That’s a dark title to a blog, but if you look at the facts, it’s a true statement for agents and brokers.

Think about this…

The Failure Rate for Agents is at an all-time high.

• 50% fail in their first year.
• 87% fail within 3 years.
• 95% fail within 5 years.

There’s also more agents than ever, BUT the total number of transactions has stayed the same, and therefore, the average number of transactions per agent is lower than ever.

The #1 reason why agents fail is that they don’t know how to generate their own business, in a systematic, predictable, consistent, and profitable way.

Advertising doesn’t work

• The average ROI for agents who buy leads is -22%. That means the majority of agents lose money when they try to buy their way to success.
• The average conversion rate on print marketing is down.
• The organic reach on facebook posts has plummeted.
• The difficulty for one to get their blog or video to rank on the first page of google or youtube has increased.

Old School Prospecting doesn’t work

• Do not call lists have gone up.
• People are living busier lives and are at homeless, decreasing the efficiency of door knocking.
• The amount of people who want to attend open houses has gone down.

The cost of Marketing & Advertising is also increasing faster than the cost of homes, and therefore an agent’s commission, which therefore leads to a reduction in ROI and profitability over time. For example, the cost of Facebook ads goes up 10%-20% per year, and the cost of homes goes up 3% per year, resulting in a net ROI reduction of 7% per year. 

Combined with the fact that consumers are asking listing agents to reduce their commissions, and there are a host of new brokerage business models with discounted service prices, the ROI on marketing and advertising is going down, and if it’s not already unprofitable for an agent, most channels are becoming unprofitable.

To make matters worse, big tech companies are trying to eat the realtors lunch. iBuyers like Opendoor and Zillow Instant Offers want to replace the agent. Tech Enabled Brokerages want to reduce the commission that agents make on each transaction. Amazon wants to get a percentage of the agent’s commission. And because of the internet (the knowledge bank) the percentage of sellers who try to sell their home on their own has increased to 35%.

And the MOST important fact all real estate agent must know is that homeownership has gone DOWN across ALL age demographics.

Now this sounds like doom and gloom, and for those agents who don’t accept these realities and make changes, it will be doom and gloom.

Bottom line: The cold hard truth is this…

• If realtors don’t change the way they do business, they will die off like Blockbuster
• If realtors try to buy their way to success, they will die off like MySpace. 
• If realtors are constantly asking for business, they will die off like Barnes & Noble.

However…

Challenge creates opportunity, and all these problems are really gifts… calling agents and brokers to grow.

Here are some facts that should get you excited…

• 60% of buyers and sellers STILL find their agents through relationships and referrals. Even millennials who are tech-savvy.
• 85% of buyers & sellers only interview 1 agent.
• The law of reciprocity is still the #1 method of influence.
• Business owners and local professionals are networking more than ever.
• The thirst for knowledge on how to make money in real estate (e.g. Short Term Rentals) is at an all-time high.
• The consumption of content on the internet and on social media is at an all-time high.

Therefore, whether you work with Parkbench or not, the principles for success are:

• Relationships > Marketing
• Personal Branding > Brokerage Branding
• Service > Sales

Allow me to explain…

Do you know how Facebook, a no name startup with no funding in a dorm room, over took MySpace, a venture backed goliath who dominated social networking?

Strategic Relationships in a small geographic area, expanding one small geographic area at a time – They found influencers on Harvard’s Campus, and dominated that campus, before expanding to Stanford, then Columbia, then Yale, and beyond. And every single time, they built relationships with the influencers in that geographic area, to promote their brand and build their business.

They didn’t try to fight fire with fire. They fought fire with water.

So if you’re a realtor, who trying to compete against a top producer or team that spends a lot of money on advertising, and bigger picture, you’re all trying to compete against the ad dollars of Zillow, Amazon, and Big Tech, the solution is NOT marketing and advertising, and it NEVER will be, and any efforts to TRY and win, using marketing and advertising will FAIL.

…and that’s a good thing!

The winning strategy to beating “the top producer” and “the big spender” is to build strategic relationships with influencers in a small geographic area (like a neighborhood). The key is to add value to influencers, so they want to promote your brand and refer you business.

And the best part of this strategy, is that all it takes is hard work and a proven relationship building system.

Ok, so in 2020 and beyond, focus on relationships over marketing…got it? Good 🙂

Next, let’s talk personal branding as a MUST-IMPLEMENT strategy for 2020, and here’s why…

Do you know who the top real estate team was in North America? Ryan Serhant’s from Million Dollar Listing, which is crazy because he only started real estate 10 years ago, and now he has the top team in North America?! Coincidentally, he has the biggest personal brand in real estate today… interesting isn’t it?

Well there’s science to this. 92% of consumers trust an influencer more than an advertisement or traditional corporate brand.

This is the social media effect.

Before the internet, consumers looked at the TV, Billboards, Bus Benches, and direct mailers to learn “who was a brand they can trust,” and REMAX madea fortune off this reality…back in the 90s.

In 2020, people trust people because they can finally get access to people’s thoughts through social media! The reality is that people ALWAYS trusted people, but without the internet, it was hard to connecte with people. Now through social media, it’s easier than ever, and the majority of buyers and sellers don’t give a shit what brokerage you’re with.

They care about your local market knowledge, your relationships with them, and their confidence that you can serve them well.

So the majority of your time and money should be spent on your personal brand, and on demonstrating to people that you are THE local market expert, you have a great reputation locally, you are trustworthy, responsive, professional, and authentic.

Got it? Good 🙂

This leads to the next opportunity…Customer Service.

The average conversion rate on leads is 1%.
The average conversion rate on print is 0.25%.
42% of consumers now use ad-blocking technology.
Smartphones now make it easy to block calls from numbers they don’t recognize.
The average number of ad impressions required to influence a consumer is now 22.

People have always hated being sold to…and now it’s easier for people to prevent themselves from “being sold to”…

BUT…

People LOVE to buy and they will overpay for great customer service, and you know who figured this out? Starbucks and Amazon.

It is more expensive to shop on Amazon and at Starbucks, but people pay the premium for the customer experience.

While homeowners are asking for commission reductions from realtors, it’s only because they THINK the customer experience is bad, and because they do not feel obligated to pay realtors their full commission.

However, that doesn’t mean they will not pay full commission rates.

The only thing homeowners are telling realtors is that their standard for customer service has gone up, and if the realtor has not given value to the homeowner before they do business, then they will be firm on asking for a fee reduction.

So all you need to do is

• Give value to people before you work with them
• Create an amazing customer experience

Got it? Good 🙂

Now are you racking your brain for solutions to help you

• Give back to your community
• Give value to homeowners before they need you
• Relationships & Referral Based Marketing Streategies
• Items of Value to buy and give people
• Ways to network with the people who live and work in your geographic farm area
• How to create engaging content
• How to build your personal brand
• How to prospect without being salesy and cheesy

…because that was me too

…and that’s why Parkbench was created – to check all those boxes for me, and it can for you too!

Parkbench can help you overcome all the obstacles in the industry today, but you must take action…right now.

Start more conversations…right now
Give more value…right now.
Build more relationships…right now.
Build your personal brand…right now.

The best time to do all of this stuff was yesterday.The next best time to do all this stuff is TODAY.

Don’t be like MySpace, and Blockbuster, and Barnes and Noble.

Learn from Facebook, Netflix, and Amazon.

Change the way you do business…right now!

And don’t just listen to us, watch and listen to your peers and leaders in real estate.

#doitnow