The world’s most broken marketing process

Here’s my vote for the most clueless group of marketers in the world: real estate agents.I’ve had the misfortune of buying and selling a number of homes in the past five years and have also done some consulting/research for local real estate professionals, so I’ve received a big dose of some of the dumbest marketing practices I have ever seen.

Marketing is all about the consumer. Realtors make it all about themselves. What other industry routinely plasters their faces on business cards, billboards and print advertising to sell a product? This is like marketing a new Internet service by publicizing the computer. Instead of ads and messages that promote truly helpful services and information, realtors proclaim “I’m a “million dollar seller” or “who’s who in Paducah real estate for 2005.” Is this going to sell a home? Serve a customer? WHO CARES?

Where are most of their ad dollars spent? Print. Where are most customers? Internet. In fact, 90 percent of all real estate searches begin there. One local real estate conglomerate just started a new full-color glossy magazine for home sales. What marketing genius is making these decisions?

And social media? Blank stares.

Here’s another marketing anomaly. The open house. Who comes to an open house? Nosey people who have nothing better to do on a Sunday afternoon and people scouting for a robbery. Success rate of this activity? Near zero. One realtor said in 10 years she had never sold a home through an open house.

Of course there are exceptions, but here is the marketing strategy of most realtors: “Do what everybody else is doing — which is what has always been done. And then collect a 6 percent commission.

The process of enlisting an agent, dealing with a lender and closing on a home is enveloped by mountains of paperwork and waste. Money is thrown at inspectors, appraisers and a host of other paper pushers who have no incentive to provide true value or improve their services. This is an enormous business opportunity for an enterprising person. Here’s a free “new real estate” business plan:

>> Re-focus marketing efforts on differentiated products and services that matter to people.
>> Provide value so extraordinary that nobody would even think about trying to sell their home themselves.
>> Use technology to drastically reduce overhead and non-value-adding costs to be able to make a profit on commissions of 1% or less.
>> Put 90% of the marketing effort into Internet and social media marketing, further reducing costs and improving service.
>> Re-create the role of realtors for the digital age by hiring people with business degrees, a familiarity with technology and marketing acumen.
>> Align yourself with partners, banks, appraisers, etc. who are willing to share in your vision of driving new value through technological efficiency and passing savings on to the consumer.

Now wouldn’t you sell your home through a company like that?

Illustration: Daniel Kurtzman

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