[quote_box_center]“Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.” – John Wanamaker[/quote_box_center]
When asked by a new seller if I intend to advertise their listing, I always said yes, though completely at my discretion. Unless I judged the property worthy, I didn’t usually promise print promotion. Why?
The primary purpose of expensive advertising is general call generation. If I felt a print ad wouldn’t produce sufficient calls to justify the expense, I would advertise another listing that would, and switch the caller to their listing. Some properties just don’t have what it takes to motivate ad reviewers. If you feel the house is unsuitable, don’t waste your money. Let’s call this method “ad and switch”.
Even during print newspaper’s heyday, I refused to rely on them. Aside from the internet, I usually got a better response from direct mailers and personal contact with my own client network and farm area. (Such marketing methods are legally restricted nowadays due to so-called privacy legislation, though I’m still inundated with calls from companies wanting to clean my ducts.) And I improved the odds by habitually asking for referrals. Whenever I placed a newspaper ad, it was often for one of three reasons; to promote myself, to appease a seller or as a last-ditch and usually futile attempt to generate prospects.
Tell your sellers you’ll certainly promote their listing on multiple internet websites and via a lawn sign, open house and office window display and verbally through your personal business network. If you offer a clear explanation – and your seller trusts you – you’ll have no problem. After all, who’s the professional?
Don’t assume your new seller understands the workings of our industry. You might have to explain that most sales result from our incredible MLS system – by far the best advertising venue – where virtually all buyers begin their property search. When a sold sign appears, chances are the home was sold by a co-operating brokerage. Explain that agents don’t search the newspapers for property to show; they peruse our proprietary MLS database and consider any suitable listing, from any brokerage.
Some agents advertise their listings in newspapers by way of small classified ads, while others resort to regular personally branded display ads. The humongous advertisers, though, are just fishing for listings and legitimately focus mainly on that end of the business. Sometimes, they refuse to even work with buyers, instead delegating callers to junior agents or team members.
Homeowners who mistakenly believe that it’s advertising that sells homes are often attracted to big advertisers, believing they’ll receive superior marketing service. They might indeed, but not necessarily, since it depends on how they define superior. As a matter of policy, some big volume producers anticipate expired listings, chalking them up as acceptable losses, and may not have the time for regular personal contact with their numerous clients.
The fact remains that, to my knowledge, there’s no official correlation between promotional dollars spent and a successful sale. Since buyers aren’t normally duped, if the property isn’t properly prepared and/or priced correctly, no amount of advertising will move it. If you’re legitimately trying to generate buyer prospects, however, intelligent selective advertising in a property-appropriate venue can produce good results.
What’s your commission generation ratio between buyer sales and listings sold? My practice was usually 70/30 favouring buyers. I normally preferred to work with buyers, but early on, I realized that listings are a great buyer generator. (This may change soon if we’re no longer permitted to double-end our own listings. Why invest the time, effort and expense into holding open houses, or even to advertise them, if not to fulfill our responsibility to our seller clients who’ve placed their trust in us to sell their property?)
List to last, they said, or don’t be listless. Consequently, I usually spent about a third of my time prospecting for listings and two-thirds on buyers. Not only did lawn signs, open houses and internet inquiries create buyers, but my sellers became loyal buyers too. And rarely did any of my listings expire unsold. I personally sold real estate and wasn’t just a listing agent who sat around waiting for an offer (though, once again, this may change shortly after our government alters how we operate). Prospect for listings and buyers will knock at your door – and without spending a dime in the newspaper.
In the next column, I’ll offer ideas on how to enhance your advertising’s prospect-to-client conversion ratio.