Real Estate Business Down? How to Get Back the Love

Real estate web development, Vancouver, BC

Ten years into their marriage, a couple goes through a bit of a rough patch. The husband isn’t feeling loved the way he used to. He reacts by making some adjustments to his investment. Date nights every Friday, with entertainment and a nice meal out, are reduced to sharing a latte once a month. The gorgeous box of hand-selected roses she learned to expect on their anniversary now is considered an unwarranted expense. So this year she receives a package of celophane-wrapped daisies from the corner store. Rather than spending an evening watching movies together at home, with a bottle of quality wine, he thoughtfully texts her while shooting pool at the pub with his buddies. Within two months, the old magic is back, and he begins to restore the former loving gestures.

Yeah right! That misguided soul should have a divorce attorney on speed dial. Any hope of regaining the love always requires more investment, not less.

Getting back the love (when sales take a nose dive)

A few weeks ago I was invited to a meeting with a prospective client. She wanted to know what we could do in marketing herself online, for “super cheap.” Apparently the digital marketing agency she was with was “too expensive”, and she was looking for a lower cost solution.

I was curious to know why she felt she needed to cut back on marketing. She told me homes weren’t selling, sales were down, so the marketing budget had to be scaled to match revenue. What she was describing is classic reactive marketing.

She went on to lament about the good old days, when she was selling a lot of properties. Back in the day, she was spending upwards of ten thousand a month in advertising; no problem. She told me she had ads running “in the paper, in real estate rag, and on the ass end of local buses,” and she had been “papering her farm area with postcards every month.” But more recently, sales were in the toilet, so she had only been able to afford $800 a month for SEO, content creation and social media engagement. Sadly, even that was now too much.

I did some quick calculations and discovered the marketing/sales ratio was almost exactly the same now as it had been in 2007. As she spoke, I realized that every time there had been a dip in sales, she had compensated by reducing the marketing budget. Sales then adjusted to reflect the reduction in exposure. She reacted to that drop, cutting marketing further. No surprise; sales dropped again… And now she was nearing the very bottom of a downward spiral  and facing the very real prospect of finding a new way to make a living, after 18 years.

According to the ratio, proven over the past seven years, cutting the monthly marketing budget by a further 40% should reduce sales by roughly the same percentage, or worse. It wouldn’t even cover her desk at the brokerage. It wasn’t my business, but the numbers sent a shiver down my spine.

My recommendation was for her to consider increasing the monthly marketing budget, and becoming very actively involved on her end as well, with my coaching. Effective blogging and social media can be learned, and I proposed weekly check-in meetings via Skype. Leveraging resources in that way, together we could realistically achieve four or seven times the interaction with prospective clients.

When sales take a dip, the only thing that will turn things around is… well, sales :-). Cutting back on visibility will only cause them to dwindle further. When cash flow runs thin, it’s easy to lose site of that.

Robert Herjavec commented on Shark Tank recently, “Sales is the life blood of any business.” Without marketing, and new clients, a business will surely die. Some agents try to build market share on referrals alone. Relying solely on word of mouth, they often grossly over-service and even pester their existing or past clients to secure new leads. They refer to this a “free” advertising. But time is never really “free.”

A downturn is the time to invest more — become proactive — forging ahead instead of retreating. I have seen a full-on effort in content development and social media engagement, and perhaps some AdWords, coupled with passionate follow-up turn the tide even in the eleventh hour. By dramatically increasing interaction with potential buyers and sellers, there is always hope for a comeback.

Final thoughts

Have you ever felt you could not afford to invest the time or money ongoing marketing required? (I have. Been there, done that… reverse economy.)

Ever found yourself entering the dreaded downward spiral of diminishing returns? When revenue falters, do you blog more, or less? Engage more in social, or less? Hire a consultant or marketing pro, or let one go?

Have you considered some one-on-one help? A free 20 minute coaching call may be a game changer.

Free 20 Minute Coaching Call

Comments

  1. says

    Hi Cole
    Interesting story indeed. I can of course understand their budget cutting, but it is as always a little short-sighted and reactive.
    As someone who is just starting out in business I have recently come to the same realisation as you, spending must come before earning. Although it is nice to think, we can afford to spend more later once the income is ok, perhaps you will never get the income because you never spent!
    So I have been rethinking that, and outlaying at least a little money on advertising and learning the ropes there.
    Better to have spent a little and failed, than to have great services (and shiny machines) that no one knows about or buys!
    great stuff
    ashley
    Ashley recently posted…Leadpages Review: Create Amazing & High Converting Landing pagesMy Profile

    • says

      Hi Ashley,

      I couldn’t agree more… the great services, shiny new machines, etc. don’t matter much, if we don’t have any prospective buyers. It’s kind of a “forest for the trees” thing. We can see it so clearly from further back, but to the business owner, unpacking new stuff just feels like a step in the right direction. Maybe it brings back memories of when they started the business.

