jami mullikin

The only guarantee we have about marketing in today’s real estate climate is change. The market has changed. The buyer has changed. Will it ever change back and if so will we market the same way? I am not sure and do not intend to make any grand projections other than the pendulum swings in both directions and God is not making any more dirt. So my assumption is like most cycles, these tough times will change. And marketing has and will continue to change with it.

So where does that actually leave us today? It leaves us working harder and expecting less.
It leaves us reevaluating the products we develop and how we market them. We are back to the basics of asking ourselves what needs does the market have and how can we serve them? And how will we fill the need better than our competition? And, oh yeah, how does the internet come into play?

I always start with this guiding principal when determining a product’s position: Good, fast, cheap, you get two out of three. Good being a quality product. Fast being exceptional service. And cheap being a price leader. With a combination of any two you can create an effective value proposition. With all three you are trying to be all things to all people and will ultimately serve no one.

In the past, resort real estate development was driven by a developer’s vision for a great piece of property and desire to create a grand lifestyle. A place for people to love and cherish. A place they would bring their friends and family. And often a place envisioned and created without understanding if it filled a need in the market. Not all, but many, ended up being monuments of opulence and irrational splendor that served a narrow market of extreme wealth and “ego ownership”.

In the current market there are buyers, believe it or not. These buyers are the ones who serve as the shepherds to the sheep that ultimately pull the trend back. These shepherds are driven by ideals and philosophies that are deeply rooted in their generational up bringing. They are the boomers, but not the boomers we saw in droves signing reservations in tent city. These shepherds are conservative individuals who are prudent and pragmatic. They are far more calculating and much less impulsive. As much as they can afford the lavish, they are not going to be looking for their fourth McMansion. They are not ones that follow trends but are the ones that quietly create them. They are what we call the “know me” wealth, not the “show me “ wealth. Unless you know these individuals personally, you would never pick them out of the crowd. They are private. They are discerning. And they are wealthy. Very wealthy.

So what are they looking for? Probably the same attributes they found when they bought their Toyota Avalon or F150. They want quality, reliability and value. They are utilitarian. Yet they enjoy acceptable luxuries. They are natural researches and moved by trust and connections. When the time is right they will have been planning for years and will be armed with far more knowledge than you are. They will be looking for a quality product without empty promises or future guarantees. This will lead them to established communities with reputable leadership. They will see right through your marketing façade and will cut to the chase about being in control of the process.

So how do we change our marketing strategy?

For starters, marketing starts with the product. Provide a product that meets a market need. Do research, talk to your peers and listen to what the market tells you. Then decide if you are good, fast or cheap. My prediction is people will want a smaller, more modest product by a credible company and they will not want to wait for it. They will want built product or resale inventory more than homesites and they have no desire to be first so throw the reservations out the window, urgency is gone. They just want to feel comfortable with their purchase and believe they own a solid product at a fair price, hence the Toyota Avalon. They are not looking for market approval and will buy what they want, when they want despite the negative media coverage.

Additionally, their habits have changed. They are going to want information with substance and if you do not have it they will move on. And they will move on to the next web site as well. Studies have shown that these buyers are no longer tech laggards and research their purchase decisions online. Additionally, they will trust a stranger’s review online far more than your own paid marketing efforts (by 82% according to a 11/08 McCann Survey). Many of these buyers are starting their efforts with online search and your Web site alone is no longer enough. You need a comprehensive strategy to distribute your content online with what we call Digital Presence. A strategy that leverages all of your content as well as the content provided by others. You can’t stop others from mentioning you in blogs or posting wedding and hole-in-one videos on youtube so you better become a part of the off-site conversation as well.

So has the market changed marketing? Absolutely. And if you think the internet will not play a factor with your demographic then don’t change a thing and let me know how that works for you.

I have seen a trend in our discussions in the past few months with many people in many industries. It usually starts with a conversation about marketing on a shoestring budget or how to market to be ahead of the curve as things begin to turn. I think regardless of industry, and specifically in real estate, you need to pay close attention to the relationships that you have at hand and stay in front of them as much as possible. It is far more economical to turn prospects into customers than it is to create new prospects, so your existing database should be a primary focus during these slower times. And while you’re at it, why not take the time to review your processes and make sure that your data has the utmost integrity and can be fully leveraged as things begin to turn. After all, we create the worst habits during the best of times so now may be time to hunker down and really get your processes refined and your data cleaned up.

Regardless of the strength of your CRM system, it is critical to understand that the people involved in the process will be the key factor in the integrity and accuracy of the data the system provides. We ask our clients to make sure that all parties involved hold the integrity of the data to the highest priority. Without accurate data, the accuracy of our system is flawed.

So here are six easy buckets of information that you need to be collecting.

1. Contact Information.
Yes, it seems obvious but do you have a standard for what a prospect actually is? It may vary depending on your industry, but I see two potential scenarios that I call soft info and hard info. And I like giving the prospect the choice.

