looking for your input: Marketing like the Big Boys - Posted by Tyler

Posted by Mark R in KCMO on April 27, 1999 at 10:07:05:

TOMA is a nice phase that institutional advertisers and agencys like to promote basicly because it’s easy to illustrate via polling and surveys.

I think you have perfectly discribed what Hamms market segment is.

The image that you percieve for micro brewerys is a small - non corp big guy, and that goes further to the point of who do you want to be the big boy Mr Corp or just lil ol’ micro real estate company.

As I have nothing against large presence in a market place, that is not what your marketing effort should be focused on.

It doesn’t matter what your survey numbers show in your ADI. What matters is your reach, and deviation by segment.

To simply state my thoughts focus on the core.

Mark R in KCMO

looking for your input: Marketing like the Big Boys - Posted by Tyler

Posted by Tyler on April 26, 1999 at 01:18:13:

I’m in the process of putting together a hardcore marketing campaign, and have had some questions come up in my mind. I’d like to get some feedback from the board. The business, of course, is buying houses–lease options, wholesale/retail, owner finance, mobile homes, and paper.

The big question,in a nutshell:

Appear BIG or appear small

Now here is what I’m battling within myself. (what follows is product of too many nights lying in bed thinking way too hard!)

In a typical company, when planning marketing strategies, a major focus is on establishing TOMA (top of mind awareness) within your market. Now this means you create your own Nike swoosh, you have a catchy phrase that “says it all” for your business, and you put it all in front of as many people as you possibly can.

The idea, here, is to establish a positive image and be the first to come to mind, when someone is in the market for your services.

OK. This is nothing new, if you’ve owned a business.

HOWEVER, I’m wondering whether or not this is the business to come across as a big corporation.

Is it better to appear more private-I-work-out-of-my-house-ish? Is there less of a chance that your average home seller will be intimidated, or think they will be “ripped off”, if they think they’re just calling some local guy with a lot of money?

If you appeared too BIG would you send an image of “they are obviously making a killing off of people! I’m not gonna let them screw me!”

OR, would it simply project credibility and reliability?

Would it be better to come across as “yes ma’am, I’m a local investor who’s just looking to improve my portfolio”?

What would get a better response:

“Hi, this is Jack. Leave your name and number after the beep” or “Hello. You’ve reached (we buy 30 houses a month company). Please leave your name and number…”

Now keep in mind, when I say BIG, I mean BIIIG. I’m talking marketing madness. So when you give me your feedback, remember that I’m not just talking about having a business name and a logo. I am talking about really marketing the business as a major Corp. An office with a big sign on the main-vein of town. A name and logo so good, that you’d “swear you’ve heard of them before”.

There is a difference, friends. There are a lot of investors who play the game on the phone and in the paper, but I’ve NEVER seen this kind of service marketed full throttle. In just about every other service business, that’s where it’s at. In this one…well…

NT

Re: looking for your input: Marketing like the Big Boys - Posted by D.Henderson

Posted by D.Henderson on April 26, 1999 at 11:46:54:

This may not be what you are looking for, but have you thought how much leverage you would have if you used that same money? You will spend A LOT of money and when you are finished all you will have is window dressing.
That same amount of money could put you in position of leverage in buying property.
I would vote to go for the property, window dress later when you are the big boy.
As the saying goes. Don’t sweat the small stuff.
Best of Luck to you in Real Estate.

Marketing like a Big Boy - Posted by Ben (IN)

Posted by Ben (IN) on April 26, 1999 at 10:16:42:

Dear Tyler,

First of all, forget about image or any kind of image advertising. Sellers just couldn’t care less about how big you are, how wonderful you think you are or how long you’ve been in business. If you think that stuff is important you are set to waste a whole bunch of money.

THe “only” kind of marketing you should be doing is direct response marketing, where you have chosen in advance who your highest probability most motivated prospects are and you are contacting them directly with a compelling marketing message tailored especially for them, and asking them to respond. This increases the effectiveness and productivity of every dollar you spend on marketing.

And that’s got nothing to do with BIIG, or storefronts or any irrelevant stuff like that. Please, get it out of your mind that any of that matters. What matters is the sellers’ wants, and they have nothing to do with your image.

