Channel Marketing in Real Estate

Spiderman and Stan Lee

by Jay on November 15, 2009

Stan Lee and Me

The many years I spent in bank marketing I thought were pretty interesting but I notice that people’s eyes glaze over when I talk about how bank marketers had to learn a whole new set of skills during the period of deregulation in the late 70’s and early 80’s and how there are many parallels now with the changes taking place in real estate.

But not all my marketing career was in boring banking. The picture is of me, Stan Lee and three of his comic book creations, Spiderman, Captain America and the Silver Surfer. It was taken at a tradeshow when the group I was with was doing public relations for the Marvel Comic trading cards.

Trade Show Marketing

Later I helped run a tradeshow exhibit company and went to the annual Comdex Computer show in Las Vegas on several occasions. Many of the companies that we represented spent 20% or more of their marketing budgets at these shows and there wasn’t a consumer anywhere near them.

All this effort was directed at their “channels” that actually took their products and sold them or incorporated them into their own products.  The Spiderman gig was at a large show for convenience store operators in Dallas. Our client was selling their product to the convenience store operators who would buy them  and sell them to their customers. Providing great packaging,  point-of-sale displays and pricing incentives to the retailers was all part of the game.

Go figure…Figurines!

In another gig, I helped launch a line of collectible figurines. (Well, we tried anyway.) In that case we were going to the major gift shows in cities like New York and Atlanta to try to get the best “rep” groups to carry our products. These groups often maintained showrooms in the key cities and hired sales reps to sell product all over the country. A rep could represent dozens of manufacturers like us.

So, that’s cool, but what does it have to do with real estate?

Real estate doesn’t work that way, you say.  It is true there are no showrooms or trade shows. But there are reps.  The seller’s agent functions as a “marketing director” for the home and the buyer agents are the reps.  Like any reps they often have a great deal of control over the buyer’s final purchase decision and will push one product over another with the right incentive. The wise marketing director considers this part of the distribution channel in planning a marketing strategy.

Four distribution tactics to consider

With many choices, the buyer’s power increases and so does that of the rep or buyer agent. There are three things the buyer agent is interested in: a satisfied client that will refer business, a smooth transaction, and a good payday. Here are four tactics that are legal, ethical and effective in influencing buyer agents and making your home more competitive.    These factors will dictate how hard the buyer agent will work to influence the buyer in your direction.  Here’s how you do it.

1. Email campaigns to buyer agents

Use an email campaign to influence the buyer agent, not the buyer. A small industry has grown up that offers listing agents agent-to-agent email campaign capability. Most agents use the same  copy they’ve written for the buyer and buyers seldom see them. The buyer agent doesn’t care about the “breathtaking view:” they would rather see a breathtaking check.

2. Smooth and professional transaction.

In all communications with buyer agents emphasize the things that will make the transaction smooth.  If you have prepared the way with “certification” as described in the Certified Home post, many of the thorny issues that kill deals arise during the “inspection and repair” phase of the negotiations simply never come up. A buyer agent that understands that will be pre-disposed to your property.  Show your confidence by indicating openness about the inspection and the repairs and improvements that have been make.

3. Pricing transparency.

Make your pricing analysis available. The buyer agent will most likely be asked to make a recommendation on an offer. If they see considerable analysis they will understand that it could take a lot of work to make a case for anything drastically different and be more inclined to see the offering price as “fair.”  In the luxury market most buyers are not spending their last dollar on the property so they may not be as price sensitive as other buyers, but nobody wants to be taken advantage of either.  If you have a defensible pricing analysis get it in the hands of the potential buyers as soon as possible once serious interest is indicated.

4. Compensation Incentive.

Finally, offer the buyer agent a commission slightly higher…at least a quarter point more than other sellers… even if that means paying the buyer agent more than the listing agent.  There are sellers and listing agents that don’t…or won’t…grasp this concept. Listing agents don’t think it’s fair and sellers already think they are paying agents too much. But the commission is a marketing cost, and both the seller and the agent need to focus on their respective nets.  A house that doesn’t sell, and many don’t in this market, doesn’t net anything for the seller or the listing agent. The buyer’s agent on the other hand, is going to get paid by somebody. Good buyer agents will not push the buyers your way if your home is not a good fit, but a premium commission is a great incentive to show it to their buyers if there is ANY chance that it will fit…and that’s what you want.

I welcome any comments or questions on any of the posts in this series and, please, use the “Share this” button to share it with anyone you think might be interested.

(Wow, could that picture really have been taken almost 20 years ago!)

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