Real Estate Marketing

Problems that Occur When Implementing the Marketing Concept

1) There is no excuse for an agent not to get a name, address, and phone number before ending a call with a prospect. 2) When agents don't keep in contact with past clients. 3) Lack of evaluating the changing market. 4) Customers waiting to be recognized in the office or the number of times the telephone rings before someone answers 5) Long time kept on hold. 6) The buyer isn't qualified and they may feel that the agent didn't do enough to help them get qualified. 7) Agents take listings without any idea of the demographics of larger segments of the total market or how to access them. 8) Agents are not taking the time to determine what changes are taking place in the market.

Three Market Segmentations

1. Demographic segmentation: Age; Income; Gender; Family life cycle; Marital Status; and Career Fields 2. Geographic segmentation: Population Locations; Residence Locations; Climate; and Regional Preferences. 3. Psychographic segmentation: Lifestyles; Needs; Motives; and Attitudes and Perceptions

Steps Used to Identity the Target Market

1. Identify and describe the subgroup. 2. Estimate the size of the subgroup. 3. Evaluate the accessibility to the subgroup.

Overheated Economy

A condition that occurs when the supply of goods (e.g., houses, commercial buildings, usable land, components of construction) and services cannot keep up with the demand for them.

Market Research

A data-gathering process that helps agents make marketing decisions that reduce risk, save time, and save money. This research helps identify opportunities, customer needs, channels of distribution, strengths and weaknesses of the company and its competitors, pricing strategies and their impact on the market, and other information agents need to make decisions. Market research is only half the equation. Data analysis and conclusions, complete much of the preliminary work that needs to be done before developing the four marketing strategies that result in a sale.

Web Counters

A device that adds up the amount of hits a website receives. The web counter may also provide answers to the following questions: Where are your visitors located? How many hits does your site get each day, week, month, and year? Which of your content pages gets the most visitors? Which search engines do your visitors use most often? What keywords do your visitors enter into their searches? There are many websites that offer counters. Choose one based on service, need, and cost.

Customer Orientation

A focus on customer needs. Agents who are customer oriented identify the needs of groups of buyers, sellers, or other agents. This is the essence of the marketing concept. Customer needs consist of both property needs that are known to the prospects and emotional needs that may or may not be immediately known to the prospects. Agents familiar with this determine needs before listing property and establish needs before showing existing listings.

Target Market

A large segment of the market with similar commonalities that may react in a similar way to promotional stimuli.

Home Page

A salesperson's home page should have basic information about the salesperson and the services offered. It should include appropriate company data. A salesperson's contact information and company should be on every page of the site.

Search Engine Optimization (SEO)

A strategy for improving the visibility of a website in search engines, often through the use of keywords. One way is through unpaid search results, but other forms of search engine marketing use paid listings. In general, the earlier and more frequently a site appears in a list of results from a search engine, the more visitors it will receive.

Web Browser

A web or internet browser is a computer software application for accessing information on the web, including webpages, images, videos, or other types of resources. Hyperlinks allow users to navigate web browsers to related resources.

Maslow's Hierarchy of Needs

Abraham Maslow's hierarchy of needs helps agents draw conclusions about the general needs of the market. Although the following is not an exhaustive study of Maslow's theory, it provides a basis on which agents can develop an understanding of needs and how they might be incorporated into their marketing and selling efforts.

Stage 3: Social/belongingness needs

Acceptance by family and friends; belongs to groups and clubs and conforms to the standards of others Marketing Strategy: Point out places of worship, entertainment areas, golf courses and country clubs, and schools in the community.

Open Market Operations

Actions that provide a generally successful way of controlling the money supply through the purchase or sale of government securities.