Let’s face it, a seller isn’t going to call you because you’re big, although your ego my like to think they will. Fact is, they won’t. Because they don’t care one whit about your ego. They care about themselves and what “they” want. So you’ve got to talk to them in terms of what “they” want. And what most of “them” want is full price, all cash.

So given that’s not an option for any investor, you want to sift out the sellers whose circumstances that have lowered their expectations for selling to more simple things like “can you save my credit”, or, “I just need $500 to move”. i.e. motivated sellers. So that mandates developing a marketing message that gives motivated sellers what “they” want. Which is usually a quick sale, cash, and/or debt relief.

Talk to them in terms of what “they” want, not what you want.

Which brings you to targeting, and developing a marketing message. You are wanting to buy houses, mobile homes, and paper. Well which one is it? IF its all of them, you going to be less effective and less profitable. If you try to be everything to everybody you end up being nothing to nobody.

Take a look around this board. Terry Vaughan doesn’t buy houses, units, MHs, etc. He buys portfolios of MH notes. His focus is on MH notes. He is the best at it, and when people think MH notes they think Terry Vaughan, and they give hhim a call. David Segars buys MH parks. He doesn’t waste his time and effort trying to buy houses or notes he just buys MH parks. And when people think MH parks they think David Segars. Jim Piper buys low end SFR’s with owner financing. He doesn’t fool around with high end houses or multi-units or MH’s or notes. He’s found that what he does best is by $50K homes with owner financing. So when people think low end homes with O/F they think Jim Piper (among other things :)).

So decide what your target deal is going to be. Are you going to buy high end houses, low end houses, fixers, nice houses. What area, what’s your territory going to be? What kind of seller are you going to target? Do you have a clear idea of the level of motivation you want to work with? Think about all these things and arrive at your target deal.

Next, develop a unique selling proposition. Its more than just “a catchy slogan that says it all”. It answers the question which all sellers ask, "why should I do business with you, above any and all options, including doing nothing, or whatever I’m doing now?"
And what you say to them should elicit a response of, “Really, how do you do that?” This is unrelated to R/E, but a good example of a USP that does that is FedEx; “When it absolutely, positively, has to be there, overnight.” Or Dominos; “Fresh, hot pizza in 30 minutes, guaranteed.” Its clear, concise, meaningful, and tells the buyer exactly what they can expect.

Once you’ve targeted your most desired seller, created your USP, run direct response lead generating ads, send direct mail to your target sellers offering further information. Then set up a voice mail that will take the calls and pick up the seller information for you. The motivated sellers will jump through all the hoops you put up for them, the less motivated types won’t. The net result being you sift out the low probability sellers and spend your time speaking “only” to motivated sellers who fit your most desired profile of sellers you want to deal with. And that means more deals, higher profits, more often.

So if you are gearing up for “marketing madness” are you talking about cutesy ad agency jibberish, or tightly focused marketing the actually gets results? The difference between the two is spending a lot of money, and making a lot of money. Just ask the “big boys”.

If you want some good books on direct response, e-mail me, I’ll give you a list.

Best of luck,

Ben Innes-Ker

Re: looking for your input: Marketing like the Big Boys - Posted by Bob-Tx

Posted by Bob-Tx on April 26, 1999 at 10:01:19:

Interesting dilemma yes?! I believe BIIG does not translate into a negative in your customers mind unless your people communicate that. I think the better focus is on how the business looks, acts, feels to the public. It is your systems that will make the business appear substantial yet feel good to your customer. E-myth stuff here cuz I just finished the book, but it seems to me that you have to look at the business from the outside, determine how you want it to look and innovate from there. Model the business as though you will have 15 cities on line in two years, 30 in the following year. You may only have one office, ever, but by creating a business model franchise you bring to the customer the look and feel of substance that translates into comfort and confidence.

In Dallas we have one rehabber that is franshising, has billboards up around town, looks BIIG!! In truth, I have never come up against them in the marketplace, but they sure look BIIG. It is curious to me why I don’t see more of their signs in front of houses!!

I believe “substantial” portrays success and that we all prefer dealing with successful businesses and people. Your seller feels comfortable that you can do what you say, your buyer feels good that the house was well rehabbed and that there is something standing behind the promise of a solid deal.

