, reflects his target market of buyers who share his enthusiasm for nature.
Ek dresses the part, wearing a fluorescent orange hunting cap and a fishing vest embroidered with his Land Man tagline. The same slogan appears on the GMC Crew Cab truck he drives.
Here’s how he helps solidify his image with marketing.
Restaurant place mats. Even outdoor types like to eat out occasionally. Ek spends about $165 every six months on about 10,000–12,000 place mats that are displayed at three local restaurants. Those promotions include his tagline and contact information, along with general tips and property information on hunting and snowmobiling in the winter and on fishing and all-terrain vehicle trails in the summer.
REALTOR.com. He pays about $1,050 per year to have REALTOR.com host his Web site, which he uses to showcase his listings and promote himself as the go-to person for land in northern Maine. REALTOR.com has been particularly useful for lead generation, he says. With the featured-agent package, his name and links to his listings and Web site pop up when a prospect looks for a REALTOR® in his area.
Business cards. Ek goes through about 1,000 business cards every quarter, at a cost of about $40. He always hands people two cards—that way, if they pass one along, they still have one. He also keeps his business cards available at gift shops, art stores, and gun shops in the community.
Word-of-mouth advertising. To build referrals, he stays involved in the community. He’s a member of service organizations, such as Rotary International, and a volunteer firefighter. He also uses his expertise as a registered Maine guide to his advantage when interacting with residents and visitors. “I know what kind of fish swim in the lake, where the deer are, what you can build, and where you can build it,” Ek says. “I know every snowmobile trail and where you can legally ride an all-terrain vehicle 100 miles to the ocean, dip your tires in salt water, and ride back.”
The result: Ek closed about $3.2 million in sales in 2006 and has landed in the top 10 in commercial sales, of nearly 39,000 ERA brokers and sales associates, for six consecutive years. When he attends real estate conferences, he says, people remember his hat.
The Marketer: Victoria Zapantis, GRI
The Budget: $10,000
When residents of the 540-home Washington Town Center development want to sell a home, their first thought is probably to call Victoria Zapantis. That’s because she’s everywhere in the neighborhood—mailing newsletters, hosting a community Web site, and participating in local events.
“Perception is reality,” says Zapantis of Long & Foster Real Estate in Princeton Junction, N.J. “If people perceive you to be the dominant salesperson in a community, you’ll get listings and sell more.” To generate that perception, Zapantis spends approximately $10,000 a year on marketing; she has a 30 percent market share in her community.
Direct mail. More than half of her marketing budget—about $500 per month—is spent on mailings. She uses templates for her marketing materials—which include Just Listed postcards, brochures, and flyers—from the direct mail marketing company Quantum Mail. Zapantis says she’s learned that patience pays in direct mail. She used to quit mailing after a couple of months when she saw no immediate results. Now she consistently mails marketing materials to the community’s 540 homes about three times a month.
Interactive Web site. Zapantis spent about $900 to develop a community Web site and allocates another $60 per month to pay Connecting Neighbors, an Internet-based neighborhood marketing company, to host the site and make any updates she needs. The site lets residents post free classified ads, chat with their neighbors online, exchange recipes, access online coupons, and view her listings. She drives people to the site through her newsletter and other marketing materials.
Neighborhood participation. To keep her name in front of residents, she stays involved in neighborhood events, such as judging a local Halloween house-decorating contest or sponsoring a neighborhood garage sale. That sponsorship cost Zapantis only about $100 for 150 signs and some balloons, but she was able to form new relationships with residents, and she made sure to buy something from each resident who participated in the sale. Her involvement is part of her overall strategy to keep her name constantly in people’s minds. “I learned from real estate coach Debra Asher that people need to see your name about 29 times before the brain associates you and your business with your name,” Zapantis says. So that’s what she shoots for.
Bimonthly newsletter. Zapantis spends about $400 per issue to produce a four-page, color newsletter. She uses a template that includes prewritten real estate articles—on subjects such as understanding commission fees—which she buys from ProCalibre Associates Inc., a real estate marketing company. She adds color to the template for more impact and writes one or two pages of copy about her current listings and what homes sold for in the neighborhood.
The result: In nine out of 10 appointments, the prospect has the newsletter in hand or comments on it, she says. Her strategy to become the community expert helped Zapantis sell more than $6.2 million in real estate in 2006.
Top of the Hill
The Marketer: Jo Ellen Nash, CRS®, GRI
The Budget: More than $100,000
Last year Jo Ellen Nash spent more than $100,000 to market her boutique brokerage’s properties to wealthy buyers around Vail, Colo. She understands the need for high-end marketing to match her client base, but that doesn’t mean this savvy owner and managing broker of Nash & Co. doesn’t watch her pennies. A key marketing tool is her twice-a-year 44-page color magazine, Memories in the Making, for current and past clients. Despite its gloss and 100,000-copy distribution, the magazine costs her company almost nothing to publish.
