Whether your marketing initiative is as intricate as the day is long or as simplistic as some good old-fashioned word of mouth, letting a potential buyer know what you have and why they need it now is the key to success. We spoke with a variety of industry marketing experts to get the inside track on how to get the word out there and get your listings sold.
By Michael J. Pallerino
When it comes to great real estate marketing opportunities, sometimes the best ones can be right under your nose. Ask any Realtor or developer and they’ll freely admit that while you can get praise for developing the “ultimate” marketing initiative, you should never discount the simplistic approach.
If you’re thinking simple means good old-fashioned word of mouth or just plain taking advantage of “location, location, location,” you’re right.
Here is an example of good old-fashioned marketing meeting location. The River East community is situated where the Chicago River meets Lake Michigan. The community is adjacent to the River East Arts Center in the Ogden Slip, a generous opening of water that runs parallel to the Chicago River and also opens up onto Lake Michigan to the east. During its river tours, the Chicago Architectural Boat Tour service employs a well-informed docent, who along with providing insightful tips on local history also weaves marketing messages into tours. That’s when MCL Companies decided to employ its Gilligan’s Island strategy, i.e., the “Three Hour Tour” marketing initiative.
“We commissioned the boat for an afternoon lunch to tour the river and head out briefly on the lake,” says Michael Maier, vice president of sales and marketing for MCL Companies. “Aboard with us were the city’s top brokers, agents and real estate reporters to provide a guided tour of the land where River East would someday be home to 3,000 new residents.
“With Mother Nature cooperating, we enjoyed a relaxing tour while Dan McLean [MCL’s president and CEO] discussed the different aspects of our vision,” he adds. “We repeated the trip for a handful of summers. Some of the reporters actually updated their readers on the dramatic changes that occurred along the river from their first tour with MCL Companies to see River East.”
Along with providing a little historical perspective, Maier believes it’s important to check the local social, sporting and business calendars before embarking on a marketing initiative. After all, you don’t want to be the one who’s conducting that big open house in Wrigleyville during a Cubs home stand.
Maier is one of those real estate professionals who believe a simple approach is always the truest bet. “We do [the standard] things like advertising, knowing the product, making sure our sales staff are at the properties we hold,” he says. “The simplest strategy is to stay in front of the brokers. It’s really about that face time. Relationships are what sell.”
In an economic climate that has hit the real estate market as hard as any other, it’s important that Realtors and developers understand the current cautious buying temperament of today’s consumer.
One example is that the buying decision cycle for a potential customer has been stretched out – way out. In the not so distant past, a potential buyer may have taken two to three weeks to come to a decision. Today, that cycle could take as long as 15 to 16 weeks. And even then, there are no guarantees.
To say it’s a buyer’s market may be the mother of all real estate understatements. “There are so many good neighborhoods out there in and around the city,” Maier says. “Buyers have options. So it comes down to who makes the best play. What does your property have? What makes your development different?”
Location is Still King
For some developments, the selling and decision cycles all come down to the property’s location. Keith M. Giles, principal with Frankel & Giles, believes the process starts with the developers.
“As developers, we must have a combined vision. We must have practicality and knowledge of construction, finance and the market,” he says. “Using these tools enables us to ascertain the highest and best use for a piece of land. Again, we do our own demand study, using our own market knowledge and experience and frequently use the help of outside consultants. We attempt to bring a new approach to most every project.”
Even before the selling process begins, companies such as the New West Realty Group take a good hard look at the USP — the unique selling position of the property.
“It can either be a universally fabulous location or a very unique location specific to a particular neighborhood,” says Terrie Whittaker, president of sales and marketing for New West. “It may be a great view amenity or the building may be architecturally unique in some way – anything that we feel we can hang our hat on. Once we decide the personality of the site and the building, we base our marketing strategy on that premise.”
Next come factors such as the unit mix. For example, if it is a new construction development, the agents have more options. In the end, an ideal unit mix is determined by knowing your market and gauging what has been successful in other buildings. Did one-bedroom-plus-den units sell better than two bedrooms, etc.?
“This is the exercise we go through to determine the mix for each project,” Whittaker says. “It is never the same thing twice. What worked two years ago does not necessarily make sense today. You also have to look at the target market of a building, which goes a long way toward determining the mix. For example, if your target is affluent empty nesters, you are going to design a different product than you would for first-time urban buyers.”
