(This is Part 2 in a four-part series. See Part 1, Part 3 and Part 4.)
Do you have what it takes to successfully compete against billion-dollar competitors who want a piece of your local market? You can beat the big guys at their own game if you understand the simple rules of engagement.
Last week’s article looked at creating a three-level business plan to cope with market shifts. A plan, however, is not enough. You must have a proven strategy that allows you to compete with stiff competition from big companies.
Shifting Market Strategy No. 2: Become a Guerilla Marketer
In today’s shifting real estate market, our competition is no longer just the brokerage down the street. Individual agents and brokerages now compete against companies that have huge Web marketing budgets, who understand the intricacies of successful Web marketing, as well as the dynamics of profitability. Furthermore, companies such as HomeGain, House Values and Lending Tree have a five- to seven-year head start in terms of understanding the dynamics of Web marketing. They also have substantial budgets that allow them to be in virtually every major market at the top of most major real estate searches. The way to compete in this new hyper-competitive environment is to niche your business and to use guerilla-marketing strategies.
In “Marketing Warfare” (2005), Ries and Trout illustrate how small companies or individuals can successfully compete against well-funded giants. They point out that big companies cannot and will not compete for small pieces of the market. The key to beating the big guys at their own game is to carve out a very narrow market niche and then to own that niche. Guerilla marketing is about being number one in a small market segment rather than trying to be everything to everyone.
One of the key shifts to make is to move your marketing budget from print to the Web. While agents and brokerages still spend over 80 percent of their marketing dollars in print advertising, the amount of business derived from print advertising is approximately 8 percent. While it is too expensive to compete for search terms such as “Austin real estate” or “Beverly Hills homes,” very few people are competing for search terms based upon specific geographical names or niches. Big companies typically compete for search-engine terms such as “Seattle homes for sale” or “Seattle real estate.” The perceptive agent or brokerage will market for specific subdivisions or for specific niches within their service area. For example, use your print advertising to drive traffic to your Web site with terms such as “PacificHeightsViewProperties.com” or “WestlakeGolfHomes.com.” Repeated print advertising, including mailings to these subdivisions, will reinforce the fact that you are the specialist for that area. Furthermore, people are more likely to find you on the Web by using the subdivision name rather than trying to remember your name or the name of your company.
A second guerilla marketing strategy is to niche your business based upon the languages spoken in your area. In 2007, 60 percent of all transactions will be with immigrants and minorities. The Spanish-speaking real estate market still remains relatively untapped. A simple way to attract this market is to advertise, “Se habla Espanol” (Spanish is spoken). While this is an obvious market, what about groups who speak other languages? For example, there may be only 300 or 400 people in a community who speak Russian or Vietnamese, but catering to the needs of these groups will generate long-term, sustainable business. Marketing in both English and the languages in which you are fluent is a sure way to create a successful niche that will let you survive a market downturn.
Another way to guerilla market is to provide premium service. When making the biggest purchase of their lives, most people want to feel special. You can distinguish yourself from all competitors by providing a higher level of service than your competitors provide. For example, when you prepare for an open house, bring fresh flowers, bake fresh chocolate chip cookies, and have fresh lemonade. Use a CD brochure in addition to a beautiful color handout. Invite neighbors by knocking on their door and giving them a printed invitation plus the property brochure. Offer your open house visitors a gift in “MyHomeManagementClub.com” to say thank you for attending. When you work with buyers, take the time to interview them about how they live, where they spend the most time in their home, as well as what matters to their kids. If they have pets, be sure to learn the pets’ names. In some cases, where “Fluffy” sleeps and lives may be the most important factor influencing the sale. Your goal is to provide the personal connection and service that your competitors do not provide.
Ultimately, guerilla marketing involves digging deep into a niche and owning it. Rather than trying to be generalist who provides all services to all groups, you can survive market shifts by being unique, connecting with your clients, and providing a memorable customer service experience.
Want more tips for surviving market shifts? If so, see next week’s article.
Bernice Ross, co-owner of Realestatecoach.com, has written a new book, “Waging War on Real Estate’s Discounters,” available online. She can be reached at bernice@realestatecoach.com.
