There’s a ton of marketing going on in REI related businesses. Bandit signs. Websites, Biz cards. Auto magnets. What do you think? Compared to other brands that are reaching after the same people we are…brands like Coke, Wal-Mart, Chevrolet. Does REI marketing come off as credible? Is it an excuse to say, “Yeah, but we don’t have millions for an ad budget”. When many of us are a 1 person biz in many cases that stands to make thousands and tens of thousands on a single sale without the overhead of a huge company? Would spending $350 on a logo that would make us look more credible than say, trying to do it ourselves? I ask, because it seems we’re ina biz where credibility is immediately scrutinized. When branding is all about building trust with consumers, is there a reason the only few in RE who seem to use it are the the giant firms. Just curious.
Oh no, I am going to lose my house…
But wait, this guy that put a sign up on my block has $$CASH$$ and can buy it and stop the pain!
Do I care if his logo is as well designed as the Coca-Cola(R) logo?
Is the check gonna clear? Then nope, don’t care.
While I definitely think it should be a decent design, better than a 5 yr old and fingerpaint, you don’t need to spend a million bucks to get a logo made up. Hell a bandit or postcard that says “We buy houses” is sufficient, you don’t even really need a company name to get your message across.
Here’s the difference–as I see it–between your neighborhood real estate investor and a company like say…Burger King.
Investors are offering what basically amounts to an direct-response-driven, impulsive solution to an immediate emotional problem.
“Need to sell your house YESTERDAY? – WE BUY HOUSES 555-5555!”
“Want to own the American Dream NOW? – RENT TO OWN 555-5555!”
We are NOT in the business of subtling reminding people:
“Next time you’re hungry, think ‘burger’”.
It’s very common for sellers to reject our offers when they know we aren’t going to be living in the house ourselves. How many more deals would we lose if we made ourselves look like giant corporations?
You can’t be all things to all people. Some people will like the idea that I’m a one-man operation, others will want the “comfort” of dealing with a big company (even if it’s really just another one-man operation that licenses a marketing system).
Doug gave the important answer here. Branding is about remembering me when you need me. I know you don’t need me now, but I’m going to spend a ton of money so that you will when the time comes.
That is expensive. Can it pay off? Probably, if you’re in the right market. I mean, if there was a city with 50,000 houses and EVERYONE knew you were THE go-to guy when you need to sell a house fast, I imagine you’d be pretty busy, assuming the demographics were right.
Most of us, however, are doing direct-response advertising. You see my ad, you need my service now, the stars are in alignment, you call me.
If I had the budget, I’d say that the branding thing could actually work. After all, only 25% of my deals are true financial distress. 25% are reluctant, tired landlords; 25% are estates; and 25% are people who just don’t want to deal with agents and whose homes wouldn’t show well, anyway. That’s 75% of my deals that could be gotten through branding as opposed to direct-response.
I am aware of that we some of us don’t want to look like big corporations.
(good point that we can’t be all things to all people by the way)
And yes, branding is about stimulating recall.
But to go back to my original point, it is also about building trust. It is an emotional approach.
The question is…in a crisis do you think logically or emotionally? Emotional responses trigger approx. a million times faster than logic I’ve read. Do people in a pre-foreclosure crisis mode tend to think logically or emotionally–it’s their money and in some cases families on the line… am I missing something? If all of these people thought purely rationally, would they be in foreclosure in the first place? (Yes I realize there are exceptions).
Can the “Cash for your house now” message be created in a more believable fashion/ execution than we’ve seen it thus far? I think so. Even using the exact same headline.
Do people in pre-foreclosure have their guards up given all the news articles / tv news stories about scams in the REI world? If they end up with 50 different postcards in the mailbox saying, “CASH FOR YOUR HOUSE NOW!!” but one is branded correctly (and doesn’t look like a giant corp) to appeal emotionally, do you think it will generate greater response? Might the reader think, 'wow, these guys have money, maybe they’ll offer more?"
Branding appeals to emotions. Done right, it says, “you’ll be safe here.” In our case it says, “The check will clear. We won’t scam you with equity skimming or similar. We’ll actually be pleasant to work with (hopefully).”
There’s good direct response. And there’s bad direct response. I worked on one of the largest direct response accounts in the country. We understood it still had to appeal emotionally.
Of course the best marketing in the world won’t matter if the person who shows up doesn’t come across as credible.
As for spending a million bucks on a logo…no I don’t recommend that. Go to the right person and you can get one done for $350 (a much better ROI I’m sure).
You have to keep in mind two things:
When you are a one man shop and just starting out, your money is better spent locating motivated sellers than branding. Branding costs money, and the object of branding is to provide support and/or assurance that you are credible. Like you stated, it is done by the big guys since they can afford it. I would brand only to supplement my other marketing methods, but branding should never be your primary focus. It is a by product of what you do and your current marketing.
We are in a different industry than most others and we seek motivated sellers who need to sell now. They are NOT BUYING so they are not looking for the bigest and best. They are SELLING and they know it is a one time transaction. When SELLING people want smaller guys because they may get better deal.
I think there’s a reason that so much of the marketing and advertising that you see in this business looks the same: it works.
For the most part, the goal for every effort is to get the phone to ring. That’s it. I don’t think you can attempt to build credibility before that. Moreover, I don’t think most people think about whether the person they are calling is credible or not. They’ll worry about that after the phone call, once they’ve heard what is being offered and whether it sounds too good to be true. I would say that only 1% of callers even know what equity skimming is. Heck, 80% of them don’t even know what a short sale is.
They have a problem. They think you have a solution. They call (or go to your Web site). It’s up to you from there.
I will say this. I think the one thing that is most overlooked by real estate investors looking to buy property cheap is that they are, in fact, salespeople first, buyers second (distant second at that).