It will be interesting to see what others have to say on this subject…I say go for big, but do it right.

Devil’s advocate…’()’ - Posted by Tyler

Posted by Tyler on April 26, 1999 at 13:14:50:

D. Henderson:

Quick question.

Today, you decide (let’s say you’re feeling really stupid) that you’re broke, so you need some quick cash. During a commercial break while watching Jerry Springer, you suddenly remember driving by a big yellow and black sign that read “Quick Cash for Car Title. no credit check, 15 minutes”. You quickly go to the junk drawer, pull out the title to your 73 Datsun, wipe off the dried on Taco Bell Mild sauce, and head downtown to collect your cash. Happy as a lark, you take your $250 (that you will be paying $40/mo payments for 3 years to repay) and go buy a couple cases of Hamms and save the rest for your best friends bachelor party tomorrow night.

Now, in this predicament, had you NOT seen that sign,you COULD have been smart enough to go to the paper or yellow pages and try and find someone who may have been able to loan you the beer money on similar or even better terms. But because you drove by that sign everytime you went to the laundrymat (once a month) for the last 2 years, it immediately came to your mind when you were in need of that service.

Now tell me, would a big “I BUY HOUSES” sign outside your office be window dressing…or could it just possibly be the best couple hundred bucks you’ll ever spend?

NT

By the way, I hate Hamms. It was only an example!

Excellent Post Ben - Posted by Mark R in KCMO

Posted by Mark R in KCMO on April 26, 1999 at 13:25:25:

Excellent post Ben!

I think the real propblem will be finding the big boys in this field.

I don’t think the home seller could care less if this is a part time biz of you deal in 5 states.

Do you meet thier needs?? if the answer is yes the what else is important.

Mark R in KCMO

Some clarification… - Posted by Tyler

Posted by Tyler on April 26, 1999 at 12:49:09:

Ben,

Thanks for expressing your opinion on this subject. That IS what I was hoping for…arguments on both sides of the fence. I could argue both sides equally as well, which is why I’d like to hear other’s feedback.

However, after reading your post, I realized that there are a few things that I guess need to be cleared up.

First of all, I’m not talking about tooting my horn about how big and cool I am, how long I’ve been in town, or how many houses I buy. If that’s the message I gave you, that’s ALL wrong.

You said:
>>And that’s got nothing to do with BIIG, or storefronts or any irrelevant stuff like that. Please, get it out of your mind that any of that matters. What matters is the sellers’ wants, and they have nothing to do with your image.

I have to say I disagree. I think whether or not you realize it, YOUR image has everything to do with your business. If you don’t believe that, try driving a piece of crap car up to your next prospects home and see what their response is.
I DO AGREE that the sellers needs are A1 important. And that’s EXACTLY what any “catchy tell all” phrase would target: the sellers needs. I’m not talking cutesy, here, Ben. You hit a couple of good examples with Fed Ex, etc. That’s what I’m talking about. This is by no stretch of the imagination about “ego”. This is about taking my services to the next level of professionalism in the community.

Regarding your comments on target marketing. You’re really preaching to the choir on that one. I know exactly how I will target each segment specifically, because they are all a tad bit different. YET, at the same time, they are all a part of the same single entity.

I know I am probably out on my own on this one, but I couldn’t disagree with you more on your comments about focusing on ONE segment of the business only. I don’t know about you, but I DON’T like turning away money. I think a lot of people might say, I’d rather be REALLY good at one thing, then pretty good at a few things.

NOT me.

I say, I’d rather bust my butt, do my homework, and be competent at as many things that may come my way. As LeGrande would say, a Transaction Engineer of sorts.

I’ve called “I Buy Houses” ads before and can’t believe how many times I’ve heard "I get so many calls on cheap mobile homes, but I don’t want those junkers. I don’t know how to make money with them."
or
"paper? What’s discounting?“
or
"I just get a lot of calls from people with no equity, and there’s NOTHING you can do with those. I’m looking for properties I can steal"
or
"the property wasn’t in poor enough condition for me to buy it as a rehab. I learned that I only should buy props that have overflowing toilets and blackberries growing in the front room.”

