How do I know if my marketing is working?
It’s no secret that marketing is the key to the success or downfall of any business. Marketing is the systematic and strategic plan you put in place to sustain or grow your business. Marketing includes many components: the customers you target with your advertising, how often to advertise, how much you charge for your product or service, and how you fulfill your obligation to your customer are just a few pieces of the marketing puzzle. Getting the interlocking pieces of your puzzle together to create the beautiful picture that is your business takes time, patience, and planning. A lot of people confuse marketing with advertising. Advertising is just one component of your marketing. Advertising is really the vehicle you use to announce to the public what product or service you provide. These are things like an ad in a newspaper, a commercial, or a direct mail piece. Since it’s one of the most expensive pieces of your marketing, it warrants an entire blog dedicated to doing the smartest advertising you can by applying principles routed in marketing. There are several common mistakes made in advertising. In my opinion, these mistakes come from a lack of understanding of marketing. The two are so intertwined it can be difficult to see where one starts and the other stops.
Get a smaller net and find concentrated waters: Anyone can place an ad, but do you really understand why you chose to place the ad where and when you did? Why did the ad say what it did? A successful business owner can tell you specific answers to these questions based on sound research done by their marketing department. If they can’t, well now they are just gambling and got lucky. One of the keys to finding a great deal in residential real estate is to find sellers that are motivated. People often cast such a wide net when advertising that it becomes cost prohibitive to find the few deals that makes sense. Instead, I suggest getting a smaller net and finding more concentrated waters. For example, some people might choose to buy a zip code mailing list and send postcards. The problem is that while you do get a large distribution it’s also quite expensive and most of the people in the zip code are not going to be motivated to sell. Instead find lists where the seller would be in a situation that creates the motivation. For example, code enforcement lists or absentee owners with delinquent taxes. When you track your advertising you will find you can send less mail and get more response.
And for goodness sake track your advertising: Would you spend your money and not know what you are getting for your money? Well, I suppose some people would, but my guess is a smart business person like you wouldn’t. Keep statistics on your response rates. Sometimes a change in the economic environment will lead to changes that need to be made in your advertising. Just take a look at all the products on the grocery store shelves. As our country recently fell on tough economic times the product packaging changed from razzle dazzle potato chip bags to grass roots old-school packaging to reflect our conservative spending habits. You can’t expect your same message to work the same all the time and with every population of people. If you aren’t tracking your advertising how will you know when it’s time to change things? Also, look at your cost per lead and your cost per deal. Basically, look at how much it’s costing you per lead, and also of all the leads you advertise to how much it costs to acquire the ones that actually turn into money makers.
This isn’t a one night stand: When you are tracking your cost per lead, keep in mind that to be successful in advertising you have to be consistent and repetitive in your marketing. It takes several points of contact with a customer before he or she will do business with you. I watch many people get frustrated when they are not getting any response from their advertising. They quickly give up and abandon ship, saying, “I tried that and it doesn’t work!” In reality, they didn’t work it! In my experience a well thought out direct mail campaign will take 4 to 6 months to see a significant response for your efforts. That’s why I always tell people start with a small number of quality leads that you can sustain your marketing for 6 months rather than a large quantity that drains you after one mailing.
Know when to hold ‘em, know when to fold ‘em: Advertising advice from Kenny Rogers? People often ask me how many times they should keep mailing to a lead. I always say, “For as long as the condition exists.” For example, if you have a list of leads that you acquired from your research in probate, keep mailing for as long as that home is still in the decedent’s name. In order for probate to settle, the property must be removed from the decedent’s name. Once the property has transferred to someone else you can remove the lead from your database, right? Well, maybe. We find that if the property transfers to one of the heirs, we will continue to send advertising to them for several more months. This is because sometimes the property is transferred in order to close probate, but the family is still liquidating the assets. Yes, this means that you’ll be reassessing the quality of your leads before you mail every month, but it’s necessary to control costs as your business is starting up. Later on you may decide that it isn’t always necessary to do this, but as you are tracking your advertising you can make this decision based on financial fact.
While your advertising might be just a piece of your marketing, done correctly it can create wild success. Remember, start small with a concentrated target, track it, be consistent, and re-qualify. Create a system that you can transfer to an employee once your business is up and running. We forget that we don’t have to do everything ourselves. If you don’t have time to do this yourself, then hire someone. If you say you can’t afford it, I say, you can’t afford not to.