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Dear Friend, 

I’d like to welcome you back for the third season premiere of the Marketing Monday podcast. Can you believe it’s been two years now since the very first podcast and we’ve covered a lot of ground since then.

So I want to really take it up a level for season three and really focus on bankable results. And remember those bankable results are the five things that can actually lead to making money: the getting leads, getting appointments, getting contracts, getting closings and getting referrals. When ultimately you look at your real estate business, those are the five things that you can actually take to the bank. Those are the things that lead to all the money in your business. So if we can improve on all of those, we’ll be making more money, we’ll be doing it in less time and we’ll be having more fun.

So I’ve been really focused on making an inventory of my very best thoughts, ideas, strategies and techniques to generate bankable results. And for this week, I wanted to start with the most profitable idea I’ve ever shared. And I really want you to get this on a deep level because understanding it and implementing it can literally unlock the keys to the vault.

Now at the beginning of a new season I always get reminded of the legendary football coach Vince Lombardi, who would gather his team together at the beginning of training camp. He’d hold up a football in his hand and say, “Gentlemen, this is a football.” Right back to the basics. Well in real estate marketing the very basic element is a target market. And so much of success can be determined by your choice of a target market or your lack of a specific target market, being scattered, being unfocused. The right target market and the right approach to that target market can make your business almost effortless. It can give you an incredible advantage over your competitors and it can built a long term annuity for you, something that will continue to pay you money again and again and again beyond the initial effort that it takes to get things rolling. Plus the way I’m going to show you how to approach target marketing, you’ll be building an asset that you could sell or you could turn over completely to somebody else to run because none of it is going to be built around you, not around your persona anyway.

Now I know that you’ve heard me talk about choosing a single target market before. And I’ve been thinking about why you don’t do it or why you might be hesitant to do it or resistant to doing it. For one thing it sounds like you’re limiting yourself. It’s almost counter-intuitive to think that you could expand your business by narrowing your focus. The most natural tendency is to think about expanding your territory to expand your business, adding more potential people that you could serve instead of less. Another reason you might be hesitant to narrow your focus is because you don’t want to limit yourself. Like if you choose to work with condo buyers that you’ll never be able to sell a horse farm.

And finally the big reason that you’re probably hesitant or resistant to narrowing your focus is because you think you’ll make less money. Now be honest, is that true for you, that you believe? Maybe at some level in the back of your mind that if you narrow your focus you can’t possibly make as much money as if you kept your options open. If it is, let me try and explain exactly what I mean about target marketing and how it can actually make you more money in less time with less effort.

There are a few really good reasons why target marketing or micro-specialisation makes sense.

Number 1: serving a micro-market gives you clarity.

You know exactly what market you serve. It’s crystal clear in all your advertising, all your marketing efforts, all of your thinking is very specific and directed. Anyone you explain it to immediately understands what you’re talking about.

Number 2: it activates the horoscope effect.

We’re very selfish people, all of us. We’re self-centred and we’re most interested in things that are about us, so much so that we’re hyper-aware of things that directly affect us and we’re much less aware or interested or uninterested in things that do not affect us. You know when a single prospective buyer starts the process of looking for a home, they’re only interested in one thing, and that is the specific kind of home they are interested in. If they’re looking for horse farms, that’s all they’re interested in. If they’re looking for a cool loft in the city, that’s all they’re interested in. So they’re going to become hyper-aware of everything to do with horse farms or condos or whatever it is that specifically interests them, and less aware of what doesn’t interest them.

Now this is a very powerful attractor that we can engage to get the attention of our specific target audience. I call this the horoscope effect because the only horoscope that we care about is our own. Now I’m a Taurus and my birthday is this Saturday, May 10, and I’m accepting all presents, nothing over $100 please. So when I look at the horoscopes I immediately go to the Taurus section. Now my wife is a Virgo so sometimes I glance over at the Virgo section. But honestly I couldn’t even name three other horoscope signs because I don’t have even the slightest interest in them. And neither do you or anyone else. The only thing that we’re interested in is stuff that applies directly to us. As soon as I see a horoscope page my eyes scan right away, Taurus, there it is. That’s all I look at. I’m not even paying attention to any of the others because literally I couldn’t tell you three more signs.

That’s why micro-specialisation makes so much sense, and dollars for that matter. The horoscope effect is our natural attraction to stuff that applies to us. We see it, we go, “Hey, that’s me.” It works for horoscopes and it works for home buyers and home owners.

Number 3: it’s much easier to dominate a single target market.