My point is that I see a lot of people getting tunnel vision, and turn away A LOT of business in the mean time…because they are “focusing”? I think maybe it’s more like lack of focus. Take the time to learn how to take advantage of as many of the deals that came your way as you possibly can. Put a system in place that allows you to do these things, and do them well.

I agree with your final remarks, Ben. “Cutesy ad agency jiberish”, as you put it so well, is a complete waste of money in almost every business and market. I spent a good portion of my business career on the other side of the advertising fence. It’s fun to learn what works and doesn’t work, when you’re spending someone elses money! LOL

NT

I’m always up for good brain food…e-mail me the book titles, I’d love to read them!

Re: Devil’s advocate…’()’ - Posted by JohnBoy

Posted by JohnBoy on April 26, 1999 at 13:22:01:

Hmmmm??? You hate Hamms, but it was only an example.

Now what popped into your head that made you think of a beer you actually hate?? Was it their commercial with the bears? LOL

I think you have an interesting idea and would be interested in hearing how it turns out after you’ve tried it.

Re: Excellent Post Ben - Posted by JohnBoy

Posted by JohnBoy on April 26, 1999 at 13:44:46:

I think what Tyler’s point was, he wants to create a mind set in peoples head. If his marketing techniques can give people the perception that he is a big company portraying himself as the king fish of home buyers in town, then people will tend to call on him first.

If you think about it, isn’t that how real estate companies try to market themselves? If you were a typical homeowner wanting to sell your property, what real estate company or agent would be the first to come to your mind? Why?

So what if you were to find a way to make yourself appeal to the people that need to sell fast, or don’t have any equity to pay a realtor, or facing foreclosure, etc.? Where do these people usually turn to try and sell their home? This are every day typical people out there that don’t know there are investors like us that exist. Usually they turn to a realtor or sometimes they see the “I Buy Houses” ad in the paper. So what if you could find a way that your company sticks in a persons mind and whenever they need a fast sale or know of someone that needs a fast sale they think of calling you first before calling anyone else?

If people have a perception of thinking your the king fish in town because of seeing your marketing all over town that makes them assume your a major buyer of houses, then for the most part they will assume you would be willing to pay the most since you appear to be so big!

The end result is, you get first crack at making the deal. You know what they say, “The firstest, gets the mostest!” LoL

Here We Go - Posted by Ben (IN)

Posted by Ben (IN) on April 26, 1999 at 22:36:32:

Tyler,

Regarding your image. It really does mean nothing to your seller. If you want to make yourself look “big company”, fine, but motivated sellers don’t give one kahuna!

People call because you are right in front of them with an ad or letter talking directly to them about relief to the pain they are experiencing at thaat time, not because you are big or have “presence”.

What I think you’re getting at is positioning, which is the place you stake out in the sellers mind relating to what they know they’ll get from you. That’s nothing to do with image though, that’s a result of your focus in the market you’re working and the power of your USP. Positioning talks to the seller about what they’ll get and image talks to you about you. You can powerfully position yourself in a market while working out of a 1 brm apt, and beat the pants of a “big company” working from a corporate style office.

Regarding focus, I’m happy to turn away mobile home deals and no equity deals to focus on just what I’m looking for; higher dollar houses with equity that will yield $20K+ on the back door. I’ve just decided I’m happier getting those big paydays rather than the little paydays with the MHs. My choice. But if I get distracted putting these little MH deals together, and a seller calls with his $250K house I know I can get for $220K and resell for $265K, and he slips through my fingers because I’m off the market working with the MHs, that’s not too smart. THAT, my friend is turning away money!

The thing about narrowing your focus, is that once you decide what it is you want, that’s all you see. So if you decide you’ll only consider killer deals, and you ramp up you marketing to get boatloads of people calling, guess what? All you will end up doing is killer deals!

Sure, make sure you focus on an area where there’s opportunity. But once you set your sights, your life becomes a lot less complicated.

Creative R/E is a little complicated. We have so many choices. THere are lots of average deals out there too. Specialists get paid more though. Ask a Brain Surgeon what he cops every patient compared to a General Physician. Fifty times as much. Easy. Same thing here. Ask a guy who’s got a machine set up for churning out one or two particular types of deals, and does many of those deals, what he earns per year compared to the General R/E Practitionor who does a bit of this, a bit of that, running around trying to do ten different things at once. Answer: 20 times as much.

