FEATURE:Innovators series: Marketing

THIRD IN A SERIES: If you expect to build your business for long-term prosperity, you occasionally have to step outside the here-and-now. REALTOR® Magazine’s 2007 Innovators Series lets you sit in on freewheeling discussions with thought leaders in brokerage, technology, marketing, and customer service. Find out firsthand where some of the sharpest minds in the field think the industry is going.

The Consumer Connection

EDITED BY ROBERT FREEDMAN

The Internet creates so many marketing options today that it might be understandable for brokers and associates to throw up their hands and stick with the tried and true: newspapers, cable TV, local home magazines, and — when it comes to the Internet — the company Web site and maybe REALTOR.com. It would be understandable but not a good business strategy, according to a roundtable of experts REALTOR® Magazine hosted to explore marketing strategies.

The tried and true platforms won’t reach many of today’s younger consumers, who get their news from blogs, connect with their friends through online social environments like Facebook, and expect to find the information they want, when they want it, at the click of a mouse button.

The challenge for you is to implement your new-media marketing strategy on top of, rather than at the expense of, your traditional efforts. Otherwise you stand to come up short. Our panel of marketing experts explores how to do that.

The New Media Core

REALTOR® Magazine: When we talk about the new media consumers are using, what are we talking about?

John Bell: Social networks. MySpace is the most popular by many standards, but you also have Gather.com for NPR listeners and Eons.com for people over 50. You have social networks for all sorts of affinities. These are the places in which people choose to maintain a piece of virtual space, a profile page, a blog, or some other platform to interact with others because of a shared interest.

New Media Shorten Ramp-up

RM: What’s driving the rush to tap these networking opportunities?

Michael Golden: Opportunities for quick success. With all of these different avenues, you’re seeing sales associates building much larger books of businesses and becoming much more successful much faster than they have in the past. At least in our marketplace, you can see that there are a lot more young successful people than before, because it doesn’t take 20 years to build a referral base of business anymore.

James Burroughs: That’s true, although practitioners who rush to do these things and neglect more traditional vehicles do so at their peril. Buying a home is a high-involvement purchase, so I’d never underestimate the value of being involved on nonprofit boards or chambers of commerce.

Golden: No, I don’t think there’s a shift away from them. I’m saying that people are able to use these new vehicles to build their image much more quickly than before. It’s definitely a layering. You still have to get to know people and develop relationships. You’re not going to do that entirely or even in large part via the Internet.

Marketing Credibility Requires Authenticity

RM: How do you engage your audience in these social media contexts? Since they’re in effect communities, don’t you risk alienating yourself if you come across as just trying to sell real estate services?

Bell: There are many ways to engage a community like the one at Gather.com. One is to buy advertising, and it’s not as expensive as you might think. Another is to be a member of that community, although if you participate, you have to be transparent, or you’ll alienate people. What’s key is that you can network through these communities. A lot of people I know network now through LinkedIn, which is a very simple social network but one that’s become a social media phenomenon. People use it to find other people of like interests.

Charlie Young: Coldwell Banker has an experiment going on in Second Life [the 3-D virtual reality platform]. One of the keys is to be a participant and engage in the network on its terms rather than be overtly commercial. We’ve found that to be very positive for us. Obviously, there were concerns about how members would respond to our presence, but as we did it in a way that was very much participatory, it seems to have mitigated some of the risks.

Other Means of Engagement

RM: Beyond advertising and networking, what works with social-media–savvy consumers?
Young: You can’t discount the role of infotainment. Consumers are hunting and searching for information online, and often their search starts in a very entertaining way. One of the great things that Zillow tapped into was the ability to deliver, in an entertaining way, information that consumers were interested in. Social networks play into infotainment. Online video plays into this whole thing as well.

Golden: That’s an important point. There’s a larger expectation from consumers that they want to make up their own minds about things, given the right information. That’s the reason people get so much information via the Internet. When they collect health information online, they don’t go to one source; they go to 12.

Bell: Another factor in engaging consumers is the game-changing nature of search engines. Eighty percent of us, every day, start an information-gathering session through a search engine: Google, Yahoo!, MSN, AOL, or Ask.com. We no longer go to Web sites; we go to Google results. And one of the best ways to get into Google results, beyond traditional search engine optimization programs or paid search marketing, is by leveraging social media. Blogs are the best example. They perform well in search engine results because they’re cross-linked with other blogs and Web sites.