That’s because Nash has developed affiliate relationships with local businesses, such as carpet cleaners, appraisers, and attorneys. The companies agree to advertise in the magazine at a cost of $1,600 for a quarter-page ad. The ad revenue covers the majority of the $92,000 printing cost of each issue. Nash includes her affiliate partners on her list of preferred sources for clients. The companies do the same for her. With her own money, then, Nash is able to implement a number of other marketing strategies.
Individual property URLs. She spends about $250 per listing to have a Web designer develop a custom Web site (such as 658saddleridge.com). She also registers a domain name for each property at www.enom.com for about $8.95 per domain site per year (a bulk rate). The sites contain a Flash virtual tour set to music, downloadable brochure, photo gallery, community information, and online forms for scheduling showing appointments.
Podcasts. Nash uses a professional editing service, Talk Realty, to offer a monthly podcast about the local real estate market on her Web site. She paid $295 to set up the service and pays $49.95 to add each new podcast. Talk Realty sends her interview questions about the market; she researches local statistics and calls a special phone number to record her responses. Talk Realty then edits her answers, mixes in music, and adds a host or interviewer voice-over.
Stealth Web sites. Nash’s marketing materials direct prospects to some of her 35 generic Web sites (such as vailinvestor.com). The sites offer a nonintimidating way for buyers and sellers to find housing information without having to talk to a sales associate. The company’s policy is not to call Web site visitors, but it does use a registration form to capture e-mail addresses. The company sends prospects a list of properties that meet their search criteria. The point is to build an e-mail dialogue so that prospects call Nash when they’re ready to buy. She spent about $500 on the design of each site and $8.95 per site per year to register the domain name. Hostgator, a Web hosting company, hosts all 35 of her sites for about $20 a month each.
Client loyalty services. In 2005 Nash invested $33,000 in a used stretch limousine and put her company name and logo on the side. She lets past clients use it for weddings and proms; sometimes she sends tickets to local events to past clients—and dispatches the limo driver to chauffeur them. She also builds loyalty by offering a client concierge service—everything from handyman services (Nash typically pays for an hour) to a moving truck. She bought the truck about seven years ago for $25,000.
The result: Nash’s company closes $50 million to $60 million in sales yearly, about 60 percent from referrals and repeats.
Regardless of whether you’re a big spender or struggling to get your business off the ground, star marketers agree that the most effective marketing strategy is still one of the least expensive. “Allow others to get to know you as a person so that you’re not just a face in the newspaper,” Choi says. “Relationships are your greatest marketing tools.”
Marketing Ideas to Fit any Budget
Here’s a range of ideas for making the most of your 2007 marketing budget.
Billboards. Clients and prospects will find it hard to ignore your 10-foot-high smiling face. You may be able to snag a highway billboard in a small market for $1,000–$2,500 per month, but if you want one in a more heavily traveled spot, expect to pay a lot more, says John Clements, CRS®, executive vice president of CBS Outdoor Real Estate/Acquisitions. Cost: $20,000–$40,000 per month for a major highway billboard in New York City; $8,000–$10,000 per month for that same billboard on a major highway in Phoenix
Targeted newspaper ads. Salesperson Lori Hopkins of Heritage Properties in Niantic, Conn., has a trick with newspaper ads: She twice runs the biggest color ad she can afford, usually on the back page or right-hand corner of a page in the real estate section, in her local newspaper to promote her open houses. Cost: $800–$1,000 for two half-page color ads
Postcard campaign. Make direct mail more affordable by sending postcards quarterly instead of monthly, suggests Jerry Rossi, e-PRO®, GRI, author of Dog Eat Dog & Vice Versa: 9 Secrets to Put the Bite Into Your Marketing (Charter Publishing, 2006). If you can afford to send only 100 postcards a month, send all 100 to one part of your farm one month, the next 100 to another part the next month, and so on. Cost: $95 for 250 standard postcards, with color printing on the front only, from Modern Postcard
E-mail postcard greetings. Maria Strong, with Century 21 H.T. Brown Real Estate Inc., Team One, in Waldorf, Md., uses free online e-greeting cards offered by her company to send open house, Just Listed, and Just Sold announcements to her farm. The cards, set to classical music, include a property photo and description, her contact information, and her URL. You can find dozens of e-card sites online. Cost: Free
Television. Hopkins soon plans to run a TV advertising campaign with a series of testimonial ads featuring past clients she’s helped in the home buying or selling process. She hopes to run the ads locally on cable stations that carry home programs, such as HGTV and TLC, over eight consecutive weeks, two times per year, probably in the fall and spring. Cost: $4,000 per month
Become a source to the media. To help build your credibility, develop relationships with local media and offer to be a source for them in housing market stories, suggests Sandra Sellani, author of What’s Your Brand Quotient? (W Business Books, 2007). Cost: Free
Create individual URLs for properties. Being able to showcase a property on a Web site during a listing presentation is bound to impress prospects, Rossi says. Use the sites to post property photos and community information and to help persuade sellers to use your services. Cost: Free until the site is published on the Internet, then $50 for the year with Agencylogic.com
Note: Prices listed are estimates and vary greatly depending on location.
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