Using your argument, McDonald’s is missing the boat because its not serving steaks, or Chinese food. And FedEx is missing out because its not in the trucking business. All of these major league business got major league because they have sublime focus and don’t swerve an inch. THey do what they do and they dominate their markets. I think majorly minor league guys like us should take a cue from them. Learn a bit more about what they do to make the big bucks.

Yours,

Ben Innes-Ker

P.S. I drove my crunched up piece of crap '83 Dodge pickup unto the driveway of at least my first 20 deals. It had oil leaks and smoked. Deal #1 I had jeans with holes in the knees (no money). Deal 2 was a $150K house in perfect shape. When the seller is motivated Tyler, it just don’t matter. Anyway, that’s not image, that’s paying your seller the respect of looking decent. More to do with sales than image.

You have answered your own question - Posted by Mark R in KCMO

Posted by Mark R in KCMO on April 26, 1999 at 13:36:30:

NT,

You have pointed out the major flaw of the top of minders.

As you might have noticed the Hamms advertisments to the point that your awarness is high, it still isn’t who you are planing on doing business with.

That is where top of mind looses focus, a targeted campaign works much better than a broad brush.

Was ther money well spent to get you to know thier name??

Quick, name the company that buys the most single family homes in a year??

Does the answer to that question need to be your company?

Use thier model and follow through it should be a good starting point for you.

Mark R in KCMO

Sears was the nations largest - Posted by Mark R in KCMO

Posted by Mark R in KCMO on April 26, 1999 at 14:05:48:

Johnboy,

Sears was the nations largest general merchandise catalog retailer when they shut down that division.

As I don’t disagree on the concept of a presence in the market place.

There is a priority list of what you do first, next and last.

Each focus contains a wider market.

One examlpe would be marketing to you current customers (for purchases or referals)

The widest would perhap be marketing to people that you predict will move in to your target within the next 5 years.

In marketing I don’t believe that you can skip levels, I although I know people who try.

cover the first market untill you see no further results from increased dollars in that segment, THEN move to the next segment one step futher down the list of broader targets.

Hope that helps

Mark R in KCMO

Re: Here We Go - Posted by Tyler

Posted by Tyler on April 27, 1999 at 02:20:17:

I must admit, Ben, I’m enjoying your perspective. I hope you’re not getting your feathers all ruffled up on your end…judging by the “HERE WE GO”.

Anyway,

I still think I need to clarify further, because a lot of your points I agree with. Maybe I need to elaborate on my ideas of “BIIG” and “storefronts”, because we are getting a little crossed, here.

When I say “marketing like a major Corp”, I’m talking about doing things more professionally than any small business owner I see around my area. And MUCH more, than any investor I know around here. On most of the investors business cards I have, their name is twice as big as the message (I BUY HOUSES, etc).

This is exactly what you’re arguing: that the seller doesn’t care about your name or how long you’ve been in business. I agree with all of that.

But here’s what I mean by being big, presenting a good image, and at the same time (as you accurately inferred) positioning myself in the market:

You never know when or where you’ll find a motivated seller, right? Pretty thin market. So if you CAN position yourself in the mind of the community, BEFORE they need you, then when they ARE ready to find you, they will know where you are, or who to call.

I personally think it’s crazy to think that everyone who gets in a tough situation, with their back against the wall, will immediately go to the “Real Estate Wanted” column of the classifieds. Quite frankly, I would bet that a good portion of the population doesn’t know the ads exist. Even for the folks who DO know about those ads, there will be many who might not even call because, IN THEIR MIND, they don’t see how you could help them.

If you don’t see a solution to your problem, it’s hard to know who to call to get a solution. Does that make sense? I’m saying that while there are lots of people that will go right to the classifieds, find your ad, and call you, there will be those that never make it that far. And so, who will they call first? Maybe an agent,who knows. Maybe they’ll give up and just go into foreclosure. Too bad…we could have helped them.

