Posts Tagged ‘Advertising’
Are Real Estate Agents Obsolete?
I’ve met with a number of Real Estate Agents and Broker’s the past few months and I’m not surprised they view Social Media as a waste of time. Don’t get me wrong, I have found a few that get it, they have taken the risk and setup virtual offices and even opened accounts with FaceBook & Twitter. Some use these Social networks well and some just say they use them effectively, my research here in Canada reveals that most aren’t practicing what they preach.
I’ve made recommendations and suggested radical approaches to how an agent prospects and wastes a huge amount of time with tire kickers at open house events. They look at me with those puppy eyes and say I couldn’t do that, I don’t know how, that sounds like too much work. I think it’s harder the way they do things now, but they’re stuck! If you’re an agent or a broker that’s been in the industry longer than 10 years, you may have a tougher time making the paradigm shift. I’m not saying you can’t or don’t have the ability, but I am saying if you don’t, life is going to get very interesting when the new tech savvy up and comers produce at a high level with a very different kind of effort. How will you compete and survive?
Let me give you an example of one thing you could do and have fun doing it. I’ll look at the old school traditional agent first, then the new tech savvy agent.
Old School Agent
The old school agent would sit on the phone rounding up prospects for hours on end, then would set up 4 or 5 walk abouts and even a few open house events two weekends in a row. A lot of time and effort goes into this type of selling, hard work is important but with today’s technology why would you do this? Organizing and worrying about how may or may not show up, worse yet, having to go and pick them to ensure you do have a prospect. Getting flier’s out and setting up sign’s, the list goes on. The advertising costs can be staggering too, time spent networking, convincing people they should come and see this house and so on.
The New Tech Savvy Agent
The new tech savvy agent sits at the desk and decides which homes to work on this week, then prepares how they would sell the dream of the home on video. This agent goes out and buys a Flip MinoHD Camcorder 2nd Generation
This new agent let’s the prospect qualify themselves and let’s them contact him or her when they’re ready, this agent is thinking about the prospect not themselves.
As you can see the new tech savvy agent takes a different risk, invests their time giving what prospects want and then makes it ridiculously easy for them. The prospect that calls the new tech savvy agent back just qualified themselves, less work than the old school way of handling the same task. This is just one opportunity to start making the shift to Real Estate Selling with Social Media, if you don’t take baby steps now and don’t learn how to do some of these techie things. I have to wonder if Real Estate Brokers won’t become obsolete, Broker / Owners at some point will figure out they can handle inventory in a less complicated way. By the way, people complicate things not flip cams and iPhones.
Are Real Estate Agents Obsolete? Maybe not yet, and maybe not all, but more than you think.
Return On Investment Selling
In July I wrote an article for you called, ” Your Break Even Point “. The premise was to help you calculate that number and for you to have a better understanding as to why you might be loosing money everyday and not know why. Your business depends on you knowing! I mean it’s not something real obvious because it’s kind of hidden, if you don’t have the right indicators in front of you everyday you won’t see it. Hopefully you were able to figure out what those indicators might be and you are monitoring them daily. I’ll assume you’ve done that because next I want to walk you through an advertising slash marketing concept with you.
Years ago when I was selling Radio Advertising we used a thing called Return On Investment Selling, it was an education and very interesting. The program was to show how you would be able to pay for a new ad campaign and make money too! Yep, pay for the advertising and make your desired ROI, sounds to good to be true right? Well….yes & no. Let me lay out a scenario and we’ll walk through this together, I think you will find it most interesting.
I’ll change the names and places to protect the innocent, just kidding. I’m going to take you through a simple Growth Objectives equation and an Investment Analysis so you can understand the number at the end when I’m finished. Oh, and the Forward Slash ( / ) means Divide By in my equations if I don’t use the ÷ Symbol, I thought I should clear that up right upfront 🙂
Let’s pick a market, let’s say you are in the furniture business and the Market Potential was say 5 Million Dollars. That means 5 Million Dollars in business is being done in the Market your business operates in. Lets keep it simple and say you have a present Gross Sales figure of $500,000. That means you have a 10% market share. But you want to realize a growth objective of $100,000 out of your market, what kind of additional penetration do you need to achieve your goal? You would need 2.2% more, here’s how I figured it out:
100,000 ÷ 5,000,000 – 500,000 = 100,000 ÷ 4,500,000 = .022 x 100 = 2.2 (actually 2.222222)
If you’re struggling with the equation, get your calculator out and punch it up. It works.
So now we know the Penetration needed to reach a $100,000 Growth Objective in your Furniture market. Next I’ll break down how many customers or prospects it will take per day to achieve your goal of One Hundred Thousand Dollars.
To make this equation work we will need to know a few things first before it will work. We need to know what the average customer worth is in your store, how much each customer spends in your store. We also need to know what your closing ratio is, a great way to see how well your sales staff produces I might add.
For the purposes of this exercise I’ll use an average customer worth of $1,000 and a closing ratio of 40%. That will keep the numbers easy to work with. The equation is somewhat simple, I’ll try to lay it out that way.
