What is Your Standing in the Real Estate Market?

Transcript:

Whenever we talk about “products,” it’s anything that a business sells. So it’s not that we’re selling physical products, though some of the examples are product-based companies, such as Apple, Nike, BMW, and Budweiser.

General Classification of Your "Product"

Products fall into 3 categories that each require a different strategy.

Our product is actually a service, but it’s the same thing. The first step is Product Acceptance - when a company introduces a new or one-of-a-kind product/service that has little or no competition.

I can think of one example of someone doing this in real estate - Redfin, who is trying to break the model - but most of us aren’t trying to create something new and have the product accepted.

Commodity Selection - as more and more competing products enter the market, customers begin to see the product/service as a commodity.

In the eyes of the consumer, I think real estate services are seen as a commodity. Does anyone disagree? So when you’re in a commodity market, there really is only one option - it doesn’t mean that you have to be the best or #1, but you have to think about when these people come into the fold, what do they see? What is the brand?

All of you have heard me say I didn’t spend a lot of time on branding, business cards, and advertising, meaning I didn’t lead with a brand. A lot of agents are doing image advertising right out of the gate.

Brand Preference - as a market matures, you must differentiate yourself - make your product stand out in the minds of your customers - in order to thrive.

Automobiles, for the most part, are a commodity. Brand preference in the auto industry creates huge perceived differences in the minds of their customers - BMW vs Toyota vs Kia.

There are big differences between people that love the style and feel of BMW versus the value of Kia.

Very few products and services cannot be branded - even real estate services that have become commoditized in the eyes of consumers!

Your Relative Standing in the Market

I think this is where a lot of people can get hung up if they’re competing with someone selling 500 homes a year. You’re not at a disadvantage if what you stand for is represented in your marketing materials, your listing presentation, etc. Your general position in the market isn’t the only thing you have to worry about.

You have to consider your competition - there are effective positioning strategies for every level.

You can use 3 General Positioning Strategies to strengthen or shift your relative position:

1. Prestige Identification or Leadership Position - you can use this if you can make a legitimate claim to being #1 in some important respect or product attribute.

So if you legitimately have a claim to being the best at something, you can use this.

2. Preemptive Persuasion or Instant Association - establishing a link in the customer’s mind and the emotional gratification he customer is seeking.

This is more like Kleenex, or Google. So being that well-known that someone instantly associates you with real estate. There are ways to do it by aligning yourselves with someone else, and making sure that the people are going to align with you and there is benefit on both sides. There’s an example of when I aligned with somebody on radio, and it was a total mismatch.

3. Brand Imagery or Emotional Associations - the key here is to create some sensory image that customers will automatically associate with your product.

• Budweiser, the “King of Beers,” has prestige identification.
• Google, preemptive persuasion, instantly you think of search.
• Nike has strong brand imagery, as all their videos and ads are very sensory, and you can almost feel like you’re on the track with that person.