Understanding the huge difference between sales and marketing is the first step to becoming a great marketer. Greg examines the chasm that separates these interrelated, yet vastly different disciplines.
By Greg Herder, May 2007
Working with real estate sales people day after day, I see a huge waste of time, money and energy that comes as a direct result of agents thinking like a salesperson instead of a marketing professional. Unfortunately, most agents have no formal training about what marketing is and how it relates to their sales activities. While most agents have gone through a significant amount of sales training, the sales training they get revolves around classic sales skills that assume that face-to-face selling skills are all you need to succeed as a real estate agent.
This training doesn’t cover the impact that marketing has on the overall success of an agent. The reality is that most real estate trainers do not have a marketing education or come from a marketing background. They were successful sales people that enjoyed training and/or management and teach agents what they did to succeed as a salesperson.
So, what is the difference between sales and marketing and why is it important that you understand it? The classic definition of marketing is that it is the total of all activities involved in the transfer of goods from the producer or seller to the consumer or buyer, including market selection, product or service features, design, packaging, branding, advertising, shipping, storing, selling, delivery and post-sale customer service. Selling is one step out of the complete marketing process and is usually defined as a salespersons’ actions that are used to persuade or induce (someone) to buy something when they are face to face or on the phone with a prospect.
How Marketing Works
Think about companies like Proctor & Gamble, which relies purely on the marketing process to persuade people to buy their products. When was the last time you walked into a store to buy a Proctor & Gamble product and a P&G salesperson tried to close you on buying Crest, Tide or any other P&G product? P&G relies on the impact of their marketing and advertising to create a buyer who walks into the store predisposed to buying Crest or Tide.
Classic sales methods were designed to work without any marketing support. From the early-1930s to the late-1970s, there were countless direct sales people who sold aluminum siding, cookware, encyclopedias, vacuums and a myriad of other goods, simply by knocking on doors and then closing.
Supporting Your Sales Function
By the early ’80s, two-income households were the norm and people became less tolerant of door-to-door sales, and most pure direct sales companies disappeared. The companies that survived were the ones that found a way to give their sales people marketing support – companies like Avon, Tupperware, Amway, Herbalife and others. These companies’ marketing activities created demand for the products that their salespeople sold, making the salespeople more productive. They also moved from door-to-door selling to home parties, group meetings, seminar selling and other methods that combined marketing with selling.
The old-school idea of a salesperson was someone who could sell icemakers to Eskimos based on their charismatic personality and closing skills. I remember one of the real estate sales training seminars I attended in the 1970s was titled “How to Convince Anyone to Sell their Home Anytime.” It was a hardcore sales script using a combination of fear and humiliation to make people sign a listing on the spot. I remember the trainer telling us, “Remember, this presentation works on average one out of every 25 times you use it, and it will also get you thrown out one out of every 25 times.” At this point I realized that if this what being a real estate agent was all about, that I would never make it. I believed there had to be a different way to persuade people to do business with me.
A Better Approach to Building a Business
In marketing, I found what I believed was a better, more professional method for succeeding in real estate. The secret to marketing is strategic thinking, planning and execution. You have to pick a target market that you have a passion for. Develop a point of differentiation and marketing message that makes it easy for prospects to remember you so that you can drive your personal brand into their consciousness. This predisposes them to calling you when they have a need to buy or sell a home.
Finally, you have to execute your plan. Your marketing plan shows exactly what is going to be mailed and when, what ads to run and in what publications, what support materials to send out when people do call, the follow-up mailing plan to convert leads into clients and your service plan that shows how they are going to be treated. This requires an agent to make lots of difficult decisions and trade-offs, and to develop the patience to let the marketing plan run long enough to actually start working – which is normally nine to 12 months.