By that I mean that you have to be a good salesman…with the ability to sell people on the idea that they should sell their house to YOU and no one else. If you visit that little old lady with a laptop in one hand and a Bluetooth receiver attached to your ear, but you DON’T ask to learn something about her grandkids or her husband who passed away three years ago, you are probably NOT getting the deal.
You need to build rapport with your sellers and make them feel good about selling to you.
An off-topic reply, I know, but one worth sharing, I think.
“Do people in pre-foreclosure have their guards up given all the news articles / tv news stories about scams in the REI world? If they end up with 50 different postcards in the mailbox saying, “CASH FOR YOUR HOUSE NOW!!” but one is branded correctly (and doesn’t look like a giant corp) to appeal emotionally, do you think it will generate greater response? Might the reader think, ‘wow, these guys have money, maybe they’ll offer more?’”
Of course there are ways to generate more response. Not every letter or postcard will receive the same response. You’re a copywriter, so of course you know this.
You’ll hear a lot of people talk about testing on this site. Letters vs. postcards, long vs. short, how many times to send, hot copy vs. not so hot, when, and so on.
I think the best approach, especially if the deal is really worth getting, is to send multiple messages in multiple formats.
I’ve even written my message on check stock (with the two stubs attached so that it’s a full 8.5 x 11 in size) with the double window envelope so that it looks like the recipient is getting a check. Did some people open it because they thought it was a check? Absolutely. Did some people think it was sort of jive? I’m sure. Did anyone call me to complain? Nope. But the point is that some of those envelopes got opened. That is truly half the battle in this business, at least pre-foreclosure.
I have never bought a house from anyone in financial distress. If it’s all about being a great salesperson as you said, Paul. Then that would explain it because I suck at selling anybody on anything
100% of of my deals are with people who have already bought another home and while they CAN carry both mortgages, they don’t want to. It is more about me offering a simple solution to an annoyance (apply cream on itch), than it is about getting them out of trouble.
So for me rather than trying to convince them to sell to me. My business is all about screening out those are aren’t serious. I look for the seller who “gets it” without too much explanation and likes the idea of getting some cash in every month without having to worry about whether the tenant is trashing the place.
To that end I do the exact opposite of what you were saying about building rapport. I don’t try to get to know them. I ask blunt questions that are designed to eliminate them so I can move on to the next lead. If they pass the first test, then it’s on to the next, and so on down the line until the final test where they sign.
If you’re doing low- or no-equity deals such as subject-to’s and lease-options, etc., that can make a lot of sense, especially if you have a lot of leads.
Me, I look for nice houses (not inner-city crap) in nice neighborhoods that can be bought cheap–much cheaper than they would sell for if they were armed with all of the information or had resources and time. I need to find people who are literally willing to leave tens of thousands of dollars of equity on the table.
Because these deals are so sweet, there is lots of competition. That’s why I need to “sell” myself.
Everyone runs their business different. If it’s working for you, awesome! No disputing success.
In my business, I have been successful because I answer the phone, return phone calls promptly, do what I say I am going to do and treat people that way that I would like to be treated (it helps that I speak spanish, too).
Mostly the first one is what has gotten me business (people have actually told me that I am the first live person that’s answered the phone). It was only a matter of going to their house and getting their signature on the contract.
I myself have run into REI people that make the rest of us look bad. I’ve left messages and never gotten an answer, had people try to go around me, etc. I would never run any business that way, let alone this one. You can spend all the money in the world on signs, logos, marketing, etc. But as in any business, if your people skills stink, you might as well not shower for a few days because no one is going to come near you. I called one ad and it was CLEAR that it was a low-rent operation. It was the guy’s MOM. She was loud and rude. I bet he gets a lot of business.
This isn’t a business that the client is going to know the name of a bigger company. I change my approach depending on who it is and why they want to sell. I admit, I do play roles depending on their situation (gotta play the dumb chick at times, but it’s a role and more than worth it when I get the check-who’s dumb now :shocked?). But I never take advantage of anyone. I don’t have to work too hard to get properties (although I like looking for deals, big or small) because people remember how I keep my word and do right by them so they are glad to do business with me.
I live in an area that is full of lazy people. Everyone wants properties at 50% of market cvalue to jsut fall out of the sky. The people I work with always ask me how I find them. My answer: paying attention while driving down the street.
As far as inner city crap goes, the “ghetto” section of the main town I am from was converted. My aunt told me about it when it first was talked about and they couldn’t get any takers due to the area’s history. I gave my aunt some of the money from my inheritance to buy into it for me since she still lives there. It took a few years, but now that it’s all done, I made about $1 million. She made like $10 million. So by all means, pass over the inner city crap. I’ll take it any day.
I agree with moonstruck. When I first started I was so excited to have my own business that I felt I needed all the works, nice logo, perfect name, perfect biz cards, etc. Then one day I realized I got all this stuff and no revenue period. My point is that instead of worrying about that stuff I focused on the deals and making them win/win for everyone, and actually listening to everyone I talk to. Just lestening and responding to what people say goes a long way. It doesn’t matter what my company name is anymore, in fact my campany name is my last name. I suggest that everyone joins their local chamber pf commerce and donates here and there to local organizations. When people talk to you and realize that you just gave to the local little league, they open up their doors.
For me, I have a hard time convincing a couple of homeowners to sell their house Sub2 to a 23 year old (who really looks like he is 19). All my marketing suggests that we are a large company and most of the time I think people assume that I am just an employee. If they ask who the owners are I tell them the truth, but those deals don’t really ever work out in my experience. In my opinion professional looking marketing with a logo (all that I created myself and isn’t difficult or expensive) has gone a long way in making the deals I have done work out. I also should say that we were doing these deals before we had any kind of professional marketing.