Effective Prospecting in your Estate Agency Marketing

RAT 139 (Rawlings Agency Tip)

STOP PRESS:
July 2020. Leadhub users - get your SDLT prospecting letter template HERE with my compliments

Please note that the following white paper is over 3,000 words long and takes an in depth look at how to get prospecting right in estate agency. So grab a coffee and take your time to find out exactly how to harness the power of prospecting to make your estate agency ever better!

The very mention of the term prospecting sometimes fills estate agents with dread. In some ways this is understandable. Estate agents sadly have a collectively poor reputation (although this has improved over the years) and we don’t want to exacerbate this by being seen to be “pushy”, which goes against the grain, especially as our British sense of reserve suggests that business should come to us, not the other way round.

Yet the most successful estate agents are often those who have a clear policy on generating business proactively, and they do not let such timidity stand in the way of progress.

Many of my estate agency clients have enjoyed record years throughout these leaner times because they refused to allow lower volumes to restrain them. They realised that, if they were to continue to thrive, the only way they could quickly generate more business was to pluck it from the hands of their competitors by directly approaching other agents’ clients.

Ethics:

The issue of “touting” immediately raises ethical concerns in some but is “fair play” to others. However, other than reasons of protecting an informal cartel or losing one of his/her own instructions, I cannot understand why an agent would be against direct prospecting. Any suggestion of using the ethical card in this context would surely be hypocritical. There is perhaps a mild argument that you would not be doing the vendor any favours by encouraging them to switch agents as this might suggest a degree of desperation that could negatively influence buyers. However, what could be regarded as unethical is the long period of sole agency that might prohibit vendors from switching agents in the first place. Self-serving or what? And certainly not in the client’s best interest in most instances.

On the contrary, if an agent has taken on a property, given it fair market exposure, yet failed to sell it, surely the vendor should not only have the right to reconsider, but should also be encouraged to do so by an agent who is clearly so active in the area that they are prepared to invest resources in approaching prospective clients there. After all, the seller’s existing agent has let them down! They have failed to deliver to expectation, most probably as a result of having over-valued the property to secure the instruction initially - another ethical blunder!

Added to this, the communication level the vendor receives from their current agents has probably declined alongside a corresponding reduction in viewing numbers.

I would therefore defend an agent’s right to prospect another agent’s instruction, just as phone, electricity, gas, TV and broadband suppliers encourage consumers to switch suppliers, on the basis that if your current supplier is serving you well, you’ll stick with them in any event. If not, then your supplier deserves to lose your business.

However, where an agent is also a solicitor, as is often the case in Scotland, it is against The Law Society’s code of conduct to approach another solicitor’s client for business. If any such body to which you belong has any similar restriction I would urge you to challenge it as anti-competitive and unethical.

The Property Ombudsman is clear on the matter and reminds agents, in clause 5L and 5M of the Code of Practice for Residential Estate Agents, that in order to comply with the law any “canvassing material must be truthful and must fully explain who the message is from, its purposes and how the seller’s interest can be followed up. If as a result of an unsolicited approach a seller is interested in using your services, you must draw to their attention and explain before they are committed to another contract the potential of paying fees to more than one agent where another agent has been previously instructed to sell their property.” Clearly there is an implicit acknowledgement here that prospecting in this way is an acceptable business practice, subject of course to GDPR compliance.

The only real ethical question to be considered if you are going to prospect another agent’s instruction is, do you genuinely feel that the vendor would have a fair chance of selling through you if they were to switch agents? If not, then don’t approach the vendor!

Proactivity:

I mentioned above that there is a reluctance for British agents to appear “pushy”. Yet a vendor is surely more likely to be predisposed towards an agent who has deliberately approached them than a weaker passive one! Indeed, the vendor is likely to want to engage a proactive agent on the basis that their property will be marketed proactively as well. I don’t mind annoying 10% of the population if it means I’m engaging the remaining 90%. 

Numbers:

Prospecting is, of course, a numbers’ game. Several agents have told me that they tried prospecting but it “didn’t work” - so they stopped! I asked then how many letters they had sent to their prospects and how often. “We sent 50 out once and had no response” is not an uncommon reply! Yet those who send out hundreds or thousands tend to generate great results, so they ramp it up further. These are the agents who regard direct mailing as a strategic route to their success. They allocate marketing budget to it just like any other business that is serious about increasing its market share.

There is of course some maths behind the numbers. Let’s say your prospecting letters generate just 1% response. This means that if you send out 100 letters you might expect one reply. What it also means is that if you send out 99 letters, you might expect 0.99 replies, which is none as you can’t have 0.99 of a response. Send out 201 letters and you are more than likely to receive at least 2 responses. The business value of even this low response would be worth many times the amount spent on the mailings! (PS: let me help you with the wording on your letters and you can expect a much higher response than a pathetic 1%)

Indirect.

In addition to the direct response mentioned above, there are also indirect benefits derived. If your content is good (see below) then this will still influence many people who are simply not ready to switch agents (they like their agent, they are tied into a long sole agency period, they are expecting an offer etc) but who may well switch at a later date. When the time comes, it is easier for them to Google your number than it is for them to find your letter. So whilst it may be tempting to assign a dedicated telephone number to your prospecting letters, don’t be surprised if your responses come in on your regular line and you may not necessarily make the tracking connection.