$100,000 / $1,000 = 100
Growth Objective / Avg. Customer Worth = Additional Customers Needed
100 / 40% = 250
Additional Cust. Needed / Closing Ratio = Additional Prospects Needed
250 / 312 = .08
Additional Prospects Needed / # of Selling Days (Days Open) = # of Prospects per day
Is the number of prospects needed realistic? Yes No
This is only part of the equation, this merely tells you how many prospects per day you would need above and beyond you current customer base over the course of one year or 312 business days.
OK, we now know what the daily number is, but it still doesn’t tell us what the additional Gross Profit is going to be. Well, if your Growth Objective is $100,000 we now need to multiply it by the Average Gross Margin. Let’s use a simple number and one that might be realistic, let’s use 25%. Using our numbers from above this is how the equations looks:
$100,000 x 25% = $25,000
Growth Objective x Avg. Gross Margin = Additional Gross Profit
So in order to achieve the additional gross profit of $25,000 you were going to need to make $100,000 more (above and beyond) in business over the next year. We figured out how many new prospects / customers it would take to hit that number (0.8 per day) and we felt it was realistic. Now, what kind of ROI did you want to achieve, I’ll assume you wanted 100%! You want to make $100,000 in additional business which would give you an additional gross profit of $25,000 and you want a return of 100%, right?
The question begs to be asked…..HOW?
Well, obviously you would have to do something different than you have been doing to achieve that fine 10% market share. You want to grab 2.2% more of that market right? That means you have to do something above and beyond what you are already doing in your advertising efforts. You WILL have to put more advertising dollars into achieving your goal of 12.2% Market Penetration, your $100,000 Growth Objective and put the additional $25,000 Gross profit in your pocket.
The ROI I’m talking about is what you have to spend in additional advertising dollars to make it happen. You are probably asking yourself how you figure out how much to invest in advertising dollars. the Investment Analysis is quite simple. Here’s the equation:
Desired ROI is 100%
$25,000 / 1 + 1 = $12,500
Gross Profit / Desired ROI as a Decimal (1 + 1) = Maximum Additional Advertising Investment
25,000 ÷ 2
So, you want to get 100% of your advertising investment back, you will spend $12,500 in new advertising dollars plus make $12,500.
You will Invest $12,500 in additional advertising to realize the Growth Objective of $100,000 in additional revenues that will produce and directly impact your bottom line by an additional $25,000. Cool & achievable based on the above numbers.
The above is an over simplified view, achieving a market share growth of 2.2% on top of the already acquired 10% market share is not easy, the numbers don’t tell the whole story. Now you still have to go through the process of doing the creative, copy, layout and cross promotional stuff but now you an idea in advance the hill or mountain you may have to climb.
I hope this helps you when you get the notion to grab more market share, do your homework and crunch the numbers. You will have a much better picture and it will allow you to enjoy the process of achieving it. Keep this in mind the next time your advertising sales rep wants to up sell you. If you want more real gross profit you will invest to get it, it’s a fact of life. Just make sure it fits your goals, think with the end in mind and work hard to reach it.
Until next Time.
Localize Your Social Media Marketing
What is considered successful marketing using Social Media Networks, is it how much money you made, how popular you are, how many hits your site(s) get? Many think Social Media is just being a good Internet Marketer, not so. There is this thought process of “looking out there” rather than looking in your own backyard in the Social Media World. Why is that? Is it merely thinking big or is it Ego, I think the later has a lot to do with it, we all want our 15 minutes of fame and this is the easiest way to get it.
The old saying, ” Think Globally, Act Locally” is the right approach regardless of the grandeur or weblebrity that might come from all the marketing efforts you expedite in these Social Media Networks. The Internet is the vehicle and Social Media is the platform of choice to deliver your opinion, to be heard, and too be seen! Video is now the rage within the Social Media Networks, be seen and heard is socially acceptable!
So how do you apply these Social Media Networks to a local way of doing business? If print is dead, what options do traditional businesses have in a tangible way to market their business. To quote Guy Kawasaki – ”Advertising is when you tell people how great you are. PR is when someone else says how great you are.”
Print ads have a life span of a day and a half, Radio & Television is a frequency problem and direct mail is a low ROI challenge, what should you do? You have to mass mail or run HIGH rotations of ads, you can spend more money producing no or low results the traditional way. The bigger problem isn’t the vehicle as much as the way business owners think! Old thought processes and methods are written in stone in the walls of their brains, making it very difficult to see the value in Social Media Networks.
Mike Wesely of Twittalk.tv during one of his shows suggested that building the relationship first is paramount, this will build trust which will allow you to influence those who follow you. This trust, like face-to-face relationships, takes time to develop so be patient and care about people. I had the privilege of speaking with Mike on the phone and I can tell you Mike loves people and truly wants to help people with Twitter. You can follow Mike on Twitter @mike_wesely and attend his Twittalk.tv Show for free.
Branding is the BUZZ word these days and frankly should be in traditional forms of making your business or product be top of mind. So, nothings really changed just the method has, the glue, the difference, is and always has been in the relationship. We have become markets of Social Circles that depend on knowing that its safe to buy or deal with a person or business. But most of us just want to belong and be in a safe fun place. Hang on, is that new? We as a people have always been like that, we are creatures of habits.
