Do The Exact Opposite

40 years ago when I was trying to get a handle on how to save some money and stop spending every nickle I made I read a lot of books about what to do. Didn't pay too much attention to any of them, but one phrase in one book stuck like glue.

It was in one of Gerald Loeb's books on investment (Here's a search list of some of his books). He said "Figure out what 90% of the people are doing and do the exact opposite".

Boy, does that apply now. When everyone panics and pulls in their horns that's when there is opportunity everywhere. Especially for real estate agents and brokers.

Right now the housing market has taken a monstrous tumble, the stock market is in disarray, and many thousands of real estate brokers and agents have closed their doors and more thousands are looking nervously at their production and are getting ready to bolt. Advertising budgets are being cut to the bone. Not knowing what will happen in the economy in the near term has taken its toll on the timid.

Without a doubt more financial uncertainty is in our near term future. Some more are going to fail and MANY OF THEM ARE YOUR COMPETITION. When the smoke clears, those who have weathered the storm will have less competition as the pent up demand for real estate makes itself felt.

Now is the time to position yourself to be a front runner in the months and years to come.

It's hard to give up a style or routine that has worked well for us in the past. Still that's a key to success in this market. I once asked a successful novelist for tips on writing. He said give up your "little darlings". I asked what he meant and he explained he mean those favorite phrases we think are so clever but that our audience may be mortally tired of.

Example of the Market in Carmichael for one year

What is a web visitor worth?

Overview

Millions of words and thousands of articles have been written about search engines and other ways to get leads and sales from the Internet. Mostly all of this material has only confused the issue for real estate web site owners. The general idea that if enough random people visit your site then some of them will be interested in property in your specific area is absurd.

Goal

The goal of this article is to give real estate site owners a basis to evaluate the benefit or non-benefit to them of investing time and money into search engine positioning, pay per click advertising or otherschemes to augment their web traffic.  There is more on this subject at: www.SilkShorts.com. 

Basics

The keystone of evaluation is to come to a determination of exactly what a demographically targeted visitor to your site is worth to your bottom line. Moreover it means discarding the idea held by Madison Avenue type advertisers that "eyeballs" are the name of the game.

You want to have as many potential buyers and sellers on your site as you can afford and you want a site that will appeal to them and result in their contacting you instead of your competition.

Random, non-targeted visitors to your site are useless and worth absolutely nothing at all. However, the opposite is true of potential clients that visit the site. They have real value to you--how much each is worth is difficult to ascertain, but worth the effort.

Evaluating -- First Method

If you believe that flying by the seat of your pants is a great business plan, then you're wasting your time reading this. If, on the other hand, you are the type of business person who "does the homework", read on.

To evaluate any type of advertising means finding a way to measure results, hopefully to determine the return on investment or cost of sale for your product or service. In real estate the bottom line, the end of the evaluation process is a quantitative measure of commissions earned, or gross sales realized as a result of the subject program.

Relating that to your web site let's work backwards and find out what the value is of a visitor to your website. If we can estimate the value of one average visitor, then we can begin to evaluate various methods of directing visitors to a web site.

The following numbers are for example only. Each person must determine their own numbers in their own way, but, follow this reasoning…

The commission earned on an average sale for our imaginary broker is $10,000.

To make that sale he or she must show property to 5 average prospects.

To obtain 1 prospect via the web site, 300 demographically targeted average prospects must visit the site.

So it takes 1500 visitors (300 x 5) to create 5 prospect contacts to produce one sale worth $10,000.

Each visitor is then worth $6.70. If you pay $6.70 per visitor to the site to earn $10,000 then there is no profit at all.

It's clear that the more accurate you can determine the projected value of a visitor, the better your chances of making a good decision with respect to any program that will bring prospects to your site.

For instance: Suppose you decide that a visitor ultimately represents $5 in commissions. (providing the visitor is a real potential buyer or seller). You may decide that
paying more than $1.25 per visitor is about the practical limit. If your Internet advertising budget is $5,000 per month and, providing you are set up to handle the prospects, you can project an earned commission from that investment of $20,000 per month
($5 / 1.25 = 4; 4 * $5000 = $20,000) with a gross profit of $15,000. (Of course you must allow for the fact that the "payoff" may be weeks or months after making the investment.)

Evaluating -- Second Method

The weakness in this first method is the difficulty of establishing reasonably accurate values for the variables. Without a lot of experience and record keeping these are hard to estimate.

The second method involves parlaying the experience of your competitors to
reach a preliminary evaluation of your visitors.

It works like this: If one or more of your competitors are paying for traffic to their sites in a way that you can determine how much they are paying, and if they do that for a significant amount of time, you can surmise that they have determined that what they are paying is worthwhile. (You never really know for sure, but it's a pretty good starting place)

Evaluating -- Third Method

Unfortunately this is the method most site owners use. It is simply to take the word of any salesman who is pitching a "web traffic service" to you. The salesman is on commission and really knows nothing about your business except that he or she thinks you probably believe in the tooth fairy and intelligent design, so to call this method risky is understating it big time. Someone once said that "Experience is the best teacher -- but the most expensive" and it is. The usual result of using this third method is a lighter wallet with little or no significant return.

