In this entry, we’ll use statistical data and real world examples to take an in-depth look at just how critical it has become in the digital era for agencies to employ relevant and effective marketing strategies to aid in the sale of a client’s property. When the day comes for you to list your next home or commercial building, you will be able to use the insight gained from this article to make a more informed decision, not one solely based on getting “the best agent” available. At some point, it could be the deciding factor between extracting the maximum value possible on a sale or losing thousands of dollars and months of your time.
Our Digital World: The Real Estate Industry At A Glance
Every year, the rate of American consumers opting to shop online versus going to a physical store, continues to climb. It should come as no surprise that this trend has made a huge impact on the real estate market as well. According to a recent study by the National Association of Realtors, 9 out of every 10 buyers rely on the web when looking for a home. Not only are online home searches on the rise, but for 52% of buyers, it has become their first choice. In 2012 alone, online real estate searches in the U.S. went up by 300% from the previous year. Due to this shift in consumer behavior, competitive standards within the real estate industry have rapidly increased to meet the growing demand of online based shoppers.
Today, any real estate agency that wants to stay relevant must be able to do the following two things, and do them correctly:
- Provide a full, easy-to-use property search function on their website
- Employ a complex strategy of (digital heavy) marketing techniques to attract unique viewers to their online locations (we will come back to this)
Unfortunately, many firms which are either unwilling or unable to adapt, do not execute these key services effectively and continue to fall behind. While it certainly hurts business, it’s the client that ultimately pays the price.
Picking The “Right” Agent Should Include Picking The “Right” Firm
As we all know, finding the right agent to represent you is a crucial component of selling your home. It doesn’t matter whether you pick an agent based off the recommendation of a friend, or you spend hours online researching the top agents in your area; at the end of the day you’re going to want to find an agent that’s professional, knowledgable and works actively to seek out buyers for your property. (For more information on the key characteristics of a reliable broker, you can find our full discussion on the topic here)
While a quality agent is critical to client success, finding the “right agent” is only half the battle. Even if you’re working with an agent that looks fantastic on paper and the property that you are listing is absolutely breathtaking, these two factors alone will do little to ensure a successful sale. What’s the missing ingredient you ask? The short answer is a firm that employs effective digital marketing strategies, but to understand why, let’s first consider the following:
There are two key truths in regard to agents and agencies:
- Real estate agents are by definition, representatives of the agency itself
- An agent can only be of limited use to a client without a solid base of information and tools at their disposal
What do we mean by this?
Real estate agents and the firms they work under, are joined together by a mutually beneficial relationship. The agent agrees to share a percentage of their commissions with the firm and in exchange, the firm grants the agent access to a variety of resources which help the agent maximize their business, i.e (a personal workspace, conference rooms to meet with clients, the agent’s name displayed on the firm website, advertising/marketing dollars driving prospects to their listings etc.) All of these resources are essential to agent’s success and can be very costly if they wish to pay for it out of pocket, therefore, all agents rely on the firm to cover these expenses and provide the services for them. While most firms will provide some level of resources, many firms provide no marketing for their agents at all and are left to handle it all themselves.
Why Digital Marketing Matters
As you will see shortly, of all the services provided to agents by a firm, the efforts put toward marketing/advertising is by far the most essential. The reason is simple; marketing is hands down, the best way for firms to attract prospective buyers and sellers, without it, generating business would be nearly impossible. The ultimate goal of a firm is to achieve the highest level of exposure for their client’s property as possible.
In practice, this will maximize the opportunities of finding a buyer willing to purchase a property at the client’s desired selling price; it’s a matter of simple supply and demand. In the past, real estate firms relied on traditional market methods such as post cards, magazines, signs and billboards. While these methods still hold some value, shifting the attention towards digital outlets appears to be the most logical long term approach. When properly executed, online marketing can be used to reach thousands more viewers per campaign, with higher concentrations of interested buyers, at a fraction of the cost of traditional media. Giving more exposure to a property means more potential buyers, which in turn, will increase a client’s negotiating power on the sales price of the home.
Instead of just taking our word for it, lets turn our direction to some key statistics pulled from a major joint study, conducted between Google and The National Association of Realtors in 2012:
- 89% of home shoppers use their smart phones to conduct their property research
- 47% of first time home buyers used the internet to purchase a home
- 77% of first time home buyers drove by a home that they looked at online
- 75% of senior home buyers go online to search for a home
- 93% of vacation home shoppers used the internet to search for a home
- 56% of vacation home buyers started their search online
- 48% of home shoppers used their phone to get directions to a listing
- 44% of home shoppers used their phone to compare prices
- 28% of smart phone shoppers contacted an agent directly after their search
- 21% of smart phone shoppers contacted a brokerage directly after their search
- 54% of all shoppers registered on major real estate websites are age 40+
These statistics are just the tip of the iceberg, but you should already be starting to see how impactful online marketing has become in recent years. If these figures tell us anything, its that the trend does not seem to show any signs of slowing down.
Not All Marketing Strategies Are Created Equal
So now that you have seen some actual data, the next step is to understand what exactly goes into a digital marketing strategy and how companies cant set themselves apart. Most firms will tell you they have an online presence, but without knowing what their core competencies are, it impossible to know whether they are efficient or effective.
Here a few key questions you will want to know about the firm:
- Do they have a modern, easy to use website, but more importantly, is it frequently updated?
- Are they active on social media?
- Do they do any online advertising, or are they focused solely on traditional (mail, billboards, magazines, etc.)
- If so, what kinds?
- If so, are they outsourcing, or do they have an internal team?
The last question on that list is by far the most important. If you’re looking for a firm which will be able to maximize your property’s exposure to potential buyers, this is absolutely critical. While outsourcing is a very common method for real estate firms lacking the technical know-how , relying on it alone is a very risky choice. Think for a moment, why would you want to put a complete stranger with no personal knowledge of your target market in charge of resonating with your customer base? How can someone with no understanding of the area you live in, or what makes it a great location, possibly attract the right people to your property? When you ask yourself these questions and keep a home buyer’s perspective in mind, the picture starts to become very clear.
If you need proof, we ourselves are a perfect example of what can happen when you go from relying on an entirely outsourced digital marketing strategy to incorporating an internal team; which is exactly what we did in 2015. Looking at the chart below, you will see the difference in our total annual property sales dollars and how these numbers changed over the 2012 season to the 2015 season.
Results and Review
Between the 2014 and 2015 season alone, the year we incorporated an internal digital marketing team, there was a 60.62% increase in total annual home sales, leading to our record year. This year we continue to see that trend moving upward. In the end, it is our customers who benefit the most from our efforts, with an increase in property exposure to potential buyers to maximize the sales price of their home and get it sold as quickly as possible. Our personal goal is to continue to provide the best service possible to our clients and stay in the forefront of industry best practices.
For more information on market trends, you can find the full National Association of Realtors study here.