Real estate marketing and leads: a rent-vs.-own analysis
Letters From the Home FrontWarning: This column includes words such as “lead,” “convert” and “prospect,” and, as such, may not be suitable for all audiences — particularly those who remember that there is a real, live person tethered to the end of the real estate transaction.
“You vill buy zee ad!” said my account executive. Suddenly overcome with a sense of unease, I pictured a shadowy, underworld figure who just might have access to weapons of mass destruction — like my mother-in-law’s turkey meatloaf.
“I will buy the ad or what?” I thought. My business will vaporize? I will live out my golden years in a miserable vortex of anonymity? The hostages will die?
Ah, the advertising conundrum. There are an ever-increasing number of opportunities to promote my services and my brand — opportunities that are expanding exponentially while my advertising budget is sadly somewhat finite.
So, on a daily basis, I have to consider where I am spending and whether my investment would be better off redirected. And if we are to believe the sales pitches, we have a second choice: just spend more.
“If you convert just one lead in the next year, you will have paid for the (whatever it is I am trying to sell you),” they explain slowly and patiently, just in case I was a liberal arts major.
And while that may be true, if I bought into every opportunity I was offered with the expectation that I would enjoy that one extra conversion this year as a result, I would be closing approximately 946 escrows a year, which I am not.
My most recent call to action was from a company that has a well-trafficked site on which I currently advertise. I have been buying a sidebar ad there for nearly two years. Like many sites, this one offers the carrot of exclusivity: for sale are the rights to “impressions,” and I can pay for all or a part of a ZIP code. Two years ago, I committed to the whole enchilada.
What inspired the call was a “limited time” opportunity for me to buy another ad for this same ZIP code on another, partner site. “Buy this other ad, and you will double your exposure!” I was told. And while I explained that my budget didn’t allow for an additional commitment of a four-figure-a-year magnitude, the shadowy figure re-emerged.
“You vill buy zee ad!” he said. “If you don’t, we will sell it to a competitor.”
“Argh!” I thought. “A competitor!” There is nothing like playing the law of scarcity card to get my attention. And then I remembered: They don’t own this ZIP code. They don’t own any ZIP codes. What they own is this channel. Rather, what they own is market share on this particular channel.
I was reminded of the calls I have been getting from a print marketing firm in my area recently. They, too, have recognized the power of the law of scarcity. In their case, they automate the monthly mailing of brochures to a ZIP code.
If you claim the area, no one else can have it. “If you convert one prospect, you will have paid for this!” they read from the script. The problem, again, is that they don’t own the ZIP code, nor do they own the bulk-mail counter at the post office, the mailboxes in my neighborhood, or the only print shop in town.
Unless you are insanely wealthy or enjoy some serious venture capital, you are probably like me. You have to make decisions every day about how and where you direct your limited bucket of marketing money.
It’s a dynamic process; as the opportunities multiply and the numbers of channels increase, we find ourselves in a constant state of evaluation and re-evaluation.
And as you find yourself considering your options to woo a prospect, buy that lead, and hopefully nail that conversion, consider this: Do you own the channel or are you just renting a room?
My account manager had more in his arsenal this day than the promise of exclusivity or, rather, the threat of exclusion. Having rented my space on this site for awhile now, it was time to renegotiate my lease.
Finally, the ransom note was delivered: “Buy the new ad, and your current rates on the old ad will be locked in for six months.”
ME: If I don’t?
ACCOUNT MANAGER: Your rates could go up.
ACCOUNT MANAGER: I can’t say.
ME: By how much?
ACCOUNT MANAGER: I can’t say. (Whispering) But it could be as much as (multiply current rate by 3.5).”
Recognizing that their client loyalty program was a little weak, I also recognized that this is their business and their right.
They have been steadily increasing traffic to their site since the early days when I initially placed my security deposit, thereby increasing potential value to me — the recipient of prospects and leads. Why shouldn’t that come with a price tag?
This left me to consider my return on investment. As I was reminded by my landlord that they had sent me “some really juicy leads” and, with all the contacts I had been sent, it must be lucrative since they “know how good (I) must be at working Internet leads,” I considered those leads. You see, I am the one who must ultimately “convert.”
Last month, I had seven “live ones” delivered to me. One was a past client who had relocated out-of-area five years ago and wanted to know what his home would have been worth today. One pinged twice asking for showings but never returned my calls or e-mails.
Another wanted to know if the property was for rent (he had seen it on Craigslist), and another just needed to vent about another agent’s listing (“Hate, hate, hate the decorating … Good luck selling this one!”). You get the idea.
Years ago, I received a comment on my own blog about a post on the marketing conundrum. I dust it off every time I am in a resource allocation quandary: “Focus or you will spend a lot for nothing. Honestly, Johnson & Johnson taught me a lot about this stuff. You only think of one baby shampoo, don’t you?
“Research the expense of using channels that target your market. What you might want to do is write down all of the channels you can use to target the market and then shop for pricing. Know this — today everyone is gray and unless you ‘hijack’ a certain channel, no one will notice you.
“Example: Placing your advertisement on 20 buses around the city won’t do you any good. Placing your ad on all buses in the city will work. Not because more people will see it, but because that one person will see it many times and with each time they’ll show more and more interest.”
The bus-ad analogy tends to support my online partner’s argument and business model save for one thing — make that two things: People buy baby shampoo every day. People buy homes every seven years or so.
More to point, there’s no rent control where third-party online channels are concerned. If you build brand recognition organically, through a killer website or through blogging or other social media activities, you own it.
If you are the neighborhood rock star because your yard signs are more ubiquitous than beanies at a bar mitzvah, you sponsor high-profile community events, you mail your message consistently, or the way in which you conduct your business (through promoting and advertising your listings or serving your clients) tends to create a grassroots buzz, you own it.
When you are a paid guest, not so much.
This brings me back to my predicament. As I explained to my account representative, my advertising commitment pencils at my current rate. At the new-and-improved, triple-secret “maybe” rate, it probably doesn’t.
This leaves me with two choices:
1. I can rip the bandage off now in anticipation of being priced out of this product, or
2. I can stand pat and wait for the eviction notice.
I chose the latter. And that is when, safely albeit temporarily back in the fold, the other shoe dropped.
“You know, if you send your clients to our site to (well, do this thing, but if I told you, that would give it away), you will increase your leads!” he offered.
Hmm. Let me think about this. I have received notice that my rates could be nearly quadrupling because your traffic has grown so dramatically. Now, you are asking me to send you more traffic so I can get more traffic so you can …
For the record, I wasn’t a liberal arts major. I can do the math. This is really a circular argument. And I know that if my lease is terminated, there are tens of thousands of other potential tenants out there, many of whom may have deeper pockets or may boast better conversion skills. I am replaceable.
In the meantime, I will be sponsoring a community fair where I will get to visit with thousands of people who see my yard signs and know my work. And I will continue to participate in goofy, archaic print marketing activities, including the mailing of listing brochures and advertising in a local community newsletter.
I will even write occasionally on my small-time blog that gets hundreds, not thousands, of visitors a day. But they are visitors that count. These things, I can own.via inman.com