Good Marketing Can Be Simple
Above all else, when it comes to marketing your wares, Whittaker says that agents and developers must remember the golden rule when advertising your property or somebody else’s: good marketing is good marketing.
“By successfully marketing someone else’s property I am creating value for that developer and increasing my potential for more business,” Whittaker says. “We [New West] treat our clients’ projects as if they were our own.”
On the marketing side, New West relies on a series of old and new marketing endeavors. Since you cannot simply rely on print media, agents are using everything from broadcast and radio spots, to direct mail pieces, to phone banks and e-blasts, just to name a few. “We spend a lot of time brainstorming with our agents and listening to all of their ideas,” Whittaker says.
New West generally invests 1.5 percent to 2.5 percent of the sellout into various marketing programs for the life of the sellout. This includes collateral materials and ads. The distribution of those dollars varies depending on market conditions, time of year, location of the site, etc.
Whittaker remembers a record sellout of one New West’s buildings. The marketing was drummed up through an agent “whisper campaign.” Before the company had final plans or an office set up, agents began calling on potential buyers from other communities. They had the Realtors tell their customers that they were being given the first opportunity to buy the property before it was advertised.
“The response was amazing,” Whittaker recalls. “We reached 50 percent before we opened our doors. Ah, the good old days.”
Christine Lutz, senior vice president of Garrison Partners, is a fan of “grass roots efforts.” She believes that nothing can compare to simple referrals. If you do a great job for one client, they’re going to spread the word and that leads to additional success.
Referrals from current homeowners are best,” says Lutz. “We [as an industry] spent the past several years just selling the next person that comes in the door. Today, selling your past customers on helping with the effort of selling their development is the best way to get the incremental difference.”
Lutz reminds clients in a specific development that it is just as valuable to them to have those other units sold as it is to the developer. In this case, the Realtor isn’t alone in the process.
“It is in the homeowner’s best interest to keep the sales going at the community that they have invested in,” adds Lutz.
When it comes to selling real estate, John J. Bates, a real estate broker with Coldwell Banker Residential Real Estate in Naperville, has an approach he believes works because of its simplicity. Bates calls his equation the “Food Chain of Real Estate Sales” approach. Under his food chain lies four categories: farmlands, vacant lands, new homes and existing homes.
The premise relies on common sense. Farmers have farmland and developers need it. Developers have vacant lots and builders need them. Builders have new homes and buyers want them. Sellers have existing homes and buyers need them.
“I had a subdivision with a number of vacant lots to sell,” says Bates. “A couple purchased a lot, but did not have a builder. So they contracted with a builder I worked with for a new home. They had a home to sell, and it sold at an open house. This string of deals netted a $30,000 commission. Not bad for a $50,000 lot sale.”
Bates also believes that word of mouth is the best marketing technique a realtor can use. “It may sound like a cliché, but past customers are my best advertising,” he says. “I work with a lot of new subdivisions, and the sales reps for the builders promote me as a top agent, one [who] will work hard to get their home sold.”
It also doesn’t hurt that Bates has anywhere from a 30 percent to 50 percent penetration of broker to builder sales stats within each subdivision. From Bates’ estimation, anywhere from 50 percent to 70 percent of the people who walk into a builder’s front door do not have a broker representing them in the purchase.
“That means I have the potential to list their home,” he says.
To that end, there are parameters in which an agent must work. For example, the builder’s subdivisions must be in an area that the agent can service. This helps keep an agent up to date on price changes, new models, inventories, etc.
On the marketing side, Bates says that broker open houses are an excellent way to get the word out. He also uses broker e-mail blasts, direct delivery of flyers to brokers, a continually updated and active Web site, as well as an online visual tour, which enables a prospective buyer to view a home online.
So what is the best marketing technique a real estate professional can employ? Perhaps Giles sums it up best: “We attack every project, whether it is ours or a client’s, with the same intensity, professionalism and creativity. We use incentives for our sales people who are assigned to each project so that this is insured.” C.A.
John J. Bates
Real Estate Broker
Coldwell Banker Residential Real Estate
630.222.4463 – [email protected]
Keith M. Giles
Principal – Frankel & Giles
Vice President of Sales & Marketing
Senior Vice President
President of Sales & Marketing
New West Realty Group