Burroughs: Although, let’s not forget the things you do that this new technology can’t do: understand the quality of a neighborhood, for example. That can’t be gleaned just by going on the Internet. You need somebody with the expertise to help you understand what it all means. So I see these new media as a starting point.

Knowing Your Audience

RM: How do you get to the point where you know your audience well enough to move forward on a strategy?

Bell: Tons of research. We at Ogilvy create, in the course of an engagement with a client, a thing called a digital user profile of whomever the client is trying to reach, whether it’s women 35 to 50 or African-American men with a propensity for heart disease. For every group we’re working to reach, we create a profile of what they use from a device standpoint, from computers to digital video recorders to mobile devices like phones and so forth. For us, it’s a combination of syndicated research we’ve purchased, one-off research for which we’ve contracted, and research we’ve accessed through Google: stuff that’s out there now and available to anyone who’s diligent enough to search for it.

Offline Authenticity Needed, Too

Burroughs: Younger consumers who’ve grown up in an age of multimedia are media-savvy, but they’re also skeptical of the media and business in general. So when you’re talking about connecting, it’s important to focus on a few areas in which you can genuinely represent yourself as a firm and leverage those things. Instead of sponsoring 20 different events in the community to get your name out there, you’re much better off picking something really important to the individuals in your brokerage. If you have a breast cancer survivor in the office, become active in Susan Komen walks. Consumers genuinely connect with you when you do that.

Kim Cipriano Prior: I agree. If you’re throwing checks and sponsorships but there’s no real heart in what you’re doing, it’s very transparent. When we work with the community, we try to do it without writing a check first. Quality of life for underprivileged children has been our cause for a long time, and every event we work on is based on that. One of the most fascinating things I’ve discovered while researching younger consumers — Gen X and Gen Y — is that they’re extremely socially conscious; it’s very important for them to buy from companies that participate in the community.

Burroughs: That’s a critical point. There’s something called a “contrast effect,” which is essentially when you do something because you think x will happen, it ends up that -x happens. So you can actually do yourself more harm than good if you put money into something in a disingenuous way, or at least if that’s the way the consumer sees it. Not only have you not accomplished your aim, but you get the opposite effect: that people will actually take time not to do business with you because they don’t trust you.

Word-of-Mouth Marketing

RM: One benefit of being active in your local community is the positive feedback that spreads from consumer to consumer, a kind of word-of-mouth marketing. We’re hearing a lot about word-of-mouth marketing today, yet that’s something practitioners have always done. What’s behind this new focus?

Young: What’s interesting today is that, through some of the social media tools that are being built on the Internet, we have a whole new suite of services that allow our industry to tap into word of mouth on a whole new level.

Bell: I agree. What’s changed now is that there are new ways — mostly digital — to amplify word-of-mouth efforts. Ways to measure these efforts are emerging, too.

Controlling Word-of-Mouth Messages

RM: The challenge of word-of-mouth marketing, particularly in the digital environment, is maintaining control of your message. How can you keep control when, in effect, you’re allowing anyone to pass along your message for you?

Young: You have to go into word-of-mouth efforts with the understanding that you can’t control everything. One of the things that we urge our Coldwell Banker-affiliated companies and sales associates to do is participate in the process of word of mouth as opposed to avoiding it. If you participate, you can bring value to that dialogue. Then your chances of it going well are enhanced.

Burroughs: The fact that word of mouth is extremely difficult to control is what gives it higher credibility than paid-for advertising, which is why so many people are interested in it. And the risk really isn’t that high. Average consumers are interested in getting information they can use, and they’re not interested necessarily in harming or hurting Coldwell Banker or RE/MAX. If a negative message about a company is originated and spread by others, there’s something resonating with people for them to take the time to send it on. People aren’t generally malicious. One way to control your message is to make sure you have an upstanding product to begin with.

Role of the Brand

RM: New social media marketing platforms and the growth of word-of-mouth strategies online are boons to sales associates who know how to leverage them, but what about the company? Does this trend make company marketing less important, and how does the company protect its brand image?
Young: The role of the brand today is as relevant as ever, if not more relevant. In today’s world, where the consumer can literally bounce from market to market, associate to associate, and company to company with the click of a mouse, the ability to represent a consistent level of service is critical. When consumers go to the online space, they’re a little bit wary of what they’re going to find, so we believe that the brand can deliver a level of confidence to consumers that they really need in this world.

