Yeah – we’re back with a divisive idea that scares or excites agents – real estate niche marketing. In the dental field, a dentist who takes on all patients is typically known as a “general” or “family” dentist. In real estate, an agent who takes on all clients is just known as a real estate agent.
Crazy, isn’t it? When you need a root canal you’re referred to an endodontist. Need braces? You’ll see an orthodontist.
Want to buy or sell a luxury home? Work with any old real estate agent you happen to meet. 😙
Niching is Enriching
Now, who do you suppose makes more money – the generalist or the specialist?
On average, general dentists earn $125,168 per year. Oral surgeons, however, make an average of $212,303 annually and an endodontist will bank nearly $201,000, according to koolsmilesjobs.com.
Obviously, it pays to specialize – even in the real estate industry. Micro-specialization is, in fact, the best way to build long-term wealth in your real estate practice, according to Seth Godin, former VP Direct Marketing at Yahoo and now an author, blogger and speaker.
While speaking to a group of agents, he claimed that “you’re either the best in the world (where ‘world’ can be a tiny slice of the environment) or you’re invisible.”
And, guess what?
“Best in your world means burning your other bridges and obsessing,” according to Godin. Real estate niche marketing pays.
Burning bridges is hard to do
Hyper-specialization means choosing one real estate specialty to the exclusion of all others. Then, you’ll laser-focus your marketing to that pool of real estate consumers until you dominate the niche. In a sense, real estate niche marketing is about saying ‘no’ to some potentially good things.
Scary thought, right? Burning all other bridges to concentrate on just one?
For real estate agents, one of the scariest thoughts is alienating even one real estate consumer. An example of this is, despite knowing that “when you list, you last,” few agents eschew buyers and become, exclusively, listing agents.
I’m working with a client right now who claims she doesn’t want to work with buyers, yet insists on having a “Buyers” section on her new website.
The fear of driving away even one potential client paralyzes most agents, so they remain in the “pack,” doing the same things as every other agent while wondering why they aren’t more successful.
But, look at it this way
Let’s follow agent Anita Deal, who decided to focus her business exclusively to condo buyers and sellers. She is, in fact, the only condo specialist of the more than 700 agents in her market.
Last year, 645 condos sold at an average price of $362,280.
Although Anita now dominates the condo market in her city, let’s be conservative and assume that, due to her focused marketing, she was able to attract 5 percent of the 645 condo deals in her market last year, or 32 deals.
Her before-split earnings at the end of the year would be $347,788.
Now, according to the National Association of REALTORS, most agents receive 68 percent of their broker’s split.
So, Anita’s year-end commission earnings, by capturing only 5 percent of her niche, are $236,496
What are the chances that she would’ve snagged 5 percent of the condo market in her town had she been a generalist – shooting arrows in all directions?
All Roads to Leads
Real estate niche marketing makes lead generation easier too! The more dominant you are in a smaller market, the more likely you are to get leads referred to you from people who are aware of your depth of knowledge and experience.
But there’s another more subtle benefit – understanding the angles. Lead generation is all about capturing attention – knowing what people are looking for, not just at a surface level, but deeply, enables you to speak their language in ads, landing pages, and emails.
This small but significant edge can push you over the finish line ahead in lead generation and conversion – people want to talk with experts and you’ll look and sound like one because, well, it’s true.
Your Mileage May Vary
Niche marketing doesn’t work in all markets, by the way
Micro-specialization works well in large and medium markets. Agents in small markets, where the client pool is already tiny, probably won’t get the same benefits as their colleagues in the huge ponds.
There are other bonuses to real estate niche marketing
Aside from making more money, narrowing your business’ focus makes branding a whole lot easier. How better to brand your business than by knowing exactly who you are targeting?
Take veterans, for instance. Focus solely on that market and you will know that most of your clients will be male and that they’ll easily get financing.
Then, there’s the fact that, after a while, an expert at anything has all the answers to any question right at the top of his or her brain. No research required and, as you know, research takes time. And time is money.
Plus, think how impressed your clients will be that you know everything there is to know about ranch property in your market. From septic systems and wells to city or county regulations regarding livestock.
If 2018 is the year you decide to stop the relentless chasing of business, it’s time to step away from the pack and dominate a niche market.
What are you going to do in 2018 to identify and mine a niche? Stop right now and make a list of actions you can take and then get started making this the best year yet for your real estate career.