What is the single biggest expense we as REALTORS® have? You guessed it — advertising. In fact, all the so-called “experts” recommend we spend a full 20% of our gross income on bringing in business. That’s nearly three times what other industries spend for advertising (most industries spend 6-7% of gross revenue. So here’s an idea that will help you bring your advertising costs to a more attractive level. Let a lender pay your ad bill. Let me explain.
Mortgage companies and real estate agents are typically trying to attract the very same people, at the very same time, each spending lots of money in what amounts to a duplication of effort. But what if you could partner with a lender, and both receive the same leads?
Well for most people who brand advertise, that’s simply not possible. But you need to rethink your advertising. Is branding the right approach for you? For today’s new generation of super-agents, brand advertising has been replaced with direct response advertising.
Direct response advertising differs from brand advertising because it is advertising that expects an immediate and sure result… a direct response. Brand advertising is about establishing your brand in a general and non-specific marketing push.
Large companies with only one or two major competitors can afford to brand advertise. Small companies with hundreds or even thousands of competitors, can’t. And as agents, we are small businesses with thousands of competitors. Trust me, you will go broke trying to brand advertise hoping the customers will come to you.
So how do you transition to direct response marketing, and then how do you get your lender to help with the bill? First you need your own lead capture system like my Ultimate Website system. The reason you need to have your own system is that direct response advertising is dependent upon identifying those direct responses. Think of it like fishing.
Brand advertising is like going to a fishing spot, and throwing food into the water every day. Eventually, fish would learn to come to that spot to eat. On the other hand, direct response advertising is like putting bait on a hook, throwing it into the water and waiting for a fish to bite. When it does bite, you need your fishing tackle to capture the fish. In direct response adverting, lead capture technology is that fishing tackle.
Having the right tools keeps you from just throwing ad money into a bottomless pit hoping business comes your way. Most agents today are just putting their name “out there” in as many places as possible, hoping it will pay off in top-of-mind-awareness and customers calling. But by using direct response advertising and lead capture technology, you can actually take the guess work out and generate as many or as few customer leads as you need, when you need them.
And by using lead capture technology and direct response advertising, you can generate your own business for almost nothing, while brand advertising costs thousands and still has no direct relationship to results. Many of the top agents today are using direct response adverting and lead capture technology to make literally hundreds of new customer leads every month for as little as $2-3 per lead.
Next you need a client management system or database. That way you and your lender partner can see each others progress in customer followup. It’s much easier to keep coordinated when you are both “singing from the same hymnal” so to speak. (In an upcoming segment I’ll share with you the art of handing off business to a loan partner or another agent, so watch for it.)
Of course I recommend you check out my company’s lead capture and client management, but whether you use ours or get them from one of our competitors, you just need to get them. Here is the really cool part, though. If you partner with a lender, you can effectively bring your entire cost of customer acquisition down to nearly nothing, while building a great relationship where each of you depends on and is loyal to the other.
I know of many agents using this strategy who’ve managed to bring their overall advertising bills down to less than 5% of their gross revenue, while increasing their number of closed transactions and minimizing their work load in the process. Less expense, more business, less work. Wow! Now how cool is that?