Burroughs: Brokerages are service businesses. That creates some unique branding challenges for any firm because it’s intangible. People use brands and brand symbols to make sense of abstract concepts. And so in a service context, the brand becomes crucial. What you really want to do is develop a brand with which consumers have a very definitive association, something that you do very well and that delivers value to them. With the Internet, where you’re even more intangible, these notions of branding are becoming even more important.

Young: For years, sales associates have been taught — and it’s in their DNA — that personal promotion is the way to have ultimate success. But I wonder, in the new world of the Internet, whether that needs to be modified because of the role the brand plays in building consumer confidence. The ability to drive a referral is no longer just in that couple-square-mile region I’m servicing in my community; instead, I can get a referral from anywhere through my ability to network socially on the Internet. And so, one thing we’re looking at is the role of the brand as it relates to the personal promotion aspect of what sales associates do every day.

Associate Branding vs. Brokerage Branding

RM: How does the company protect its brand image when its associates cross a line and get too edgy as they try to make a name using these social media platforms?

Young: There are certain standards that we at Coldwell Banker require, but with sales associates operating as independent contractors, there is a challenge. One thing we do is provide the tools to make it easy for our sales associates and affiliated companies to pick up our brand standards and deliver one voice. Those tools would be anything from a blogging platform to a Web site to advertising.

Bell: Giving associates clear guidance as to what’s acceptable, in terms of behavior, visual branding, and attribution to the company, is pretty simple and pretty critical. They can have a distinct point of view without being so edgy that they put your brand equity at risk. Having a distinct point of view may not appeal to everyone, but the more each of us can state confidently what we stand for, the greater the net benefit to our business. We’re going to attract better customers, the customers that we want to serve. We’re going to be ourselves at the same time. And you’re going to cut through the clutter, because now consumers are going to know that Mary Gray stands for x.

Burroughs: You get into dangerous territory when you start to talk about edginess in real estate, because the things you have to sell are your integrity, reputation, and professionalism. Why would someone do something outrageous or risqué? Outside of real estate, it’s done for low-involvement products where consumers have little incentive to pay attention to the information. When you see a beer ad using scantily clad models, people don’t think a whole lot about that. But it does get attention, and later on, hopefully it’s favorable. Real estate isn’t characterized by that at all. You’re involved in the most important purchase most people make in their lives. You do a lot of harm if you cross a line to get attention.

Positive Differentiation

Golden: The positive way for sales associates to get attention is by focusing on a submarket. Instead of trying to choose a hundred ways to market yourself, choose four or five. Do them consistently, and do them well. That gives you the distinctive point of view that you can own.

Cipriano Prior: If you’re focused on a certain business segment, do an opportunity-to-cost analysis and answer the question, “How do those people find me?” and then focus on that.

Burroughs: There was a sales associate whose ad on the radio said she was your local expert on residential, commercial, agricultural, downtown, urban, rural, starter homes — everything. Of course, it was a disaster from a marketing perspective, because you had no idea what she offered relative to any other real estate professional. Contrast that with one practitioner here in Charlottesville who hooked up with several departments at the University of Virginia. Every time we bring in a new faculty member, she gets the business. The university is bringing in hundreds of people a year, and now she has an expertise that keeps paying dividends for her every single month.

Role of the Brokerage

RM: If your sales associates aren’t biting at the social media platform or if they’re not biting at it in the best way, what can the brokerage do to change that?

Cipriano Prior: It’s certainly imperative that we at the brokerage level do everything we can to open up these new vehicles to our associates and educate them on how to use them to their best advantage. For now, we’re doing a lot of online marketing, but we’re not doing any personal media marketing. But the second phase of what we’re doing will include blogging and a presence on community Web sites and Web boards. But before we do that as a brokerage, we’re focusing on associate education.

Golden: We tell our associates and brokers, “Run toward the light. Understand how it works and figure out how you can bring value to that new dialogue that’s taking place between consumers and the raw data they access on the Internet.” The ubiquity of information and the emergence of social media are out there. You can’t stop that. The trend is clear.

Continue the Conversation

Ask questions of roundtable participants and share your views. Our marketing roundtable participants will answer your questions Aug. 28 through Sept. 12.