And don’t expect the vendor to mention they got your letter. I suspect that you gain more business from your prospecting than you might realise! I often hear of agents who go on an appraisal unaware that the instruction had been initiated by their prospecting efforts, only to find their letter sitting on the vendor’s coffee table!

Consistency.

How often should you direct mail a vendor? Too much and you could irritate them - too seldom and you might miss the boat! If you discover that the vendor has just come onto the market within the past few days, it is extremely unlikely that they’d switch. But you could still send them a “good luck with your sale and can we help you find somewhere” card! Who then would be in pole position to pick up the instruction should they struggle to sell down the line?!

One month later, if they’re still on the market, or had a fall-through, they are possibly disappointed that they haven’t sold yet. Initial viewing numbers are declining although their agent remains optimistic. So a second letter at this stage can be useful in compounding awareness of your service. But it is your third approach that really begins to sow the seed of doubt although it may take a further month for the vendor to seriously consider contacting you. By this time viewings have all but dried up and the vendor’s original agent doesn’t contact them much any more, as they are rather embarrassed. Sound familiar?

So a minimum of four approaches (the Direct Marketing Association suggests six) should be enough to not only raise awareness of your brand, but also to prompt people to act. Each letter should have a different tone/wording and build on the previous one, yet carry similar key messages, albeit worded differently. 

Additionally, there are also key trigger points when you should also fire off a letter. A price reduction, a fall-though, or withdrawn from the market (nearly 50% properties removed from a portal last year were withdrawn, not sold, many of which returned to the market with a different estate agent within 3 months). 

Consistency and momentum are critical. That’s why the major agency chains employ entire departments tasked with discovering addresses and activity stats to convert average market share to serious market share. Every instruction gained from a competitor counts as two in the market share battle (eg 36v46 instructions becomes 37v45). (By the way you can now get all the info you need - full address, price drops, withdrawn, fall-throughs etc of properties in your area, inexpensively, by using www.theLeadHub.co.uk whihc also has an integrated mailing facility)

Drill down deeply:

It’s tempting to use direct mail to attract vendors in areas outside your usual area of operation in order to expand your business. However, this is far less effective than prospecting more thoroughly in the area in which you are already well-known.

Direct prospecting delivers the best results when it’s combined with other forms of marketing. The marketing gurus call this “bunching”. So you’ll see better results from your prospecting if you are also advertising elsewhere, have good PR coverage in the local media, have a strong Sold board presence, are active with your social media and are being “talked about” - ideally because you have in some way demonstrated elements of remarkability. If you already enjoy a good reputation locally, your prospecting should be the tipping point for new business! But if you have a poor reputation, or indeed none at all, then don’t expect immediate results.

Content:

Content is the one ingredient that agents so often get wrong. Brand awareness is insufficient if it is not backed up with substance. There’s no point in throwing money at generating volume unless your content is relevant, meaningful, timely and respectful. It should also be engaging and interesting and prompt people to take action. It must be very well written, grammatically perfect and have no typos. It should not be timid, it should address real issues and instil confidence whilst promoting your key messages. Ideally, it should also include a few key stats that make you pull away from your competitors, eg average days on market, percentage of properties you sell over the asking price, number of viewings per sale, etc.

When you come to check your letter, which should cover no more than a single side of A4, ditch any predictable attribute that can be applied to most other agents, eg free valuation, open six days a week, great customer service, portal listings, etc. Boring and meaningless!

It’s all about you:

Most agents DO about the same sort of stuff. It’s therefore who you are that counts. So your letters should be personal and clearly written by an identifiable individual, ideally supported by a high quality image of the writer, looking relaxed but professional, smiling but sincere, attractive and engaging. A good upbeat photo suggests transparency and integrity - two important considerations when assessing an agent.

Likewise, do sign letters personally, ideally in blue as a foil to black copy. If you are sending letters out in bulk using digital services then scan in a high-quality jpeg of your signature for a similar effect.

You should also make it easy for the vendor to respond, so don’t overlook to finish with a strong call to action and a clear phone number - ideally associated with you as an individual (“please call me personally on....”)

This is a direct appeal, not a corporate brochure. And it’s certainly not a brag sheet although a few key stats can be powerful. It’s also worth checking that there are more “you/your” references in the letter than “I, me, us” references. Your writing style should be friendly and conversational in tone.

Graphics:

Your copy is considerably more important than your graphics. However, if your graphics look shoddy then your letter will hit the bin before you can say “overpriced”. Your colour scheme, logos and other livery reflect your “corporate personality” and business style. In this context there should be plenty of white space for your actual copy.

Finding Vendors

Of course, you need to know who’s selling in order to approach them and this involves a bit of detective work. There are companies (such as www.TheLeadHub.co.uk mentioned above) who have some very clever automated processes, plus a few manual ones, that do this for you.