Marketing Era

Agents in the marketing era look at the customers' needs and either match them to existing listings in the marketplace or list properties that match the customers' needs. They understand that these needs are constantly changing and modify their marketing efforts accordingly. It does the marketer little good, for example, to overprice a home best suited for a golfing enthusiast and then promote it in a magazine read by fantasy football players. Not only was the price out of balance, but the distribution channel used to promote the property was inappropriate for the target market. Agents should note that the seller's motivation to do something differs from the buyer's. Consequently, the marketing strategy may need to be different for each. When agents work with sellers, they market only their services as competent, well-informed real estate professionals. When agents work with buyers, they market their services and a seller's property. In both situations, the agent is responsible for delivering what the customer wants.

Property Specializations

Agents may want to specialize in one of these specific types of real estate: Single-family homes High-rises Commercial property Condominiums Multifamily residential units Manufactured home parks Business opportunities Shopping centers

Services Utility Definition

Agents provide services utility when they deliver the information necessary for customers to make decisions. Agents must have a working knowledge of the inventory, financing, real estate laws, marketing, and more, and be able to convey their knowledge to customers in a format that customers can understand.

Self-Assessment

Agents should conduct a semiannual or annual evaluation of themselves. If you were the customer, how would you evaluate your services? When you walk into your office, what is the first thing you see on your desk? Is it a stack of unfinished paperwork or the organized desk of an executive? Observe how the support staff greets your customers because this affects how prospects perceive your professionalism. Are your listings priced within the target market's affordability range? Do you have the kinds of listings and locations that are demanded by your target market? Do you depend on the listings of other agencies?

Customer Oriented Agents

Agents who are customer oriented identify the needs of groups of buyers, sellers, or other agents. These consist of both property needs that are known to the prospects and emotional needs that may or may not be known to them.

Sales Era

American manufacturers and retailers experienced greater inventory surpluses during the 1930s and even into the 1950s. After the tumultuous Great Depression, consumers rebuilt their savings and weighed their discretionary purchase decisions carefully. Selling the excess inventory proved difficult during this period, in what was called the sales era of marketing.

Goal Orientation

Applying time management skills that help attain both personal and professional goals. This helps save time and potentially generates more sales. It also helps agents reach their production goals and the goals of their customers.

Form Utility

Are the materials available to build my home? Is the supply of concrete and lumber affected by overseas demand? Am I able to get the acreage I need to create my custom home development?

Cheap Market Research

Becoming familiar with the office inventory Participating in the tours that view office listings Attending open houses Learning about specific geographic areas Steps for Market Research: 1. Defining the problem 2. Gathering and organizing data 3. Analyzing data and drawing conclusions

Time Utility

Can I receive transfer within 30 days? Can I find the property I want within the next few days? How quickly can I get through the permit process? When can I break ground? How long must I wait before I am qualified for a loan? Can my new construction home be available within 150 days?

Services Utility

Can I trust this agent to give me the information I need? Can I trust the information the agent gives me? How experienced is this office in satisfying the needs of its customers? Will the agent be able to help me or will the agent hurt me in the long run?

Comparative Market Analysis (CMA)

Completing a Comparative Market Analysis by hand is so archaic that it is barely acceptable in the real estate industry. Computers have made this task easier and faster than in the past. Software can pull data directly from MLS databases and manipulate that data into a professional CMA. The cost of this type of software has dropped enough to make it accessible to any real estate professional. Also, some database management software has the CMA capability built in. The fewer programs a salesperson has to use, the better.

Summary of Findings

Conclusions drawn from the data analysis phase that break down into a few sentences or paragraphs the limits of an agent's resources, time, and money, and how best to take advantage of the opportunities available. A summary of findings may identify what agents are currently doing and compare those results to the needs of each group. A summary identifies how agents satisfy each target market's service needs and compares that to competitors. A summary also analyzes the weaknesses of competitors and finds ways to take advantage of them. Using their analysis, agents draw conclusions and form opinions about their markets. Data analysis offers agents the opportunity to list the properties that meet the needs of their target market, the agent's personality, and the constraints of their economic environment.