A. Soft Information – First name, last name, email address and zip code. This is if you are building an e-marketing database and mainly capturing data online. The first three are obvious but many people overlook geography. Asking someone for their zip code is really not that intrusive and can tell you a lot about where your prospects are coming from.
B. Hard Information – First name, last name, and physical address. This may seem old school, but having physical mailing addresses is still very valuable. Especially if you are in any form of B2C marketing. The insights that you can gain about your database by having their address is huge, especially if you have a longer acquisition cycle. And notice I did not say phone number and email. Those are nice but change far more frequently, so addresses are still as good as gold.

2. Referring Campaign.
How did you hear about us? The dreaded question that many marketers are afraid to ask so they place a blank field on the Web site hoping that prospects will fill it in. Well, they won’t. Unless, you make it required. Which I think is ok if you gave the option to complete the “Soft Information” only. If they are opting to give you more information anyway, then they will probably understand that they may be “surveyed” a little. I recommend a pull down menu in alphabetical order by campaign type with all active campaigns listed. I recommend category (newspaper) and detail (Wall Street Journal) in a well-organized list. Here is an example:

(Pull down menu)
Direct Mail: Postcard
Direct Mail: Letter
Editorial: Atlanta Homes and Lifestyles
Editorial: Atlanta Journal Constitution
Magazine: Our State
Magazine: Robb Report
Newspaper: Charlotte Observer
Newspaper: USA Today
Newspaper: Wall Street Journal
Radio: XM Radio
Referral: Existing Customer
Referral: Friend
Trade Show: LiveSouth

I see this less as information overload and more of an opportunity to give the prospect a confidence boost in your brand by seeing that you really are marketing, despite the hard times. And please, no catch all options like “internet” or “other”. That just gives them an out.

3. Relationships.
Your database may have several different constituents, not just prospects and customers. So I recommend that you leverage your CRM to manage target audiences with segmentation. For example, here are a few relationships if you are selling a real estate community:

Advocate –banker, politician, vendor, etc.
Broker – cooperating real estate broker or realtor
Builder – potential home builder
Employee – community employee or partner
Owner – current resident
Owner Pending – Currently under contract
Previous Owner – not a current resident but was in the past
Prospect – marketing prospect
Suspect – you acquired their name, but they did not inquire with you specifically

4. Lead Type.
Many people track lead type as a campaign. But in reality how you heard about them does not mean the same thing as how they heard about you. So if the best customer ever just walks in your door that is not a necessarily a walk-in campaign. You may find that they were told by the restaurant down the street that you were exactly who they needed to talk to so technically that is a Referral Campaign that came in the form of a Walk-in.

Here are a few examples of lead types:

Agent: A sales agent identifies the lead through their own resources.

Email: They have inquired for information through the internet or over email.

Mail: They have inquired for information through a business reply card (BRC).

Phone-In: They have inquired for information by calling the Sales Office or one of your agents directly.

Walk-In or Retail: They stopped by your Sales Office inquiring about information.

5. Qualifying Grade or Rank.
Lead qualifying is usually subjective and most often done on a whim by a sales agent based purely on qualitative information. However, a simple, self-explanatory qualifying process should provide the most efficient way to gage the quality of prospects in your database and level the playing field with all agents using the same terminology.

We have found that the best qualifying data is the expected time frame to the first conversion in your process. So if your acquisition process is get a lead, book an appointment, then create the sale, we recommend tracking the first step: How long until we can get an appointment. Here are some examples:

Grade A: an appointment in less than 3 months
Grade B: an appointment in 3-6 months
Grade C: an appointment in 6-12 months
Grade D: an appointment in 12+ months (depending on your acquisition cycle, this could be the most important group)

Grade N (New): A lead that has been assigned to an agent but the agent has not successfully made contact with them.

Grade U (Unsuccessful): If you make multiple (3 or more) attempts to contact a NEW lead and are unsuccessful, use the U status until you make a successful contact and then reassign the status accordingly. This should not be used to park prospects, U prospects are still active and should be contacted regularly.

OPT OUT: Only used if a prospect specifically requests not to be contacted in the future. This is not to be used if the prospect has been disqualified by the agent for any reason, or cannot be successfully contacted.

DEAD: This prospect has been disqualified or expressed no interest. There is no potential for this prospect to purchase in the future. Use OPT OUT if the person requests to be removed from the database.

6. Actions.
No prospect should be sitting idle. After every touch you should have an automated action that either books your next call, sends an email, drops a note, or sets a tickler for a later date. This is THE single most overlooked detail in your sales agents’ conversion process. We have found that upwards of 75% of databases never get touched after the initial inquiry and it can take 15-20 attempts to make a successful conversion in your process. The numbers do not lie; no sales professional can manually work 100 or more contacts effectively without an automated CRM.