      I often ask my new clients, “How important is the appearance of the website nobody ever visits?” They’ll give me a budget figure of perhaps $5,000, for a new website. I’ll ask them to hold that thought, then suggest investing only 1/5 of that on some website upgrades to the platform they already have, and the rest into content, and marketing that content. With the qualified traffic their site should gain from those efforts, there should be sales and profit. “Why not invest some of that profit into a complete overhaul, down the road?” Justifying the upgrade with sales should make perfect sense to a business person. The problem is, a shiny new website they can see on a screen, and show people, is going to be more tangible than content marketing. Where’s the pride of ownership in blog posts, Tweets, G+’s and Facebook Likes?

      Tough crowd :-).

      – Cole
      Cole Wiebe recently posted…Reactive Marketing, and Pulling Out of the Dreaded Downward SpiralMy Profile

  2. says

    Hey Cole,

    Interesting write and thanks for sharing. Honestly speaking, I came across a few clients recently and they have the same thoughts. Cheaper = Better.

    Oh well, competition world I guess? *p/s of course, the rest are history … if you know what I mean!

    In today’s world, you need marketing and like what you said, you need to put more funds in paid marketing. Seriously.
    Reginald recently posted…Advanced Tutorial For Setting Up GetResponse For Email MarketingMy Profile

    • says

      Hi Reginald,

      I’ve pondered the “go cheap” approach to marketing until my head hurts. :-) Where, in life, do we receive all of the benefits, by investing the very least? As I covered in the post, it certainly doesn’t work in relationships. If we reduce the maintenance on our cars, they break down. If we get the cheapest hotel room, we can expect a filthy dump with bed bugs.

      “We’ll invest more into marketing when business improves.” Got to love that! Why would anyone believe things will improve, by pulling the plug on life support (sales)? I suppose all we can do, at times, is find the humor in it.

      – Cole
      Cole Wiebe recently posted…Reactive Marketing, and Pulling Out of the Dreaded Downward SpiralMy Profile

  3. says

    I think the way I look at things now is different from when I first started my blog Cole.

    For the first few months I was afraid to pay out much money on marketing and was looking for all the freebie options I could find.

    I soon came to realise that you do actually get what you pay for and the only way to build momentum is to invest in your business.

    Don’t get me wrong, I still don’t go overboard and I’m careful how I do it but building and investing in some micro niche affiliate sites has certainly helped.

    I won’t be a millionaire tomorrow but I’ve made more money this year than I have in the last 10 from websites and blogging.
    Tim Bonner recently posted…If I Were Buying A WordPress Theme Framework, This Is What I’d WantMy Profile

    • says

      Hi Tim,

      I’m sorry to hear you came to some of these discoveries through hard experience. True enough, do-it-yourself marketing, and free stuff, don’t save money when the revenue could have been greater by choosing a paid alternative.

      I admit that over the years I have often catered to the notion that the customer is always right. They want to essentially pay nothing… okay, we’ll try to accommodate that. But over time I’ve witnessed the aftermath, repeatedly. I didn’t do them any favors by letting them go cheap.

      Effective internet marketing is built to a blueprint. And quality materials and services need to go into the structure if it’s going to stand. For 2014 I’ve made the commitment to work with clients that want to do things right. Surprisingly, to most, it doesn’t cost that much more at all.

      A good foundation is premium, built-for-WordPress hosting. (We’re very happy with Media Temple and WP Engine at present. Thirty dollars a month for either WordPress plan.) Server timeouts or suspensions (usually due to plugins on very restricted shared hosting) and email problems are so not worth the ten to twenty bucks a month a business owner might save.

      A quality SEO-friendly, secure framework, like Thesis or Genesis, is also worth every penny. I can become very excited about software that just works, with glitch-free automatic updates.

      Off-the-shelf themes are cheap or even free. Having a site that looks like thousands of others won’t kill business, but it can prevent a site from standing out from the crowd. I believe that effective content presentation benefits from being visually memorable. The real downside, though, is that they tend to be one-size-fits-all. To cater to every conceivable need, a lot of extra code must be included in a flexible theme. That can lead a bloated, heavy-weight site that’s rather slow loading. While optional, right out the gate, I believe a clean, fast-loading, easy to update, custom design by a Thesis/Genesis developer is money well spent. Of course, I’m biased in that recommendation.

      Two other suggestions I’ll usually make to clients are CommentLuv Premium and Gravity Forms (where forms more elaborate than Contact Us are required). That’s about it. A few structural basics and they’re good to go.

      Professional bloggers, like yourself, will generally acquire the content creation and social media skills required to write and put their content in front of the right eyeballs, but small businesses should seriously consider bringing a pro on board to assist them, either with SEO copywriting and social media, or at least some coaching.

      – Cole
      Cole Wiebe recently posted…Reactive Marketing, and Pulling Out of the Dreaded Downward SpiralMy Profile

  4. says

    Cole- As you know I sell promotional products which many companies incorporate into their marketing plan. It never seizes to amaze me that when times are bad the companies cut back and that is the time they should be spending more on marketing to stay in front of their target audience. Out of sight, out of mind is very true. We will call our customers to see if they want to order more and we hear all the time, due to the economy we are cutting back.

  5. says

    Hey Cole,

    As you know I’m a one man show so of course I don’t have the overhead that these types of companies do but I totally understand what you’re saying.

