Brian Ostrowiak™ Ugly Graphic
Building an asset. Something often talked about in real estate as a “long term” goal, but few know how to take action towards on a daily basis.
Let’s face it, most of the people reading this blog that sell real estate are working towards not having to sell real estate. What we are working towards is to build a business, and selling or leveraging that asset as our exit plan. Even those who love to sell, and work with clients on a daily basis will understand the reality that in order to truly build more wealth we have to build a team, and expand our operation beyond ourselves.
Fast forward a decade or two, and pretend the day has finally come that you want to sell the biz, and cash out. What do you have of value to sell? More importantly how is your business valued?
“My Brand” probably comes to mind when most people are determining what their unique value is. “I’ve built a brand that people know, and trust”. I’ll give you the benefit of the doubt that your brand really is well known, and trusted. However if you want me to put a price on that how do I go about doing so? What metrics would I use?
Monthly Active Users
Step outside the real estate world, and join the tech community. What’s the number investors are talking about? What’s the thing that makes an app like Instagram worth billions of dollars? Monthly Active Users. Facebook has a lot of smart people, and plenty of capital to hire more. Instagram was a fun app that a company like FB could easily duplicate. Why did they buy it? Simply put Instagram has 300 million active users.(at the time of purchase) Purchasing Instagram, WhatsApp, and other apps enables FB to gain technology and massive audiences. (aka subscribers)
Jumping back to real estate… Web presence is very important. What investors/buyers/appraisers are going to be paying more attention to are the numbers of people actually engaged with the web presence of a brand. Simply put even if you’ve sold thousands of homes, and have built up a large database of past clients; what is of value in your business is the number of people who are still contactable in that database, the numbers of people loyal to your brand, and the number of prospect-able users engaged with your web presence.
Acquire, Nurture, and Maintain
So much focus is placed on traffic and lead generation. We want to capture leads, add them to our database, and nurture those opportunities. Long term follow-up is typically though of as an offline tactic after the lead is acquired. Generating active users requires maintaining our database online.
Your website is not a net, lasso, or bear trap. It’s not just a vehicle to grab people out of the internet, and spit them out into your spreadsheets or CRMs. For the user your web presence is a huge part their interaction with your brand.
When I look at the web presence of many brokerages and teams I often see a scattering of tactics in piece meal. They have a brand.com site, often a simple 5 pager. They have one or several “Lead Gen” sites xyzhomesforsale.com, they have blogs, they have “SEO” sites thisveryspecificlittleneighborhood.biz, and a variety of started and abandoned social media pages. In most cases the over arching brand of the company is not well represented between these properties, and even worse they come and go.
This creates a huge problem down the road. Leads are “captured” by these various properties, and placed into a CRM or multiple lead management systems. This capture, and offline follow up mentality implies that once you’ve got the “lead” it’s yours for life. Back to the tech example; if Instagram generated 300 million users & their contact data, but only 50,000 were uploading/liking photos wouldn’t that drastically change their value? Absolutely.
SOI is not a new concept, and most smart RE pros know that SOI and referrals are a huge source of business. The key problem I’m addressing here is that maintaining contact with SOI is not being done by many or at best requires a very manual approach. This can greatly limit the scale of the business.
What is required to stay top of mind? For many it’s personal quarterly/monthly follow up (probably the most effective), for others it might be simply maintaining thousands of dollars in branding ad spend. The real power of a well put together web presence, and subscriber base is that you can maintain contact with a much larger group of people with fewer resources. The transfer of this subscriber base, and the properties involved is also much easier. This makes your business more valuable, and enables us to over time distance ourselves to do other things.
This is why when we look at our database we need to start asking a few basic questions…
- Are these people returning to my site?
- How many people were “active” or “engaged” with my brand in the last 30-90 days?
- How the hell am I measuring that?
- What tactics am I using to ensure that people stay engaged before, during, and after a transaction?
- If I called these people up would they answer? Would they remember my brand?
- What type of effort do I want myself, my agents, and my team putting into certain types of users?
Quick Start
Here are a few tips to get started answering those questions…
1. Take inventory of your subscriptions: We know how many leads our sources are generating, but what % of those people are staying engaged? Investigate what channels work best for keeping people in orbit when they clearly state they aren’t ready.
2. Define Your User Base: Engaged or active users can be defined in a variety of different ways to suit a variety of purposes. Consider these three user types.
- Active Client
- Past Client
- Qualified
- Unqualified
Decide for yourself what a reasonable expectation for engagement for this user type might be. Obviously our past clients won’t be onsite every 2 days, and the active shoppers might engage on a daily basis. The goal here is to prevent cases of drop off. If a lead registers on our site, and never comes back or is unresponsive it’s likely that we’re not doing a good job on getting them subscribed.
3. Merge your subscriptions together: Your MLS powered site might generate tons of leads, Youtube is a great outlet to generate content, and lots of people use Facebook soooooo…. Upload your cold leads into Facebook, and share your Youtube videos with them in a custom Facebook audience. There are far more ways to communicate with your database than call, text, and email.
TL;DR
- The value of a web property is largely based on the number of people engaged, and the level of that engagement.
- The value of a real estate database is also largely based on the number of returning, referring, and contactable clients.
- Highly engaged users have a greater lifetime value than those who are not.
- Real Estate teams are over focusing on generating new prospects, and letting old ones fade away. This hurts their business in the long term.
- I’ll be revisiting this topic often. It’s important.
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