If you spend just a little attention on really getting inside the mind of your target market and give them exactly what they want it’s surprisingly easy to dominate the market. So how do we get started?

Well let’s start with where you are now. How are you defining your primary market right now? Do this exercise with me. Get a map of your primary market or at least just for now imagine your primary market, the geography of it. Are you imagining a broad area, like Northern California or your county or the tri-county area? If this is how you visualise your primary market area, this is how you think about it, let’s zoom in just a little bit and see if we can bring it into focus.

Let’s start by zooming in on your favourite town or city within your county or within your primary market area as you define it. Now you may already be freaking out as we’re narrowing down even that much, but hang in there. Now visualise the distinct market segments that you can identify for this one town. I’ll go through it right now. If I use Winterhaven as an example I could zoom in on townhouses, condos, mobile home parks, new homes, luxury homes, golf course homes, lake front homes. I can point all of these out on a map. If you said, “Where are the golf course homes?” I could point you right to them. Where are the lake front homes? You could see where all the lakes are, the lakes that matter and all the homes around those. What about named communities? We’ve got lots of those. We’ve got Cyprus Wood, we’ve got Garden Grove, we’ve got River Lake. Big apartment complexes like the Carlton Arms and Lake Ned. You know I could zoom in on homes under $200,000 and pinpoint those on the map, kind of starter homes. Retirement homes and adult communities. The point is, to exercise your ability to see the layers of stratification in your market and how you can segment them. Those are like the horoscope signs for your prospective buyers. That’s all they care about is one of those strata.

Same thing with people who are selling their homes. The only thing they care about are homes like theirs, what are those homes worth. If they’ve got a lake front home, they don’t care about what the condos are selling for. They could care less about the condo market.

Now when you think about choosing one of these you might freak out because you think that you’ll go broke but you know let’s take a look. Let’s say that there are fifteen hundred town homes in your market and a hundred of them turn over each year. So let’s run some numbers on that to see what’s available. A hundred townhouses turning over each year means a hundred listing’s side commissions. And let’s say that each listing side commission is worth $6000. So there’s going to be one hundred listing side commissions paid out of just the townhouses. So that’s $600,000 that’s available right there. Another one hundred buyer’s side commissions of $6000 means another $600,000. So we’re up to $1.2 million in commissions that are going to be paid out of just the activity in the town homes so far.

Now NAR says that most of those people will buy a bigger house within eighteen miles of the one that they sold. So let’s just say half of them, fifty of them, will buy a house that pays an $8000 commission. That’s another $400,000. So now we’re up to $1.6 million available just from a small group of town homes.

How much of that market could you get if it was your single minded focus to dominate that market? Could you get 10%? Could you get 20%? That sounds reasonable doesn’t it? If it was your single minded focus, if that’s all you were thinking about was getting the biggest possible share of the townhouse market. Because you’re willing to do things that other people aren’t willing to do. Do the math and you can see how easy it is to make megabucks from micro-specialisation.

Now the thing I’d like you to really think about this week is what segment of the market could you choose as a micro-speciality. I’m not saying you have to give up everything you’re doing. I’m just asking you to think about it and go through the exercise of identifying at least ten segments of your market area that you could specialise in if you really wanted to do that now.

When you identify those ten areas, which one really sort of jumps out at you? Which one has the most appeal to you? When you pick one, do some quick research in your MLS to see what the total yield just on the listing and buying side would be. To do the total yield calculation just figure out how many homes in that segment sold in the last twelve months and what the median price was, that’s the middle price. So if a hundred homes were sold, what was the price of the fiftieth ranked home, if you were ranking them from the least expensive to the most expensive.

Now calculate out what your commission would be on that home and multiply it by the number of homes sold. That will give you a total yield. Do the math for a few different target markets and imagine what it would feel like to have a 10 or a 20% market share of that segment of the market, to completely dominate that strata. That’s what I want to focus on for these first few Marketing Mondays. It’s so much easier to get rich by completely dominating a market than it is to try and cobble it all together by getting a little bit of business in a bunch of markets.

What I’m going to show you is how to corner the market on any micro-specialty by getting all the listings and finding all the buyers. I’ve seen it happen again and again and if you’re up for it I know it can happen for you too. So do your homework this week and then pop in to the message board to let me know that you’ve selected your target market. And come back next week to find out how to corner the market on listings.

That’s it for this week. Thanks for joining me and I’ll be back next week with even more ideas for getting listings, finding buyers and converting leads.