Being the "marketing guy" as a real estate professional in your market has its unique advantages. First off, let me clarify what I mean by that. I'm referring to a time where I was about 4-5 months into generating my own leads for my mortgage business, generating some leads for real estate agents (terrible idea by the way, don't do that), and geeking out on Facebook algorithms and organic social media marketing. Why does that matter? Because now I run a marketing company, and I don't want LOs to think that they shouldn't go out and brand themselves as the "marketing guy" just because they have no intention of running a marketing company someday, or don't feel like they know enough. Remember: you don't have to know everything. You just have to know more than the people you're teaching.
But I digress.
One of the advantages of being a "marketing guy" is that real estate agents love to divulge their deepest darkest marketing secrets with you. They usually have different motivations for this ranging from seeking honest feedback to wanting to put their expertise and knowledge on display for someone who will appreciate it. I learned much more about marketing from interviewing top agents in my market than I have from any book or course I've ever taken.
One of the most profound lessons I learned, I didn't actually learn it from the agent who's lesson it was to teach, I learned it through multiple of his competitors.
The first time I heard this agent's monthly Google Adwords bill, I just about shit a brick. I know now that the $50k+ he's spending on leads for his team is not as uncommon as you would think, but at the time it baffled me. I began asking questions about this competitor to any agent who seemed like they may know more about his come-up, hoping to figure out more about his operation and the efficiency of it.
What I uncovered shocked me even more.
Not only was this guy spending $50k+ on self-generated leads for his team every month, but his lead cost wasn't that great and he didn't really seem to care to improve it. At least that's what it looked like from the outside looking in. I talked to multiple real estate agents who knew all about the latest and greatest CRMs that manage your ad budget and generate leads for you (think: Boomtown, CINC, RealGeeks, REW), and yet they weren't scaling it to the level that this guy was. So what was his secret?
This guy was spending indiscriminately. He monitored his metrics, yes, but the most important thing was that he had insane consistency. Most agents/LOs tie their marketing budget to how much they made last month. This guy didn't seem to care about last month, he spent based on what he wanted to make next month.
Easy to say for a guy who makes enough to spend $50k on ads right?
Here's the funny thing about that: everyone I talked to about this agent seemed to agree that the timeline for this agent getting big was from the beginning to the depths of the recession.
While it may not have been $50k+ per month at the time, this agent spent and spent during the recession, and it wasn't until things started to warm up again in our market that his competition realized that he had grabbed up a huge chunk of online market share in the form of being able to spend big on ads, and dominating SEO.
Use Your Marketing Strategically In a Down Market to Grab Market Share
If you know me, you know I love Grant Cardone and the 10x Rule. Don't get me wrong, I know he's intense. Sometimes that's just what we need though, right?
Grant Cardone talks about this concept in his books. Essentially, the idea is that in a down market everyone else is retracting their spending on marketing and trying to "survive." This creates a perfect opportunity for a business who is willing to continue to invest in marketing (even if it's not ROI positive right away), to use that marketing and the experience delivered to the customers they ARE able to get to create even more opportunities down the road.
Think about it: Anytime you've seen a down market in the mortgage industry (or any industry you've been a part of for that matter), does everybody fail? Or does it seem like there are a select few that are thriving while everyone else is hurting desperately for business? Now look back and see if you can remember whether or not those that succeeded seemed to be cutting back or expanding their current marketing?
It's easy to dismiss this as a discrepancy between cause and effect; after all, of course, the companies that were making money had money to reinvest in marketing right? But what got them there in the first place? If you trace it back, I bet you'll find that the companies you're thinking of slowed down for a couple months just like everyone else. Then, you'll most likely find that while everyone else cut their marketing budgets, the companies that found success either maintained or increased theirs.
Don't Just Take My Word For It
I run a marketing/lead generation company for loan officers. Obviously, as you should always, consider the source of the information you're receiving and take it with a grain of salt. At the same time, if what I'm saying isn't resonating and you haven't read the 10x Rule by Grant Cardone yet, drop what you're doing and go buy it. Even still though, there are plenty of "gurus" that have no idea what they're talking about.
George Amissah and Udih Money both have PhDs and are professors abroad who published a study called "Marketing During and After Recession" for the International Journal of Business and Social Science in September of 2015. If you'd like more background on this, and are a geek like me, then check out the published study at this link:
In it they break down marketing budgets of companies who failed and thrived through historical recessions and ultimately arrive at the same conclusion I've left you with:
If you want to succeed in a contracting market, you need to be willing to maintain, if not increase your marketing budget. Doing so can result in massive shifts in market share that carry on once the market is healthy again.
Most LOs have never effectively managed a marketing budget to the point of being able to measure a positive ROI. This is a HUGE problem and why we see such a high turnover in our industry. If you're one of these LOs, and want to protect yourself against the coming market contractions, pick a time on my calendar for your LIVE demo of our service, and I promise you won't be disappointed.
Thanks for reading, and I'll see you at the top!