Now I’m really confused, if nothings changed then why has everything changed? The principles remain the same and have to be applied to every social market, only the methods have changed, not the principles of how and why people buy. So Think Globally and Act Locally helps me communicate to my target market or niche in a more accurate way. By the way, the original phrase “Think Global, Act Local” first appears in the book “The Evolution of Cities” (1915) by Scots Planner and social activist Patrick Geddes.
The world of business has not changed all that much, much of what you do to sell goods and products will continue, you will however add new ways of marketing. The principles of marketing will remain the same but your methods will change, this is going to be determined by where the largest flow of traffic is going not too mention where the greatest pool (demographic) of dollars resides.
You should and will have interaction with people at some level, so you will influence (sell) someone to get them to do what you want. Social Media Networks are best used in your PR efforts, not in advertising programs. No matter what you do, improve and be the best you you can be, because today’s markets are becoming very personal. I hope the shift to a more Social environment will make it possible for everyone to realize their dreams. Don’t forget your community for the sake of reaching the world, localize your Social Media Networks to serve your business and above all, care for your customers no matter where they reside.
Twitter The Social Media Network Gone Wild!
Social Media Networks are popping up everywhere and no one can stop them! Today it’s clear Twitter is taking the world by storm and is one of the most effective ways to generate traffic to a website, not to mention it’s FREE! Twitter is projected to surpass Facebook and many others as the Social Network of choice. I’ve been using Twitter everyday since December 26th,2008 and I can tell you some of the sharpest minds on the Internet are there and they will follow you if you offer value to the community. Value is measured in many ways on Twitter, like Blogs content is king, find good information, helpful information, develop a reputation as a sound resource, plus, be a great person and you’ll create a large following.
Like many of these Social Media Networks, information is what most are looking for, how to articles and where to find that nugget that can help you be a better you or improve your companies branding. Twitter is the most instant messaging platform with mass appeal, the branding tool of choice and considered a secret weapon by many who use it.
The most common Social Networks to date look like Facebook, Digg, My Space and LinkedIn just to name a few, but none respond faster than Twitter! I’ve helped a number of entrepreneurs and small businesses get started with Twitter and have shown them the value of leveraging the other networks with Twitter. Why not make them all work for you? The phenomenon of Social Media Networks is just starting to realize it’s power by adding value to the market place, whether it in B2B or simple membership environments. It’s getting harder and harder to hide and easier to brand your product(s) and yourself with the power of Twitter.To learn how Social Media Networks can increase awareness, brand a product, increase traffic and develop a revenue stream, send a message to socialmedia@owengreaves.com with your request.
Come join the Social Media Marketing Gone Wild phenomenon. Join Twitter and follow me.
How are you using Twitter, leave a comment and share your experiences.
Internet Marketing & Advertising Are Too Confusing To Small Business Owners
I have come to the conclusion that the online world has forgotten how to connect with small business owners. Talking in terms of impressions, traffic, page views and links just doesn’t compute. The small business owner doesn’t care about those events unless it means increasing revenue, they’ll make more money from it. Yes they are indicators and bench marks to determine if online efforts are paying off but the real truth is in the cash draw at the end of the day. For small business owners to understand all this jargon you need to keep it simple, dummy it down so to speak.
I recently met with a small business owner and they could care less about what all that stuff meant, they want to improve business that’s it that’s all. More sales, more traffic through the doors, more traffic to their website that they spent a pile of money on. Because at night when they go to bed they are thinking about how to pay the hydro bill, the phone bill and their staff. The problem is still the same even with Internet. Why is it that Internet Marketer’s think the problem changes just because it’s the Internet? Oh, to make it more confusing, there appears to be different types of Internet Marketers!
Granted, a well thought out marketing strategy should include an online presence and a good advertising program, but, the Internet is only one part of it not the end all answer. Cross promotion, making sure your websites address is on all correspondence, letterhead, business cards and the like. You bet!
That business owner told me that all the jargon was too confusing not to mention being told how it all worked! It could be that the person selling the online presence is not looking at the problem from the same side of the table as the potential client. Looking at it as a transaction instead of genuinely wanting to help, to help solve the problem, to sit in the same boat and go on the journey with them. If you did, you would find the client much more open to your suggestions, why, because they will feel you have something to lose too.
Keep it simple stupid (KISS) still rings in my ears, help your clients get there by joining them on the journey. I know you think I’m assuming all marketers are doing the same thing, but when you hear the same story everyday from small business owners you have to wonder what’s up.
Online Marketing is different, it’s not the same as traditional advertising even though the results might be the same. Take the time to help them understand, show them how simple it can be and stop trying to sound so smart because you get it. And if it’s possible, help them and yourself identify the different types of Internet Marketers there are in the world.
I had to share this with you today because it was frustrating to hear another story as to why their online presence was a negative experience, they felt stupid because the person selling didn’t take the time care for them.
Care for your clients and tell the truth, the rewards are great for all parties involved.