Primary Data

Data that is collected and used for specific research projects. It is time consuming and often expensive to collect. However, agents conduct an inexpensive form of collection when they meet with prospects to conduct their qualifying interviews.

Mission Statement

Development of a mission statement is one of the first steps major corporations take toward creating a marketing strategy. If agents had a missions statement, the statement would organize and define how they approach their market, what they specialize in, and why they are practicing professionals in the industry.

Performance

Doing what you say you will do and doing it in a timely manner. For example, if an agency's promotional campaign states that the office is open at 8:00 am, then someone should be in the office answering the phones at 8:00 am. If prospects call at 8:00 am and are connected to the office answering machine, then the agency is not delivering on its promise of performance.

Domain Name

Domain names identify websites. They are formed by the rules and procedures of the Domain Name System (DNS). Free hosting services provide website addresses, but they are not typically professional because they are not clear and are usually long and cumbersome. People find it difficult to type or remember long addresses. No one remembers long addresses. The best URLs are a person's name or business name.

Segmentation

During the segmentation process, agents group people by the characteristics they have in common, such as age, income, lifestyle, and their motivations to purchase. Marketers in all industries use the commonalities of group segmentation or target marketing to create marketing mixes that influence purchase decisions. Agents who tap into this reservoir of information find that they can adjust the marketing mix on a single listing to make it attractive to multiple target markets. The result is higher productivity from their marketing mix strategies.

Time Management

Effectively prioritizing tasks and employing skills, experience, and education to complete those tasks. Prioritizing the most important issues involves the establishment of personal and professional goals. Market research and analysis is another example of employing time management skills.

Follow-Up

Follow-up is a marketing and sales process that occurs before, during, and after a sale. By staying in contact with prospects, agents demonstrate their interests in the prospects' needs. This improves the company image.

Components of a Professional Website

Home Page Properties for Sale Area and Community Information Electronic Form Extras

Possession Utility

How do I know the seller really owns this property? Do I qualify for a loan of this size? What is the Fed going to do to interest rates?

Marketing Concept

Identifying customer needs and developing a product to meet those needs. This takes into account the needs of consumers when agents develop their personal and professional goals, list property, or develop the services they offer.

Product

In real estate, the product an agent has to market is either property or service.

Place Utility

Is the property located where I want it? Do I have access to the main road? Is shopping and recreation convenient? What are the locations of the local schools?

The Four P's (The Marketing Mix)

It's difficult to succeed in the long term without marketing skills. To that extent, individual real estate salespeople must act much like corporate marketing managers by controlling the four elements of the marketing mix (the four Ps): Product (listings/services) Promotion (advertising, personal selling, publicity, and sales promotions) Price (for listings/services) Place (distribution strategy)

Buyer's Remorse Pill

Many agents employ the use of a "buyer's remorse pill." These "pills" are usually pieces of candy. A spice rack might be used for your "pharmacy." Fill it with the little breath mints that come in the small clear box containers. Stock a variety of different colored mints (green, orange, and white). Each container should have a label that identifies its contents. If there is a little tension before signing the offer, give the clients a green breath mint ("pre-buyer's remorse pill"). This often helps break the tension. After the signing, talk for a while, but before they leave, give them an orange breath mint ("buyer's remorse pill"). Tell them to keep that pill until later and take it when they wake up at 2:00 am wondering whether they made a mistake. Tell them that the pill will remind them of all the reasons for the purchase. (This also may avert a call to the agent in the middle of the night.) The white breath mints are used as "forget-me-not pills", in case a prospect isn't quite ready to buy. Some agents like having forget-me-not flowers delivered to the prospect's home. Anything that will keep the agent's name in the prospect's mind will do.

Psychographic Segmentation

Offers agents a powerful tool in both marketing and sales because it discovers how values and needs motivate people.

