Why Brokerage Firms Must Invest in their Marketing
April 20, 2015
A brokerage firm relies greatly on marketing — it begs the question why isn’t this a more heavily talked about topic? I suppose it’s the sheer fact that most brokerage firms realize what they are getting themselves into before they decide to create a firm, thus they are familiar with how much marketing it will take. Yet, there are some brokerage firms that have forgotten this important lesson. A brokerage firm is largely dependent on their marketing to generate leads, and ultimately revenue. How much marketing they do and the caliber of their marketing directly affects the bottom-line.
If you are thinking of starting a brokerage firm, consider how you will market your firm and the investment that it will require.
A poorly marketed brokerage firm suffers the following:
Failure to attract high-end sellers
If you’ve got a property worth more than $2 million, the commission paid is much higher. You want to make sure that the agent you go with offers the best bang for your buck. There are several established brokerage firms that have excellent advertising for their brokerage firms and that give their agents a large array of tools to use to help them market the sellers property.
As a property seller or even builder, you want to make sure your agent has the greatest number of tools available to them when listing your property. The sophisticated seller knows how to differentiate between a brokerage firm that provides the essential tools and a brokerage firm that does not.
Failure to attract top-producing agents
As a top-producer the options are great. You can work virtually anywhere and be given nice incentives on why to choose one brokerage firm over all others. Top producers want to work for top brokerage firms.
Top reasons an agent chooses a brokerage firm include: better technology (marketing), brand and reputation (marketing), cultural fit, and lastly training and education. Agents expect to receive great leads and this can only come from a well-marketed brokerage firm.
Failure to retain top-producing agents
Any brokerage firm who expects to be successful depends on having the best agents. Retaining talent is as critical as recruiting it. The potential for leads and compensation will predict whether agents, particularly top-producing agents, stay at a firm.
Okay, so what are the marketing choices available to a brokerage firm?
Hire an in-house marketing team. This includes a creative director, an art director, a media director, a public relations guru, a web developer, and support staff. Sound expensive? It can be. There are other essentials such as employee salaries and benefits, dedicated office space, and the opportunity for continued education. All this can be costly but worthwhile. If you choose to go this route, you need a Chief Marketing Officer or a Marketing Director, unless as the owner you choose to supervise it all. While expensive, it can bring a large benefit to your brokerage firm- i.e Douglas Elliman and Corcoran.
Outsource your marketing department. If you don’t have the ability to hire all the people needed to complete an effective in-house team, consider hiring a marketing firm. There are a great deal of successful brokerage firms who work with outside marketing firms which produce incredible results. Their design is typically high-end, consistent, and extremely effective. It also gives the agents top notch support. The marketing firm is responsible for everything. This is a turn-key solution for brokerage firms that don’t wish to become marketers. The brokerage firm directors can focus on their expertise and let the hired marketing firm to take care of all the marketing, including creating reports for sellers, the descriptions for each listing, the photography, and more. This is a great alternative for brokerage firms that don’t want to invest in hiring their own team, but need a feasible solution to produce excellent marketing.
Hire limited in-house staff. The in-house staff will not be responsible for the creation of campaigns or anything new and will require an outside firm for any “changes” necessary. If a new campaign is required, the in-house team will be limited and will not have the capabilities to initiate anything new. Their job is limited to maintaining the day-to-day stuff and upload ads to publishers as needed. They are not creating anything new and are not managing a marketing strategy. This is a risky way to go, as it won’t work for the long-term unless you have a strategic marketing company working alongside your in-house team.
Then of course, there is the do absolutely nothing approach. This puts a lot of pressure on your agents, and you can’t expect to retain any top-producers. Those who do remain have their own network, and are okay with the limited exposure because they don’t plan to make the list of top-producing agents. Assuming you want to increase revenue and success, this is not the route you would choose to take.
This is not to say that top-producing agents won’t choose to take their marketing a step further, many do. Despite excellent marketing by a brokerage firm, a top-producer is likely to invest in their own marketing to establish their own brand in conjunction with their brokerage firm.
If you are contemplating establishing a new brokerage firm, or improving your existing brokerage firm, we’d be happy to meet and lay the ground work for you. Let's Meet.