Keeping It Up In a Down Market - Sales, that is

Salespeople are taking a beating in today’s economic environment. Entire market segments have evaporated. Customers and companies have no money to buy and are holding back orders. Sales lead generation opportunities are fewer and farther between. In 2008, many salespeople earned only half the commission they received in 2007.

But not all sales professionals are in a slump. Some are thriving. Some are busy generating leads, growing their client base, and making good money despite the uncertainty around them. And you can, too. Douglas Smith, a nationally recognized speaker and sales trainer, offers these four tips to boost your lead generation efforts.

Don’t wait for the climate to change.
The best salespeople take action and move forward. They recognize that the economy may be in this mess for years, and that waiting and watching is a poor strategy for success. The movers and shakers are setting up appointments, making sales calls and presentations, contacting their current and past customers, and marketing like never before. Their proactive approach is creating opportunities, leads, and sales. In boom times or bad, you can never wait for customers to find you. It’s your job to reach out and find them.

Work harder.
Top salespeople understand this age-old axiom: You can’t make more money with less effort. That’s why they are working harder and putting in more hours than ever before. Think about this: Arriving just 30 minutes earlier and staying 30 minutes later each day equates to an additional 20 hours every month. When you are working 20 hours more than the average salesperson, you can make at least 20 percent more contacts — and even 20 percent more sales.

Talk to the right people.
Some companies may want or need your product or service, but if they can’t make a decision or are constrained by shrinking budgets, it doesn’t matter. Successful salespeople are selective about where and with whom they spend their time. They are out looking for “real” buyers — customers and prospects who have both money and the ability to buy. Every minute you spend with an unqualified prospect is time not spent with a qualified one.

Make more contacts.
Customers are more cautious today, and they take more time making spending decisions. That means to land more sales, you have to make more contacts. When capture and conversion rates go down, to maintain a steady volume of business, your sales contacts have to go up.


Many thanks to Ken Beaulieu and Douglas Smith for the content for this post. If you have any comments, please feel free to add them below.

Enter the conversation!

Best to you,

Jim Herrera


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Marketing to Today's Buyers and Sellers

I continuously read about the real estate industry from multiple sources. Click on my blog profile to see some of my resources.) The following is gleaned from NAR information, the Pew Internet Life Study and articles from Bernice Ross, featured columnist at Inman.

Here are some tips about the buyers for the current market...

1. Gen X and Gen Y Rule the Buyer Market
If you're working with buyers, you can no longer ignore the fact that 60 percent of today's buyers were born after 1964 (i.e. are members of Gen X and Gen Y). In fact, 54 percent of first-time buyers are in the 25-to-34 age group. For Gen X and Gen Y, the primary motivations for buying was their desire to own a home, a job-related relocation or move, the desire for a larger home, or a change in their family situation.

Opportunity: As 75 percent of all first-time buyers are currently renting an apartment, consider marketing to tenants in high-end rentals. For buyers ages 18-24, 62 percent used social networking sites several times per week. That number drops to only 33 percent for buyers ages 25 to 44. To earn the right to do business with this growing group of young buyers, become an active part of the online conversation. This does not mean promoting your services. Instead, consider sites such as Facebook and Twitter to be similar to a social gathering where you meet others who share common interests. Gen X and Gen Y want to get to know you in a social environment prior to doing business with you. Dump the vanity marketing that focuses on you and your accomplishments. Instead, show up as an interesting, fun person who also happens to be a competent and likeable real estate professional.

2. Empty nests
Sixty-two percent of all buyers have no children living at home. Among this group, nearly twice as many single females (24 percent) purchased homes as compared to single males (12 percent). Married couples overwhelmingly preferred single-family residences (86 percent), compared with 63 percent of single females and 65 percent of single males. In terms of preferring townhouse or apartment-style condominiums, only 10 percent of married couples preferred this type of property, compared with 31 percent of single females and 30 percent of single males.

Opportunity: Niche your marketing efforts to fit the type of property you are selling. For example, Gen X (born 1965 to 1976) appears to be putting off marriage and having a family as opposed to Gen Y moms (born 1977 to 1994) who have an average of 2.3 children. Thus, Gen X buyers may be better candidates for condominiums or townhouses, while Gen Y couples may be better candidates for single-family homes. In terms of marketing to Gen X and Gen Y, these two groups dislike newspapers. They do read magazines, especially those focused on lifestyle. When marketing to both Gen X and Gen Y, show pictures of their age group enjoying the good things about living in your area, especially pictures of singles and/or families who are having fun. For older buyers, focus on couples downsizing or buying second homes.


3. "Location, location, location" is still true
While people may debate what really matters most to homeowners, NAR's research shows that the number one concern for all buyers (62 percent) is quality of the neighborhood. Convenience to work was second (51 percent), while overall affordability of homes, convenience to friends and family, and quality of the school district rounded out the top five. Given the high price of gas during the time the survey was conducted, it's not surprising that 41 percent of all buyers said commuting costs were very important and another 39 percent said they were somewhat important.

Opportunity: When working with buyers, be sure to explore what constitutes a "quality" neighborhood as well as potential commute times. Gen X and Gen Y place more emphasis on time spent with family and friends. Be sure to discuss these important issues prior to showing them property.