Database

One of the most valuable business assets a real estate salesperson can have is a database. The days of index cards in a box are over. That may still work, but it is an outdated and inefficient system. Access to a computer is a must for a salesperson, and that computer should have a software program for database management. It's not as important which database management software the salesperson chooses as long as the software is easy to operate. The minimum requirements of a database include the following: Data (client) input Ability to place in groups Ability to market to a specific group Ability to search Ability to tag for follow-up Ability to access by smartphone

Differentiated Market

One that is made up of different recognizable segments that can be attracted by creating multiple marketing mixes.

Demographic Segmentation

Organizes the entire market by multiple factors including age, income, gender, occupation, family life cycle, education, and household size.

Geographic Segmentation

Organizes the total market by the political makeup, population density and migration, and actual location of property within a geographic area.

Internalists

People that do things based on experience and who are not necessarily influenced by the opinions of others.

Externalists

People that try to conform to or impress the outside environment.

Place

Place involves the easy transfer of the property from the seller to the buyer.

Stage 4: Self-esteem needs

Prestige, sense of self-worth, success, accomplishment Marketing Strategy: Wants to help others as well as impress others; very status oriented. Properties should reflect these goals; must look good.

Price

Price is the value placed on the property or services rendered.

Promotion

Promotion consists of four activities: advertising, publicity, sales promotion, and personal selling. The promotional mix uses both long-term and short-term activities to influence and encourage customers to call or visit real estate offices. Personal selling is considered a short-term activity; publicity, sales promotion, and advertising are considered long-term activities within a promotional strategy.

Advantages of Building Your Own Website

Saves time Saves money Can be updated or modified easily Can be a fun and rewarding experience

Stage 2: Safety Needs

Security, guarantees, warranties, return policies, order and stability, insurance Marketing Strategy: Demonstrate smoke detectors, warranty plans, security systems, deadbolts, owning their own home, and well-maintained property.

Stage 5: Self-actualization

Self-fulfillment; a feeling that you are doing what you were meant to do, using your talents to their fullest Marketing Strategy: Enjoys sports, education, cultural events, cooking, and other hobbies. Property selections should inspire these activities.

Incentives

Something used to encourage prospects to make one decision over another.

SWOT Analysis

Strengths Weaknesses Opportunities Threats

Systems Orientation

Successfully operating multiple tasks without conflict.

Data Analysis

Taking raw, seemingly unrelated data from the market research phase and reorganizing it into meaningful groups of data from which conclusions may be drawn.

Transactional File Management

The ability to manage a transaction from inception to completion and beyond. The minimum requirements of transactional file management are the following: Ability to track a transaction Ability to use the data for tax purposes Ability to access the data from remote places

Stage 1: Physiological Needs

The basic human needs for good health, food, medicine, exercise, fresh air, safe drinking water, shelter, and clothing. Marketing Strategy: Promote open space, fresh air, and watertight roof.

Marketing Mix

The combination of the right product or service at the right time, given the right promotion through the best channels of distribution that produces a buyer that is ready, willing, and able to buy your product or service.

Motivators for Real Estate Prospects

The desire to make new friends in a new neighborhood Precision and craftsmanship The recognition for one's success and accomplishments The ability to control the final look of the home A house design that saves time

Defining the Problem

The first step in market research. By asking probing and relevant questions of themselves or their prospects, agents move closer to defining the problem, which gives them a better opportunity to solve it.

HyperText Transfer Protocol (HTTP)

The foundation for communication on the internet. It is the protocol for websites to request and deliver information from web servers.

Federal Reserve (the Fed)

The institution that regulates the banking system within the United States. The Fed controls the supply of money in the marketplace and influences the direction of interest rates. By watching what it does, agents can better predict how thrift institutions will react with regard to credit requirements and loan rates.

Discount Rate

The interest rate charged to member banks when they borrow money directly from the Federal Reserve.

Reserve Requirements

The percentage of funds held in bank reserves that is unavailable for transactions (e.g., loans or withdrawals). The Fed sets this percentage.