As an example, let’s say that you drive by a big sign on your way to work every day, that says “We’ll buy your used Nintendo games”. Chances are that eventually, when your son gets tired of his 27 games, and decides that a Sony Playstation is cooler now, that sign will come to mind…or else the next time you drive by it, the light will go on. If you hadn’t ever seen that sign, you may have just thrown them out. Let them sit around and become obsolete, or give them away at a garage sale. If you had no idea there was a solution, you probably wouldn’t know to look for one.

Kind of a corny example, but the point is that most people just don’t know that that we exist. And that’s the truth! Think about the reactions you get when you tell most people what you do. “You do what? Buy houses? When did you get rich?” or “what do you mean you don’t have to get ‘pre-quallified’” They don’t have a clue what we could do to help them…they know nothing but conventional.

We know what most people don’t know that they don’t know. (say that 5 times! :))

So my logic is that you should position yourself in the the mind of the community, as a solution to a problem. A problem they might not have today, or think they’ll ever have, but you know that when they need you, they’ll be calling. Or they’ll tell a friend in need. And you will have established a good “image” upfront, by having a business that they can be confident in. They’ve heard of you, seen your office or sign, maybe even recognize your logo. There’s also the argument of adding credibility when you can have them come to your office in town, as opposed to meeting at McDonalds to sign papers. To me, that’s all image and I think in any business, it matters.

In addition to the storefront sign “name awareness” type advertising, I’m also talking about targeting a specific message to a specific segment to focus on generating an immediate response. These campaigns reach the person who needs us TODAY. These would obviously include letters, postcards, and to a certain degree radio spots.

The classified ads will be there for the people who know how to, and are able to, search ME out.

I guess, going back to the original post, I may have given the wrong impression of the kind of “BIIG” I wanted to analyze. I’m not talking half page newspaper ads with a logo and a one liner, or a two story building with a clock on the sign. To me, big, as compared to the rest of my competition, is BIIG. But not the kind of big I may have projected.

The other thing we were discussing was focus vs. diversity.

My reason for wanting to know about several segments, is because they all serve different needs for my financial situation. My objective is to create the “large pay checks” as you spoke of, and put much of that back into my assets, so I can build my passive income. You can’t create passive income, if all you are doing is buying and reselling. You create a JOB for yourself, albeit a good paying job.

I don’t want to have to reject callers with MH deals, like the other investors I spoke of, because I “don’t know how to make money with them”. I can get huge returns, and build nice secure low maintenence positive cash flow with MH’s. Take some cash from the big rehab I just sold, and throw it into MH’s. Or buy some paper. I like L/O’s for the multiple profit centers, additional PCF, and low risk. Plus there are lots of deals that a simple L/O can solve, that no one else can really touch. So really, Ben, there is a reason for my diversity. A good system is the most important. If I was a disorginized one man show, I wouldn’t be able to do nearly as much as with a streamline system. And in that case, I would agree that being a specialist would be more profitable. But for me, my focus IS on one thing: perfecting a system to solve sellers problems. Within that framework I can use various strategies to create solutions and use the different advantages of each segment of REI to reach my own financial goals.

I’m going to stop rambling on, now. It’s past midnite and I’ve been sitting here WAY too long!

I hope this made some sense…

Truly,

NT

Don’t forget to e-mail those book titles, Ben. I am interested…

I have? - Posted by Tyler

Posted by Tyler on April 26, 1999 at 21:35:19:

Actually, I haven’t seen a Hamms commercial in probably 10 years. Maybe if they had done some better image advertising lately, I wouldn’t have associated their beer with a loser looking to sign over his car title for a case…

I just couldn’t see that fellow going to buy a pint of microbrew. :slight_smile:

Being able to name the company who buys the most houses in a year isn’t important. However, being able to name and locate a company that will buy my house if I ever get in a pinch, might be.

Put the TOMA ideals back into context, and I think it makes good sense. And in an extremely non-mature segment like ours, it wouldn’t be that difficult to obtain.

Remember, in our business there IS competition, and anytime you can be the first to get the call, you have a much better chance of winning.

But, of course, that’s just MY opinion.

NT

Mark Brings Up A Point… - Posted by Scott (AK)

Posted by Scott (AK) on April 27, 1999 at 15:09:28:

I had an uncle who owned a Sears Outlet…all 100 square feet of it. His display was a washer, dryer, a frig, and a LOT of catalogs.

Scott