It never ceases to amaze me how frequently estate agents choose to cut back on their marketing efforts to get more listings when they're looking to save money.
However, this approach can be short-sighted and result in missed opportunities.
As the famous saying by Henry Ford goes, " Stopping advertising to save money is like stopping your watch to save time."
The problem is that effective marketing can lead to more property listings, so eliminating or reducing marketing runs the risk of limiting the flow of potential sellers, ultimately causing even greater problems for the business.
While some may refer to John Wanamaker's statement, "Half the money I spend on advertising is wasted; the trouble is I don't know which half," as a reason to cut advertising across the board, the reality is that estate agents should have a clear understanding of the results different marketing campaigns yield.
Even in a buyers’ market, you still need the decent listings – don’t forget that
They should constantly focus on targeting profitable areas.
In fact, taking a more focused approach is likely to align with the Pareto principle, where 80% of successful listings come from 20% of marketing efforts.
Successful estate agencies segment their target audience and track their spending behaviour and potential value as clients.
They develop an ‘target vendor’ for each segment and tailor their marketing strategies accordingly.
They recognise that different approaches are necessary for different types of sellers—some may respond better to showcasing property features and benefits, while others may require a more emotional appeal.
Understanding these distinct customer profiles and addressing their needs not only increases the effectiveness of marketing but also minimises overall costs by avoiding wasteful spending.
If cost reduction is a concern, estate agents can consider slightly reducing the frequency of their marketing campaigns for a temporary period.
However, it is massively vital not to completely stop marketing efforts.
Instead, they should focus more narrowly on their most lucrative segments, maintain a consistent presence in their advertising (with a minor reduction), and place greater emphasis on leveraging local facebook groups to compensate for the reduced advertising.
Local Facebook groups can be a cost effective alternative, as it primarily involves the creation of articles or other media content.
Moreover, estate agents who have not fully embraced digital marketing should carefully explore ways to maximise their advertising budget and expand their reach through channels such as social media, blogs, and other online platforms.
By tapping into the digital landscape, agents can efficiently target their ‘target vendor’ while reducing costs without sacrificing reach or returns.
It's important to note that the knee-jerk reaction of stopping advertising and marketing can lead to a detrimental "death spiral" of dwindling listings, further cost reductions, and ongoing challenges.
Therefore, maintaining focus is paramount—focus on attracting potential sellers and generating more listings to keep the estate agency business thriving in challenging times.