(Note from Dave: This is the outline of a presentation I was invited to give to a number of realtors, at a seminar sponsored by Friendly Mortgage, here in Philadelphia…)
Advertising real estate in a down market reveals a set of contradictions which make the job of a marketing professional doubly challenging. At the same time that there are fewer interested buyers for your properties, there are often restrictions placed on marketing budgets, owing to shortages in cash flow. In a recession, marketers are asked to work harder, often with lower budgets.
With those concerns in mind, we usually advise our clients to step back and do some “big picture” auditing of their product and brand. Get them back to basics.
We begin by asking the question, “How much of our slow sales are due to the economy, weaknesses in our product or brand, or shortcomings in our advertising strategy?” A thorough audit addressing all aspects of your product and marketing strategy often yields results which can bring a clearer marketing message, with fewer financial outlays. We’ll talk about the economy later; for now let’s address the latter two topics…
Analyze Your Brand’s Strength
Back in the heady years of 2004 and 2005, real estate inventory was flying off the shelf. On top of the availability of easy money and a speculative spirit, Center City real estate was impacted by a genuine demographic shift which had more and more suburbanites taking a renewed interest in downtown living. Product at this time sold easily, owing almost exclusively to market conditions.
In a more challenging real estate sales environment, only superior product draws the smaller pool of buyers to your doorstep. In this climate, marketers and developers must ask themselves, “Is my real estate distinctly branded and does this brand have a unique voice in the marketplace?” Specific points to assess include:
- What are the real advantages my property has in the marketplace? Is it location? Price? Features and amenities?
- Is my brand making empty promises? Beware of the hollow, overly adjectivized copy that most real estate advertising uses. You should be especially mindful of tossing around words like “luxury” and “exclusive” unless you’re sure your product walks the walk. We’re not always sure what luxury is in the new construction real estate market, but sheet goods, Formica and wall-to-wall carpeting don’t qualify.
- Are these distinct selling virtues expressed in thematically consistent ways in all your advertising, i.e., does your brand speak in a consistent voice?
- Have you acknowledged the value of “lifestyle marketing” in your advertising, i.e., does your advertising tell a consistent narrative of the benefits of your product, rather than just listing a matrix of features? Concentrate on creating the image of a lifestyle which is greater than the sum of a list of features.
If, after analyzing your product, you determine there is a lack of distinction in the product itself, this needs to be corrected in one of two ways. Either the product itself needs changing or pricing needs to give…
Analyze the State of Your Marketing and Advertising
One good thing a recession does is that it forces you to reconsider spending decisions you’ve probably taken for granted for years. As part of the “wholistic audit” I earlier alluded to, we ask our clients to make a list of all their marketing expenditures. By figuring out how you’re spending your current marketing, you might think of cheaper, nearly-as-effective alternatives…
Below are some customary “big ticket” items developers spend money on, with some suggestions for increasing ROI and decreasing overall cost…
Print Advertising. Probably still the most expensive advertising developers do (unless they’re doing broadcast or radio,) print advertising is essential but pricey. Only you can know how well your print is performing but there are things you can do to either enhance the value of your print ads or validate their worth. Constantly scrutinizing for the basics is one way to do a quick “audit” on your print ads. Is there a call to action? Is it clear and obvious where the project is located? Is a central “value proposition” communicated in the ad? Finally, is there a lifestyle narrative or message? Finally, are you developing messaging which speaks to the unique circumstances (increased choices and lower pricing) which a recession presents?
Project Web Site. The central task of your project’s web site is to get the phone to ring and for prospects to make appointments to see your offering. As a sales tool, it has the unique ability to satisfy both the left and right brain goals of your advertising, namely, communicating specifics and details related to your project, as well as communicating — through layout, photos and renderings, sound and animation — the mood and lifestyle your project evokes. From a critical standpoint, the web site can be evaluated from the criteria offered earlier in my presentation. Over the long haul, your project’s web site is actually one of the least expensive of your marketing costs (exclusive of any search engine marketing you might undertake…)
Online Marketing and Communications. One thing we find our clients are increasingly interested in is leveraging the power of their web site and internet communications. Email blasts are inexpensive and can offer alternatives to a heavy reliance on print advertising. Develop a mailing list of every broker in the area in which your project is located. Hire us to design templates for you, so you can speak to this audience on a regular basis. Watch the value of your broker communications go up and your expenses go down…. Another tool our clients use increasingly is by using their web site or a special micro-site we design to augment your print advertising. Running a promotion in the paper this week? Direct your customers to a sub-page within your web site. That way, all traffic from the ad will be logged, giving you immediate feedback on your advertising return-on-investment…
Do Some Thinking About Economic Issues
We’re not financial guys, but we do have some thoughts about pricing and incentives strategies you might develop, in direct response to the overall sluggishness of the economy. Some of these are:
- Pricing. If your brand is all about luxury, be very careful about responding to market conditions by dropping pricing, and, if you do it, do it quietly. Part of the mystique of luxury brands is that they don’t go on sale. Besides compromising brand integrity, sales on luxury properties make buyers suspicious and cynical. “If the developer can cut his pricing 35% on this 2.5 million dollar condo, what does that say about the profits he was making prior to his sale?”
- Try upgrades over price reductions. Nobody likes to know their neighbor just paid twenty percent less than they did for the same condo. Rather than taking money right off the top of a new construction sale, try sweetening the deal with more amenities or incentivized financing.