LESSONS FROM THE PENCIL MAN
The “pencil man” used to buy pencils from me at the dime store for two cents then sit by the front door and sell them for a nickel. He knew that a certain segment of the pencil buying public would feel sorry enough for him to buy at an inflated price. That was his niche’. But times changed and the public no longer bought nickel pencils so the pencil man lost his niche’. When he failed to find a new niche’, his pencil selling career ended. Whether it’s houses or pencils, it’s time to get back to basics.
When it comes to sales, there’s no concept more basic than to “find a niche’ and fill it”. When dollars are flowing freely, we’re all satisfied so we allow ourselves to stray from such basic concepts. The weakened economy has forced many of us to examine and/or re-examine our business model. It’s always tempting to try to service as wide a market as possible but doing so may not always yield positive results. For the pencil man, it’s easy to see that expanding his product line beyond his niche’, would have failed for many reasons. Even in the best of circumstances, adding something as simple as ink pens could have soured the sympathy factor and destroyed the pencil man’s niche’. We have to consider our target market. Property management, for example, requires a real estate license and yet, the skill set and target market are very different from real estate sales.
Certainly, the foreclosure market has presented an opportunity not always available in Hawaii. The thing is that our historically low foreclosure rate may mean that developing a foreclosure niche’ may provide a short-term business boost but may not be a niche’ that provides for long-term growth. A niche’ should be sustainable. Interestingly, the shift to an on-line marketplace has greatly amplified the need to focus on niche’ marketing. It makes perfect sense because on-line searches these days are very specific. So where should an agent look for business that lasts? While we are all making short-term adjustments to get us through challenging times, now is the time to focus on long-term business evolution. There’s an old adage in real estate that “he who lists, lasts”. Homes are selling. Taking marketable listings is still key to longevity but it’s more complicated than that. Two things cause a home to sell; marketing and price. Pricing is a challenge but marketing is, of course, expensive and, now days, very complicated. No longer do we take a listing, put it in MLS, run as many print ads as we can afford, do a couple of open houses and assume we have done everything possible to get the property sold. To produce maximum results, today’s marketing must be electronically based and highly targeted.
Here’s the trick. Electronic buyers don’t initially want you to know who they are or even that they exist. For instance, a buyer looking for a home in Waikoloa Village wants to know everything there is to know about living there. The agent who makes Waikoloa Village their niche’ has the opportunity to “capture” in-coming buyers by providing appropriately fashioned electronic assistance. But they will have to do so without knowing that the potential buyer exists. This is huge. It means the agent must understand their niche’ so completely that effective marketing can be accomplished without direct interaction with the consumer! An agent’s site may have a full IDX (Internet Data Exchange) that allows an anonymous MLS feed to the buyer but that’s not enough. The buyer first has to find the agent’s site. Social networking, including blogging, can be boosted by an agent’s listing inventory. Effective participation in social networking forums heavily influences search engine placement. The more a buyer “warms up” to an agent, the more likely they are to trust the agent with their needs. This example is, of course, a compressed illustration of the process. In truth, it is very labor intensive and expensive to accomplish. Here’s the thing.
There is no way in an over-heated market to adequately develop a niche’. Now is the time to focus on building systems that will yield long-term results. There are deep systems to be developed. Agents who believe they can do it all themselves are delusional. Over time, statistics have shown that 20% of all real estate agents control 80% of all business. In Hawaii, I’ve always felt the ratio was closer to 10% and 90%. In fact, the most recent national statistics are that 3% of all agents control most business. An agent who has not fully embraced the world of electronic marketing is, as we say in the military, “retired on active duty”. So, my goal is to make the pencil man proud! I’m going back to basics by implementing long term strategies that will carry me through tough times and beyond!
Comments (24)
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