Number Crunching: Does Real Estate Specialization Pay Off?

Posted by on Jul 30, 2015 in Marketing, Niche Strategies, Real Estate | 0 comments

Number Crunching: Does Real Estate Specialization Pay Off?

When asked about tightening the focus of their real estate business, most agents reply, “I don’t want to limit my opportunities!” The problem is, this answer is often based on opinion (or fear) more than facts. It also reflects a lack of understanding the power of niche marketing. Let me explain.

Less Can Be More

Consider this scenario: There are 800 agents competing for 550 homes sold each year, on average, in your broader market. Assuming you’re all “generalists” with comparable visibility, the odds of getting any one listing are 1 in 800. Sure, eventually you’ll land some business as the dice are rolled another 549 times, but it’s still a crap shoot that adds up to perhaps one or two sides a year.

Now, consider just 55 of those properties—condos located in the heart of the city. What if you branded yourself as “the downtown condo expert,” exclusively targeting current owners and potential buyers? Assuming your marketing efforts are on target, what are the odds that you’ll be representing at least one side of these 55 properties? Pretty good!

At first blush, slashing your market to just 10 percent of its original size may sound risky, but not if your odds of “owning” that market suddenly improve dramatically. Let’s be conservative and say you’re successful in landing just 20 percent of the transactions in your sweet spot. That’s 22 sides—far superior to the first scenario.

Real estate niche marketing

Additionally, nothing is preventing you from picking up more business beyond your core niche. Deliver top-notch service—and stay in touch with clients after closing—and it’s entirely possible they’ll return for help with their next sale/purchase AND refer you to friends looking for a good local agent.

Ultimately, that’s the goal: to build a business dominated by repeat sales and referrals. Most agents, however, haven’t reached that goal and must invest both time and money into growing their business.

This is where niche marketing really shines. Instead of scratching your head (“What should I do?”) or testing expensive tactics (“That Interstate billboard sounded good at the time.”) you’ll have a clear filter to guide your marketing plan. After all, your budget will go much further if you can isolate your audience and deliver a message that’s specifically appealing to them.

Implementing a Niche Marketing Strategy

For example, assume our “downtown condo expert” knows his buyers/sellers tend to be young professionals 25 to 35 years old, primarily singles and married couples. Many work for three major employers; also, several downtown tech incubators are rapidly hiring. Let’s call this city Smithton. Potential marketing tactics may include:

– Regular content updates on the agent’s website, including neighborhood events in Smithton (and news about specific condo buildings), new listings, market trends, issues of particular interest to condo owners, etc. This keyword-rich content will significantly boost his page ranking with search engines, making it much easier for online condo-hunters to discover his site.

– To reach his Millennial buyers/sellers, this agent will need an active presence on all major social media platforms. Twitter will be key for connecting with the tech-oriented workers in his market; if he enjoys photography, Instagram is a must.

– Join the Young Professionals Network of Smithton, which hosts monthly social meet-ups and distributes an emailed newsletter that accepts members-only advertising.

– Develop a special downloadable resource—“Essential Guide to Buying a Condo In Downtown Smithton”—and promote it on his website, on his social media profiles, via the YPN of Smithton, and in flyers posted at local businesses. (Downloads require an email, significantly boosting his lead capture efforts.)

– Set up a Facebook ad campaign pinpointing his target buyers (by age, priority zip codes, eligible income, field of work, etc.) and offer them his “Essential Guide to Buying a Condo in Downtown Smithton.”

– Quarterly visits to the human resources departments at the three major employers and key startups; each time, he drops off a market update for downtown condos and featured listings, including an electronic version for email distribution to employees.

On Target

This is how a niche marketing plan might look for one specialist, but a completely different set of tactics could be more appropriate for another niche (here are 99 more possibilities).

The point is that ANY agent’s marketing will be more effective if your tactics are clearly targeted and well executed, significantly improving your odds of gaining traction in whatever niche is your best fit.

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Julie Collins

Since 2002, Julie Collins has been teaching real estate agents how to be more successful in articles published by the National Association of REALTORS®. (She helps NAR produce at least two dozen newsletters each year.) That's how she knows real estate. But Julie knows marketing too, with over 30 years of strategic and tactical experience. Blending these strengths, she helps real estate agents learn how to leverage their marketing techniques and build a more profitable and rewarding real estate practice.

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