Alternatively it could be a full time, albeit tedious, job for an office junior. I often hear about agents on bicycles trying to match portal images with a particular house; or negotiators painstakingly trying to match Google Earth images with floorplan property footprints, then using Streetview to discover the actual street number only to find that what looks like the number 5 is actually number 8; or agents spending vast amounts of money on out of date or otherwise unreliable data!

This is a task that requires a systematic approach conducted on a daily basis. You won’t get it right every time and - even the experts occasionally (<0.1%) mis-discover an address. But the alternative is to do nothing! The key is volume. And if there is not enough volume of properties remaining unsold in your area, then you’ll need a different marketing strategy that uses a shotgun rather than a rifle approach in order to get first crack at people yet to enter the market. (see Part 2 of this paper, due out in the next issue).

You won’t find everything.

Don’t assume that the number of listings that appear in your area in a portal will be the number of addresses you will discover. It could be half that! This is because several of them will be multiple listed and therefore count more than once, others may be under offer by the time you approach them, others will be repossessions, new build/conversions, probate sales, or some will be undiscoverable to due to a back office data entry error on a portal or website.

Dear Homeowner:

GDPR now makes it very difficult to use a homeowner's name, but a letter addressed to "The  Homeowner" is fine. Most people are familiar with this approach and as long as the content is relevant to them, and it’s from their friendly local estate agents, then this is unlikely to adversely affect response. You do, however, need to ensure that the address complies with Royal Mail’s acceptable address formatting (called a PAF code) if it is to be delivered correctly when part of a bulk mailing facility. 

Can you measure it?

This is a really important question, as it is of course important to be able to assign a return on investment to any activity you might conduct, especially one that so directly involves generating new business. However, a certain amount of business intuition is required here as well, as you won’t always know when your prospecting has “worked”. Was it your letter that did the trick, your boards, your office presence, your reputation, a recommendation or a phone call?

In reality, it’s probably a combination of several of these, yet each in isolation would probably fail to deliver! For example, if you already have a terrible reputation, you don’t have any boards up in the area and you don’t advertise locally, then don’t expect a huge response to your direct marketing prospecting!

Ideally you should keep a record of all properties you have ever prospected and cross reference this with vendor enquires (nb not instructions - that’s down to the agent in the field after the prospecting has done the job of making your phone ring). These enquiries might come in some months after you last prospected them.

We know that, subject to enough volume, prospecting works. It’s just that we don’t always know when it has!

A negative response:

Expect complaints - it goes with the territory! You can probably expect a few negative responses as none of us likes to receive unsolicited mail. All the more reason that your letters are respectful and appropriate and you should not ask for the business without having first earned the right to it. It may be that the recipient is happy with their agent, or they resent you “knowing” their house is on the market, or you may have accidentally approached the wrong address. Whatever the reason, the way in which you handle the call can, in many cases, not only enhance your reputation, but actually lead to indirect business (eg “we’ve decided not to sell but do you do lettings?”). Different demographics also generate different responses. 

Challenge:

It’s easy to take the passive route seeking not to offend anyone. Yet all the research suggests that an element of “challenge” is a good thing. (See my article "It's Not About Relationships"). Politely question the vendor’s existing agents’ results to date, or show them of the importance of selling before the property goes stale on the market. As long as your approach is respectful and appropriate you are unlikely to offend.

Again, if you feel prospecting is a “bit strong” for you then don’t do it; but those who do, tend to gain more business! When there’s less pie to go around, maybe the table manners have to change!

Other agents: I hear you say, “But won’t this upset other agents in my area?

Yes it may....get over it!

Summary - is your prospecting working?

It probably is, even if you can’t see it; but if you’d like to maximize your direct responses check the following top tips:

1. Numbers. The more you send out, the more you get back.

2. Consistency. Hold your course and build momentum.

3. Frequency. Mail the same people every month for at least four months.

4. Target audience. Drill down deeply in your established area.

5. Content

1. • Uncluttered, distinctive graphics

   • Clear, strong and memorable key messages

   • Appropriate, informed, assertive

   • Sincere personable approach

   • Friendly “you to me” tone

   • Upbeat professional-looking high quality photo

   • Blue signature

   • Bold calls to action

   • Direct phone number

6. Reputation. Get this sorted first!

7. The right people/systems. Combine motivated people with professional discovery processes, such as Lead Hub.

8. Actually do it! You can’t test the depth of the water by dipping your toe in it!

Combined with other marketing initiatives such as print advertising or email newsletters, direct mail prospecting is relatively expensive on a “cost per touch” basis But, if it’s managed well, direct mail can provide the lowest cost per response and the highest return on investment. As such, it should be regarded as an integral part of your marketing strategy and it’s worthwhile either employing someone to focus on this, or, probably for a much lower cost, you can outsource this critical element of your business to people who specialize in the field of estate agency prospecting.

About the author:

Richard Rawlings is an award-winning estate agency trainer, consultant and property journalist with over 20 years experience in helping estate and letting agents in the UK and overseas boost their market share by creating distinction and communicating it effectively. www.EstateAgencyInsight.co.uk and www.AgentCentric.co.uk