To Build a Business, Resist the Lure of Instant Gratification
Instant gratification: the problem that too many sales people get bogged down in the marketing process. The number of decisions and sacrifices they must make overwhelms them, and so does the cost associated with developing all of the pieces needed to execute a plan. Finally they struggle to actually execute the plan consistently over time. As the decisions, organizational details and costs of building a marketing campaign bury them, the lure of getting the instant gratification of a sale starts to pull their focus away from marketing and turn it toward short-term sales activities like working FSBOs, cold calling for an hour a day and door knocking from 6 to 7 each night.
Why waste all that time and money on marketing when you can just go out and cold call expireds? This is why I believe the majority of agents end up failing in real estate and those who do survive simply hang on for 10 years until the referrals from their past client base start to kick in and they finally make a decent living.
Along the way, most agents end up trying some sales gimmicks that a trainer or manager they know referred to as marketing. The litany is endless: mailing free CMA flyers, holding a raffle for a new TV, car or other prize, giving away flags on the 4th of July, pumpkins at Halloween, notepads, pens, chip clips, calendars, and a host of other promotional stuff agents give away. Recently I was asked to judge a special marketing meeting for a large company that had a number of offices. Agents had been asked to bring their best marketing concept to this meeting and share in front of all the offices. Three mangers and I were asked to pick the winner from what we saw presented.
Sales Gimmicks Are Not Real Marketing
I was totally dismayed as agent after agent got up and presented some sales gimmick, open house invitations with cute bunnies, mailing out half a dollar bill and promising the other half if they would come by an open house, paper weights, magnets, beautiful presentation packages to give to FSBOs and expireds. During a break, the owner came up and asked me “What do you think is the best marketing concept you have seen so far?” I told him that I had not seen a single marketing concept during the first two hours. I explained that what I had seen was a bunch of short-term-oriented sales gimmicks that no matter how clever or cute, were hit or miss pieces at best. I realized that most agents think sending out a flyer or giving away a note pad is marketing, and that is why most of them become disillusioned with marketing and why most end up failing.
A great real estate marketer starts by looking at two things. First, the marketplace they are in and, second, their skill set and personality. Then they, based on who they are, determine what segment of the market is most likely to relate best to their personality. They then look for their unique marketing proposition. A UMP should be something that is very hard for your competition to copy and something that you find naturally exciting and compelling. Then you need to take that and turn it into a personal logo; a graphic design that you will use in every single piece of your marketing. Then go to work on creating a basic brand message that will be used to differentiate and make you memorable in your client’s mind.
This all takes time, money, focus and it’s hard work. In many ways it’s like growing crops. You have to analyze the soil, select the right crop to grow in that soil, add fertilizer, plant your seeds, water it, weed it and care for it during the spring and summer. All this is done so that when the fall rolls around you have something significant to harvest.
Commitment is Key
The most frequent question I have been asked over the last 22 years is something like this: “I can see how marketing is the way to go, and I really want to build my business through marketing, but how can I get started without limiting my options by having to actually pick a niche and by spending almost no money?” It is like a farmer saying, “Well, I don’t really want to commit to growing corn, because I know the wheat market could be good next year, and I really like beans as well, so I think what I will do is plant my field with mixture of seeds from the five crops I think will get me the best price next year.” We know the outcome will end up in failure, but we get to avoid having to make the difficult decisions that must be made.
Yes, you can succeed through a pure sales approach to real estate. Every now and then, I meet one of those incredibly rare, totally disciplined selling machines, who doesn’t get burned out using some script to try and close prospect after prospect. But they are very few and far between.
What’s Your 10-Year Plan?
I tell people in the long run it is better to go back and get a salaried job for awhile, save up $15,000 to $20,000 to invest in executing a marketing campaign and then do real estate the right way. If you were advising your teenager who just graduated from high school whether they should go to college or not, even if it meant working part-time, borrowing money and struggling a little bit, would you advise them to go out and get a job as soon as they could because it is going to make them more money today?
Ten years from now your life will be determined by the choices you make today. The question is really simple: Which approach to real estate will ensure your life will be what you want it to be 10 years from now? The direct-prospecting person plan or the marketing professional plan?
I would love your feedback on this article. Send your answer, along with any questions or comments, to Greg@GregHerderTraining.com.