By Bill Miles, EVP Connecting Neighbors
RISMEDIA, Oct. 27, 2007-Are you wasting thousands of marketing dollars a year? Every year real estate professionals throw away valuable marketing dollars trying to reach too broad of an audience. How can you make the most of your marketing efforts?
Niche marketing is the process of focusing on a defined segment of a much larger market. Within the real estate industry there are thousands of different niche markets a real estate professional can identify and serve.
Take for example, a specific neighborhood, vacation homes, first time home-buyers, buyers or sellers who speak Spanish or senior citizens. Over the years, thousands of agents have been successful pursuing some type of niche marketing strategy. But why are they successful? Why does this type of marketing work well in real estate?
First, there are plenty of niche markets to choose from. There are literally thousands of underserved niche markets within real estate and more developing every day. A market is underserved if its needs are not being sufficiently catered to by the currently available service providers.
Consider a 5-year old neighborhood sixty miles from downtown Dallas. While Company ABC markets to this community and 10 agents from other local offices send generic postcards or flyers to these residents, the messages from these sources are being disregarded because they fail to deliver anything of value, interest or relevance for the readers.
Compare that to an agent targeting that neighborhood specifically. Through marketing and interaction, the agent can highlight their specific knowledge, including home prices in the neighborhood, commute times to downtown, the local job market, quality of the schools, and several other topics relevant to that niche market. Whose messages are going to get through more effectively to this market: the general marketing themes or those focused specifically on what’s relevant to the resident – their neighborhood? As you begin to think about the underserved areas of the real estate market, you will realize there are hundreds of potential niche markets right outside your office door.
Secondly, consumer behavior rewards a niche focus strategy. According to the 2006 National Association of Realtors Survey of Home Buyers and Sellers, 85% of consumers will only consider one or two Realtors before deciding who to work with. Thus, you must market yourself in a manner that assures you will be the top one or two agent in the mind of the consumer.
So, as a real estate professional with a limited marketing budget, it makes sense to focus your efforts on a specific, well-defined market you can provide value to through your marketing efforts two or three times a month.
Anything less will place you below the top two spots in the mind of the consumer.
So the key question to ask is: How big of an audience can I market to 20-30 times a year with information they would consider valuable? The answer for most agents is a target of 500-1,000 homes. Focusing on a niche market enables you to reach the consumers with the frequency and quality to generate the awareness required to win business.
Third, you eliminate 95% of your competition by focusing on a niche. With over one million real estate professionals in the US, the industry is highly competitive. Through niche marketing, you can redefine your market to position yourself as the dominant player. For example, instead of competing in Silicon Valley for business along with thousands of other agents, consider competing in San Mateo Knolls, a neighborhood of approximately 700 homes within Silicon Valley. That positioning, combined with information relevant to San Mateo Knolls and a marketing program based on frequency and value, will position you as the expert. No other agents will be able to compete with your niche-focused messages. So by focusing on a niche, you remove yourself from highly competitive real estate markets and create your own market, in which you can dominate by using messages tailored to the niche.
Fourth, niche marketing is fun so you will be more likely to do it and feel better about yourself professionally. It allows you to tap into your specific interests and areas of expertise. Because you enjoy learning about the niche, developing relevant marketing and sharing important information with others, you will be more likely to do it, happier when doing it and excited to interact with the target consumers.
Take for instance, an agent in Marin County California that loves and is very knowledgeable about horses and running horse farms. Her niche is focused on buying and selling horse farms. Do you think she is likely to do extra reading on the subject? Do you think she likes writing her monthly newsletter? Do you think her target looks forward to conversations with her? Do you think she get referrals? Yes, Yes, Yes. Do you want to compete with that type of expertise? No. She stands out from the crowd and is a magnet for referrals for this type of transaction. In addition, she loves what she does.
Fifth, niche marketing creates long-term value in your brand. Niche marketing is not a fleeting strategy. You are not acquiring leads you have no connection to. You are not selling homes across a large metro area that have no connection. Multiple transactions in the same niche forces you deeper and deeper into your target market. As your experience grows, your ability to add value to the target audience grows. This repeated, deep focus will drive referrals, repeat clients and exponential growth in your business. And, over time, this focus will create real value in your brand.
Eventually you will “own” your niche in the mind of both the relevant consumers and other agents. No transaction will happen in your target market without you being involved in some way.
In speaking with real estate professional Robyn Foulger in Midvale, Utah, she explains the power of owning her niche among the real estate community this way.
“I decided to focus on the neighborhood where I live. I had very little business there before I made this decision. As I educated myself, provided the neighborhood Web site (www.SuncrestLifestyle.com) and newsletter, and continuously marketed to this community with value, I began to win listings and attract buyers. Over time, I became the most well-known agent in the community. As a result, today I am involved in most transactions in this neighborhood. It is to the point where an agent that lists a property in the neighborhood calls me for pricing and sales advice!”
Fougler’s brand now extends beyond her direct communications with the residents, to all interactions of the real estate community in her area. That is the power of focus. Because an agent runs a very small business in comparison to the entire real estate market, it is critical to identify a niche and serve it properly.
The alternative, attempting to market yourself to an entire geographic region, for example, is the fastest way to waste money in real estate. You will never be the first or second agent in the mind of the consumer without a focus. Niche marketing has worked for generations and is even more relevant today as consumers filter out generic marketing messages and seek relevant (local), value-oriented information. And, best of all, when you are ready to retire, you will have a value in your brand that can be transferred to another for compensation.
Bill Miles is EVP of Connecting Neighbors, a division of Reply! Inc.