4. Age influences how long the buyer will live in their home
The median time that buyers between the ages of 18 to 24 expected to stay in their homes was six years, compared with 10 years for those 25 to 44 and 15 years for those over the age of 45.

Opportunity: Younger homeowners who have been in their homes four to five years are more than three times more likely to put their property on the market compared to older homeowners. While 21 percent of the 18- to 24-year-olds plan to sell in four to five years, only 17 percent of those between the ages of 25 and 44 planned to sell. For those 45 to 64, only 6 percent planned to sell that quickly and only 3 percent for those 65 and older. On the other hand, the prime time for buyers to purchase a second or retirement home is between the ages of 50 and 60.

So, now that you might have some ideas on who might be a buyer, the next question is: How can I effectively market to them? Here are some additional thoughts.

1. Increase your online advertising budget
If you're throwing your money into newspaper advertising, magazines or buying guides, you may want to shift some of those print advertising dollars to online advertising. According to the survey, only 1 percent of consumers found their agent through the newspaper, Yellow Pages, direct mail, or specialty advertising such as calendars and magnets. Furthermore, the number of people finding their homes through a newspaper, a home book or magazine, or directly through the sellers declined by 50 percent. Part of this is due to how people begin their real estate search. Eleven times more buyers now begin their search process on the Internet (33 percent) than they do in print (3 percent).

2. Fewer buyers use real estate agents to locate their homes
In 2001, 48 percent of all buyers found the home they purchased through a real estate agent, compared with 38 percent in 2008. During the same period, the number of buyers finding their home online rose from 8 percent to 32 percent. Nevertheless, the number of people who found their homes through other traditional approaches has remained stable since 2001. Fifteen percent of all buyers found the home they purchased from a yard sign or an open house sign. Another 7 percent to 8 percent located their home through a friend, relative or neighbor. Bottom line: Put your advertising dollars into Web marketing while continuing to market your listings using yard signs, open house, circle prospecting and referral strategies.

3. Internet usage trends
According to the survey, "Eighty-seven percent of home buyers used the Internet to search for homes, up from 71 percent five years ago. Not only has the trend in overall usage risen, but the percent of buyers using the Internet frequently increased from 42 percent in 2003 to 69 percent in 2008." Even though buyers actively search for homes on the Internet, a whopping 77 percent then drove by or viewed the home in person.

4. Value of Web site features
Buyers overwhelmingly cited that photos (86 percent) coupled with detailed information (84 percent) and virtual tours (68 percent) were the most useful Web site features to them. Two studies conducted by Point2Agent in 2007 and 2008 showed that having 16 photos (as opposed to 15 photos), resulted in 33 percent more page views. Based upon the Point2Agent study, the optimum number of photos for lead conversion is a minimum of 20.

5. Your local MLS Web site trumps all competitors
While social networking can help you build your online reputation, the best place to display your listings for maximum exposure is still your local MLS Web site. Only 1 percent of all buyers surveyed used Facebook, MySpace, YouTube or other social networking sites to locate properties. In contrast, 60 percent used the local MLS Web site, compared with 48 percent using Realtor.com. Individual agent Web sites (43 percent) garnered nearly as much traffic as brokerage sites (46 percent). To reach the greatest number of potential buyers, market your listings in all of these venues.

6. Disintermediation is dead
A few years ago, Web marketers proclaimed that the Web would eliminate the need for real estate agents (disintermediation). The exact opposite has occurred. In 2001, 69 percent of all buyers purchased their home through a real estate agent or broker. In 2008, that number was 81 percent.

7. Foreclosure sales represent only a small fraction of all transactions
Despite the nonstop press about foreclosures and short sales being the only types of transactions currently closing, only 3 percent of purchasers acquired their homes through a foreclosure or trustee sale. Nevertheless, that's still triple the 1 percent number from 2001 through 2007.

8. What buyers want most from real estate agents
A large proportion of the industry was worried that the buying public would have no need for agents once they had access to MLS information. Surprisingly, 48 percent of all buyers indicated that their top reason for working with an agent was to find the right home to purchase. In terms of what buyers perceived as being beneficial, the top three items were helping the buyer understand the purchase process, pointing out unnoticed faults or features, and negotiating better terms. The characteristics they found most valuable in their agent were honesty and integrity (97 percent), knowledge of the purchase process (94 percent), responsiveness (93 percent), knowledge of the real estate market (92 percent), and communication and negotiation skills (83 percent). Technology skills were considered to be "very important" by only 37 percent of the respondents.

9. The saddest finding of all
A whopping 70 percent of all buyers said that they would "definitely recommend" their agent to other buyers, and another 18 percent said that they would "probably recommend" their agent. Sadly, only 11 percent of all buyers said that they used the previous agent to buy or sell a home, while 43 percent relied on a referral from a friend, neighbor or relative. This finding underlines the importance of staying in contact with past clients, especially for both repeat and referral business.

I've said in the past that the world has changed. And clearly it has. Are you ready to keep up?

If you find this blog has value, please pass the link along to others. Thanks.

Best to you,

Jim Herrera


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