Once you have a feeling for the value of visitors to your site you can begin to evaluate the various programs we'll be discussing in future artcles.

What Search Phrases are Worthwhile?

Not a week goes by but some client or prospect calls and says something like "How come I'm not on the first page of the search engines like my competition?".

This is how the subsequent converstation generally goes:

Me: "What's the search phrase you're talking about?"

Them: (Something like) "Why 'real estate broker in Upper South Forest Greens' where we do business".

Me: "Do you realize that in the last three months there have only been seven searches using that phrase on all of the search engines in the world? And, moreover, the only people who have searched that way are you and your competitors"

The point is this: There are very very few search phrases that are used a great deal by buyers and sellers and there is tremendous comptetition for those few phrases that might be of real value.

For instance, suppose you are an agent in Carlsbad, California which is in San Diego County. What are the main searches used by prospects wanting more information in your specific area? Here are the most used in order of their ranking:

san diego real estate

real estate san diego

carlsbad real estate

real estate carlsbad

So let's see what the competition is for those phrases.

"san diego real estate" (in quotes so that it will narrow the search to that exact phrase) shows 2,930,000 web pages have that phrase and are competing for first position.

"real estate san diego" 2,980,000 competing. Wordtracker predicts 194 searches per day for that phrase. EVEN IF by some magical process you found your site on the first page for that search you would be competing (on google alone) with about 17 other sites to get a browser to click on your link. If you got your fair share of click throughs that would mean a maximum of about 11 visits to your site per day or 330 per month. On the average that would result in about 4-6 inquiries.

"carlsbad real estate" 1,250,000 competing. Wordtracker predicts 14 searches per day for ALL search engines. Using the same math as before that would translate to about 25 visitors per month and result in one inquiry.

"real estate broker in carlsbad" has 1,250,000 competing. Wordtracker predicts NO searches per day.

However, that doesn't mean you can't get a share of the prospects that go to the search engines to find an agent or broker to help them buy or sell property. Just don't waste your time on search phrases that are not reachable.  There are plenty of phrases that you can compte for successfully, but it takes research and thought and time and money.  The results can be worth it after all.

How not to Lose Real Estate Business

The subject of this blog was conceived originally as a book. A book to help real estate agents and brokers learn to use Internet resources to grow their business in a cost effective way. The content is the result of my 25 years as a California real estate broker and my 11 years creating web sites for top real estate producers as well as my partner's experience in real estate relocation, real estate finance, and marketing. There is more on my background at www.silkshorts.com/the_crew.htm.

This is a work in progress. If you follow it you not only will get some great ideas that will help your business growth (I guarantee it) , but you will also, I hope, give me feedback on your own experiences that might help others with similar problems and interests.

Our corporate motto is "Your Success is Our Business Plan". OK, maybe that's too "cute", but it is our core belief.

You may be a complete beginner in real estate, a successful agent or an experienced and well-established broker, yet you still have to make decisions about your business' strategy with respect to the Internet.

So, what are your choices? Well...

• Many have decided that since their business is going fine and has been doing so for a long time, that it is unnecessary and unimportant.
• Some say all is needed is a quick overview of their company with no bells and whistles. They want to have the cheapest site possible but still be able to put a web address on their business card.
• There are those that are fascinated with the technology and want to create their own website using their own time and skills.
• Some offices turn the problem over to an assistant who may have taken some courses in "Internet" in school.

Who's to say they're wrong? If their strategy is the best for them, no problem, that's what they should do.

However, chances are if you are reading this that you are among the growing majority of real estate professionals who recognize that now and in the forseeable future the Internet is and will be the major marketing tool available. You recognize that you must find an Internet plan for your business that is managed by professionals in that business and that your time is much more effectively spent in front of prospects than in front of a computer.

Nonetheless, recognizing this does not solve the problem. It does, however, change the focus. Of the hundreds or thousands of "Professionals" available how do you find one who will help you achieve your goals?

What you need first is information on what the possibilities are and, more important, what are the dead ends, incorrect assumptions, misleading theories, and downright fraudulent propositions that can eat up, your money and even more important and valuable, your time.

How easy it is to put off a difficult task like this until later. Who really wants to do "Homework". Well you're in luck because right here are the "Cliff Notes" you need to get the unvarnished facts you need to make your decisions.

In broad strokes this will paint you a picture of the Real Estate Marketing Environment you are dealing with. (You can register for a regular email update on "Real Estate Site Design and Marketing Tips" for REALTORS®.)

It will show you:

1. How to use the Internet and other modern communications
   tools to get more than your fair share of Internet-generated business.
2. How to position yourself as pre-eminent in your niche markets.
3. How to avoid losing your existing client and prospect base to the competition.
4. How to attract the top producers to your office if you are a managing broker.
5. How to present yourself and your business as a leader in your market area.
6. How to capture and hold future buyers months in advance of their entering the market and do it with a bare minimum of time spent.

As a bonus it will give you an insight in how to make that other business you’ve may have been considering, or that you are already involved in, successful.