Gatekeeper

The person who controls the information that helps the decider make a purchase decision. For instance, suppose the agent calls the prospects and informs the wife that the property the couple saw that morning just had a small price reduction. The wife says she will talk it over with her husband; however, the agent doesn't get a call back. It's possible that the wife didn't pass along the information to the husband because she was not interested in purchasing that property. By controlling the information received from the agent and not passing it along, the wife plays the role of the gatekeeper.

Influencer

The person who helps persuade the decision maker to make the purchase. They often play a strong role in the final purchase decision by manipulating or persuading the decider to take a certain course of action. In real estate, influencers include the children, relatives, friends, or spouse of the decider. However, influencers can easily include the media and agents.

Decider

The person who makes the purchase decision. The decider considers information received from the buyer, the users, the gatekeeper, and others before making that final decision. Discovering the final decision maker is critical for a successful sale.

User

The person who uses the property.

Buyer

The person with the credit or cash needed to make the purchase.

Motivation

The reason to act. In real estate, motivation is that hot button in a prospect that, once discovered, provides agents with the information needed to help prospects take action.

Secondary Data

The result of research studies done by the government or private enterprise. In other words, the data was originally collected for a different research project; however, much of the data can be applied to other projects. Examples of Secondary Data: Utility companies Statistical abstracts of the United States Almanacs Trade association reports, magazines, and journals Title companies Chamber of commerce studies Voter registration University/college research publications Religious organizations Newspapers/magazines Marketing journals Proprietary multiple listing records

Gathering and Organizing Data

The second step of market research. Agents must find and collect data that is relevant to solving the research problem. Research methods used to gather data often include the following: Mail surveys Email surveys Telephone surveys Observational studies Experiments Samplings

Family Life Cycle

The stages that people go through in their lifetime. These stages generally include singles, couples, and parents.

Web Server

The web server has a large disk capacity for accessing a volume of files for a large number of users. A web server can be referred to as either the hardware (the computer) or the software (the computer application) that helps to deliver content that can be uploaded or accessed through the internet.

Properties for Sale

The website should have a section with properties for sale with prices, features and benefits, photos, virtual tours, and a locator map or link to a map.

Area and Community Information

The website should include schools, shopping centers, places of worship, demographics, major thoroughfares, and local amenities. This information can be shown as content the salesperson provides or as links to other websites.

Electronic Form

The website should provide an electronic form that consumers can submit to receive community, housing, school, or additional information. The site should not demand information from consumers. You will have a better response rate if you design your site to ask only for names and email addresses, and state that the information will remain confidential and will not be shared with anyone.

Five Customer Roles

User Buyer Influencer Gatekeeper Decider

Website Address

Users access a website through its "address," which is technically known as its universal resource locater (URL). Here is an example of a URL: http://www.includeyournamehere.com.

Web Traffic (Hits)

Web traffic includes all data sent and received by visitors to a website. Web traffic is measured by hits, or by the number of visitors and the number of pages they visit. Websites may monitor incoming and outgoing traffic to see which parts or pages of a site are most popular and whether there are any apparent trends that indicate preference by a specific group of people. There are many ways to monitor this traffic, and the gathered data can be used to help structure sites, highlight security problems, or indicate new marketing strategies upon which a real estate salesperson could capitalize.

Website Architecture

Website architecture describes the design and planning of websites through various aesthetic and functional criteria. Creating an ideal website requires attention to other web content, a company's business plan, general usability, interaction, and overall web design. A website needs to be well designed to ease navigation and to quickly load pages. The information desired by the salesperson's target audience needs to be accurate and thorough. You should plan the site architecture before you begin to create your website. Determine your goals for the site and what your concept will be. Site concept is the overall theme and purpose of a website. A salesperson needs to remember that people search the internet looking for information. A website must be driven by the following two factors: Good-quality, useful information that is of interest to a broad group of people is provided. Content can be found easily and quickly. Most people will not keep searching, looking at every site. Most stop after the first few listings. If they do not find what they are looking for, they change their search keywords and try again. It is critical for a salesperson's site to be one of the first listed or at least among those on the first page.