    Although no results can ever be guaranteed it’s obvious to me that if you don’t step it up then you’re not going to get any results but if you can’t afford to pay for the ones you were getting then I’m sorry to say that it sounds like their company won’t be around for much longer.

    I too came into this really pinching pennies because I was unemployed and having to be cautious. If I can generate leads for free I most definitely will but I had to try other avenues along the way to see if I couldn’t generate more leads in other areas. You never know unless you test those waters. It’s just part of the process and running a business.

    ~Adrienne
    Adrienne recently posted…How To Insert An Image In An Aweber Opt-In FormMy Profile

    • says

      Hi Adrienne,

      You’re right, the situation is different for a professional blogger. A blogger’s “job” is creating content and marketing that content. When traffic and revenue decrease, they just post more, comment more, guest blog, cross-promote, and become more active in social media. Boosting traffic and sales rarely requires an injection of cash. Being a one person show has it’s advantages, to be sure. For one, you always know exactly which butt to kick to pick up the momentum. :-)

      Our small business clients frequently put in 6 or 7 days a week. The bookkeeper is often the first to be laid off in a downturn. So they’ll stay in the office, into the wee hours of the evening, updating the books. If they don’t have someone tending to their marketing, it won’t happen, so there’s little hope of increasing sales and pulling back out of the slump. Cutting the marketing budget, as with any other “expense”, can be much like pulling the plug on life support.

      – Cole
      Cole Wiebe recently posted…Reactive Marketing, and Pulling Out of the Dreaded Downward SpiralMy Profile

  6. says

    It’s sounds weird but when I was created my first blog before years. For a lake of money I searching for the free things that helps my blog and give it a power push too.

  7. says

    Hi Cole,

    Great write up!

    As you wisely stated, love always requires more investment, and one cannot do that by
    being reactionary because of fear.

    It’s also true that “the vision” some people have is myopic, and it takes someone on the outside looking in to give them greater clarity and focus.

    Kind Regards,
    Bill
    William Butler recently posted…Helen Keller: A Rich Legacy of Wise WordsMy Profile

    • says

      Hi William,

      When they started their businesses, many borrowed heavily into very basic lease improvements and to build their all-important customer base. They understood that the only way they were going to service their debt was through sales. You’re very right; fear can influence very poor decisions. Paralysis by analysis tends to cause business owners in crisis to bury themselves in spreadsheets and come to view everything as an expense.

      – Cole
      Cole Wiebe recently posted…Does Blogging and Social Media Actually Work for Small Business?My Profile

  8. says

    Hi Cole,

    I can never understand that mentality of spending less when business is down. My motto has always been “you gotta pay to play” no matter what business you are in.

    Marketing is the key! Now there are many ways to do it and get our product/services in front of our target audience.

    As a blogger there is so much you can do with the word-of mouth and opt-ins. Yes, there is that list. But what about people who you don’t know yet. That is where the marketing comes in. Like you mentioned above “Effective internet marketing is built to a blueprint.”

    This Blueprint has to be carefully done with a sales funnel, a marketing campaign, and decide on your budget plan. It does take some homework to work out, but when all the pieces are put together….it’s a win win situation.

    As long as we are persistent and have a good marketing plan, when business takes a dip, we need to increase our advertising.

    -Donna
    donna merrill recently posted…Why Updating Your Blog Is ImportantMy Profile

    • says

      Hi Donna,

      Many clients over the years received the advice to pull the plug on marketing from their accountants, as well as encouragement to invest in the ability to provide a broader range of products or services. I’m not sure exactly how investing heavily to increase options, customers will never hear about, works on the balance sheet, as I’m not a bean counter. Throwing raw panic into the mix certainly doesn’t help.

      I believe that if business owners, experiencing a dip in sales, took a moment to reflect back on what they did when they grew their companies, they’d see that they feverishly marketed their way out of a hole in the ground to gain traction and turn the color of ink to black.

      You make a very good point. Online marketing is definitely one of those situations where “planning our work, then working the plan” can yield impressive dividends.

      – Cole
      Cole Wiebe recently posted…Does Blogging and Social Media Actually Work for Small Business?My Profile

  9. says

    Hi Cole,

    As usual, great insights. I agree with what a lot of people are saying here in regards to your post. I don’t think that when sales are down, there is a need to do fine he marketing spree, but with slight changes. It’s all about adapting to your surroundings, and not going extinct.

    • says

      Hi Amiti,

      Thanks for your input. I wasn’t advocating a marketing spree, but if a business owner can look beyond sheer panic, they’ll realize that marketing is the one place expenditures cannot be cut.

      To survive a down turn, overhead expenses need to decrease, and sales (cash flow) must increase. Unfortunately, when the owners are already working ridiculous hours, covering their own work, plus that of staff members they laid off, they don’t have the time, skills or energy to market themselves online. (These people aren’t professional bloggers with a web copywriting and social media skill set.) In all the turmoil, marketing is often confused with overhead expenses, and cut. Without an increase in sales, reducing overhead usually only postpones the inevitable.

      – Cole
      Cole Wiebe recently posted…Does Blogging and Social Media Actually Work for Small Business?My Profile

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