After doing database marketing for almost 15 years as both a marketer and a telemarketer, I can tell you that it is a numbers game. The more attempts, the more results. And the better your data, the better your return on your future efforts. It will be the brands that had frequency and relevance during the down-economy that are the first to swing back with the market. So going dark now may seal your fate. We recommend getting a plan today that creates the proper operational procedures for your most valuable asset, your existing prospects, and creates regular touchpoints through multiple channels: online, email, direct mail, whatever may be most appropriate for your audience. Hope this helps.

We have a client that has had great success in 2008 selling real estate in Boone, NC. Usually people are suspect of the numbers and think that Echota must be doing something like huge discounts or some secret incentive program. The reality is that their secret is staying positive, having a good product for the right market and continuing to spend marketing dollars. And when I asked Mark Harrill, the developer of Echota, how he became the most successful community in North Carolina in 2008 he told me "2008 success started in 2001 by listening to what the market wanted." You see Mark never set out to build a monument to himself or make gazillions to have the lavish lifestyle of his developer peers. He wanted to create a special place for the largest segment in the market. A place that people would love, want to own and want to keep coming back to. Have they seen a slowdown, yes, but who wouldn't settle for only 92 closings in 2008 at higher prices than his 107 in 2007 or 187 in 2006. And oh yeah, he did 2 contracts in the first 8 days of 2009. A few of Mark's beliefs in this market:

• A prospect today is not a "sheep" and needs attention immediately and their bravery needs to be openly recognized. He often asks people why they want to buy when the world tells them not to and then congratulates them on their independence and intelligence.
• No bad news in the office. He and his sales VP, Will Sears, set a policy that stated sharing bad new was only allowed between 10-11 am. Get your day started, if you have bad news get it out at 10 and by lunch be over it and recover positive for a strong afternoon.
• What is he doing personally to cope with the market? Mark says, "When times are tough, do what you know. All I know is real estate so I am fortunately in a position to look for great buys. So that is what I am doing." I also recall Mark telling me that with his success his belief is that he "...I feel like I could have anything but I desire nothing more."

I think we could all learn some lessons from Mark, his pragmatic insights, and others like him. And I knew that there had to be other people that would want to hear his success and share theirs so I posted a question on this week on LinkedIn.com and sure enough, good news came pooring in. Here are some answers to "Is there any good news in real estate?" (you can view it here on LinkedIn) Karen Goodman wrote: I had a great year in 2008. My best year ever since I got into real estate in 2001. Homes are selling in St. Louis. This week 2 homes that my buyers were considering sold before they wrote contracts and one of my homes just got 3 contracts on it in the last few days. Liz Schultz wrote: We are also seeing an increase in calls, showings, sales, etc. in Boston and Rhode Island. So, despite the media I think people are finally realizing that now is the time to buy and there are many deals out there. If anyone has any money to invest, they should do it now. We all know real estate is cyclical and the only way is UP! So anyone who invests now will make money in the long run. All the agents in my area are expecting a very active spring market despite media reports! Daphene Norwood wrote: I am a relatively new Realtor in the North Atlanta Metro area. Since the 1st of the year, I have 3 pending deals. People are receiving financing, contrary to everything broadcasted in the media and great deals are available. Remember, real estate markets are extremely localized. Location is key! Craig Grove wrote: Well relative to my region (South Texas), there was some encouraging news in the "Brownsville Herald" today regarding the state of housing down here. It seems our home values have decreased only about .95% compared to 10% nationally (I am quoting the paper's stats), and they seem to be holding. Cynthia Watson wrote: As a residential Real Estate sales agent in the St. Louis, Mo. area, I have been having success with an increase in showings to Buyer clients looking to make a move within the first quarter of 09! I'm constantly reminding Buyers that this is their time for awesome opportunities like no other! Roger Johnson wrote: As to successes, here in Hickory, NC and surrounding, business has picked up, too, though we didn't have a big drop-off either (at least not by the numbers). Of course, we benefit from both Boone and Asheville, as we have several sells that come from people that looked at those markets, then visited us where they can buy much cheaper compared, but still with mountain views. Frederick Elix Brown wrote: I've got three clients under contract within a week......and i've started servicing section 8 and other NYS housing programs Sally Outlaw wrote: I'm a broker in both North Carolina (south of Asheville) and Jupiter, Florida and I see increased activity too - in both markets...more showings & sales - which is odd over the winter. A lot of investors looking & buying here in Florida as the deals are pretty amazing...properties selling well below original developer pricing when product was new so this is finally bringing people back to the table. Heather Lord wrote: Spoke with a new home construction site agent who wrote 5 contracts this past weekend... Also a home builder who wrote 7 contracts for brand new semi custom homes in December... Not everyone is waiting for the tempting - 4.5% loan rate we keep reading about... First time homebuyers this is your hour - should be a daily chant. Thanks for all the great answers and let's keep sharing the Good News, post yours on LinkedIn here. Oh yeah, another great reason for Echota's success is the views are phenominal from everywhere. Check them out at http://www.echotanc.com A morning view north over Valle Crusis, NC as we were driving through Echota to breakfast.