The purpose of a marketing research project may be to determine the answers to some or all of the following questions:

What is the market's direction (interest rates, the economy, sales, etc.)? What are the missed opportunities in the current marketplace? What are the strengths and weaknesses of the company or the agent? What are the strengths and weaknesses of the competition? How do I take advantage of my competitors' weaknesses? What are the external threats facing me or the agency? What is the most effective advertising and promotional campaign given my current goals, budgetary constraints, and market conditions? What is the size of my specific target market? What is the accessibility of the target market? Within the stated target market, what motivates the prospects to act? What are the geographic locations and prices for listings best suited to the target market? What services are demanded by the target market? What are the demographics and psychographics of the marketplace? How do I best promote my services? What are the meaningful differences in the services offered (when compared to the competition) and the listings acquired? What will be our pricing strategy and how will it be promoted? What will be the appearance of my promotion and distribution strategy?

Personal Selling

a marketing term meaning that two or more parties interact directly. These interactions are usually face to face; however, other methods are possible.

Effective Marketing

addresses the multiple needs of the prospect. For a buyer, it provides a useful property: in the right location; at the right price; and at the right time. Effective marketing also addresses the seller's needs. It combines an understanding of economic market, the marketing mix, and the total product to create a marketing strategy that results in the sale of the property in the most efficient manner. An effective marketing plan brings a property to market with the right mix of promotion, pricing, and distribution strategies.

Real Estate Marketing

balances a mix of activities, which serves two functions. The first, and more common, function results in both attracting prospects to agents and creating a sale that meets the personal needs of prospects. The second function may not necessarily result in a sale, but it increases the reputation of the agent or agency. Professional marketers carefully research their environment. After analyzing the research data, marketers balance the issues of property selection with service and product pricing. Marketers must consider the strategies that distribute information to the public, as well as coordinate their promotional efforts. The promotional strategy provides a mix of communication efforts that include advertising, public relations, and sales promotion, which are forms of nonpersonal selling. The best-known element in a promotional strategy is personal selling, or salesmanship. The result of a successful marketing strategy is customers sitting in front of agents who can then apply their salesmanship skills. The sale is the result of a successful marketing campaign.

Time Utility Definition

calls for an adequate number of listings in inventory that are attractive to the largest market segments. Like most people, buyers want what they want when they want it, usually right now. In general, customers lack the knowledge or experience in how real estate transactions work, which is a big problem for agents.

Channel of Distribution

describe how the message is distributed to the public.

Utility

describes the usefulness of products or services.

Research helps...

identify opportunities, customer needs, channels of distribution, and the strengths and weaknesses of the company and its competition.

Place Utility Definition

making products available in convenient locations.

Form Utility Definition

measures the usefulness of the product.

Analysis

reorganizes the data so that conclusions may be drawn. The analysis confirms that interest rates are increasing and have done so on a regular basis for the past 18 months. For every 0.5% increase in the interest rate, the affordability index drops by 8%. This means that fewer people can afford the higher interest rate or the higher price of homes on the market. As the number of people who cannot afford a single-family residence increases, the opportunities that appear suggest an increased need for multifamily residential units or other rental housing. The potential for foreclosures increases as adjustable-rate mortgages become less manageable for some borrowers.

Possession Utility Definition

requires that: the property be deliverable, the buyer be able to buy, and money be available and at reasonable rates.

Conclusions

state a course of action.

Digital File Storage

the ability to store documents on a disk, flash drive, or in cloud storage to remove the need for paper. This may not be something for a salesperson but is valuable to a broker.

Exogenous Shocks

the environment that is outside the control of agents may provide both opportunities and threats to agents' success