- Run every decision that requires an investment of your time and/or money through four simple filters: personality, skills, strategy, goals.
- If you’ve never done a personality assessment, do one -- maybe even two or three.
- Distill down the core skill that is required to use a new product or service, and ask yourself, “Am I good at that? Do I enjoy doing that?”
- If you try to increase both revenue and profit, you will do neither well. You must pick one.
“You need to spend money to make money.”
If you want to increase revenue and profit, then you must accept this phrase — and hopefully you already do.
However, knowing which products and services are worthy of your time and money is challenging, especially when you’re hearing 50 different messages about what to do and what to buy.
Inman Connect New York is coming up, with more opportunity to separate the shiny from the useful. Since I’ve been on both the consumer and vendor side, here are my thoughts on how to assess whether a new tool or marketing system is right for your business.
We begin with part one: The principles of how to make smart investments for your business. Check back for part two, where I’ll apply these principles to ICNY’s Startup Alley companies.
The 4 principles behind all smart investments in a business
Run every decision that requires an investment of your time and/or money through four simple filters: personality, skills, strategy, goals.
- Does this investment align with my personality? Will I enjoy the process of using this product?
- Do I have the skills to use this product/service, or is it easy to learn?
- Does this new product/service align with my marketing strategy and values?
- Will this new product/service move me towards my major business goal?
For the majority of real estate agents, before you can assess investments, you need to gain a better understanding of yourself and your business.
Do you know your personality type? If you’ve never done a personality assessment, do one — maybe even two or three.
Self-awareness is a trait of champions; in his social media posts, Gary Vaynerchuk emphasizes the correlation between self-awareness and success.
The Myers-Briggs system tells you which of the 16 possible personality types you are (I’m an ENTJ). Then, there’s the colors test where you are labeled as red, green, blue or yellow. Tony Robbins also has his famous DISC profile assessment, and there are several others.
The goal is to figure out, “Will I enjoy using this product/service?” Because here’s the deal: Lots of things work if you commit to them consistently and properly.
For example, if you are thinking about any lead generation service, you should enjoy:
- Dropping anything and everything you’re doing to call leads right away.
- Using technology to manage leads.
- Creating email and print marketing campaigns to effectively follow up.
Note: You could pay someone else, who enjoys this work more than you, to do this task; however, you’re still going to have to manage that person effectively, and if you don’t like thinking about it, there are better uses of your time and money.
Now, on the flip side:
- If you’re not tech-savvy, then buying a complex CRM system might be a big waste of your time and money.
- If talking to lots of people drains you, then don’t feel pressured to do open houses. Rather, go deeper into virtual reality and digital marketing.
All tasks for getting and serving clients boil down to these essential skills:
- Research and analysis
What skills come naturally to you? What skills are you faster than others at? What tasks have you done that have caused you to forget to eat?
If you’re good at research, analysis and playing with Microsoft Excel, start creating content for prospects and clients that demonstrate your intelligence and buy products and services that help you do this.
If you’re good at writing, then start blogging and interviewing people, and invest in a good website, search engine optimization and advertising for your content.
If you’re good at talking, then door-knock, cold call, host open houses, go to networking events, join Business Network International, put on community events, buy leads and buy items of value that help you get in front of new people to talk to.
If you’re good at photography and videography, then invest in tools and systems that help you use social media more often and more effectively, and most importantly, start creating more content!
Now, when looking at new products and services, it’s natural to first think, “I’ve never done this before, or used anything like this before, so I don’t know if it will work for me.”
Therefore, distill down the core skill that is required to use this new product/service, and ask yourself, “Am I good at that? Do I enjoy doing that?” If yes, try something new. If no, pass.
If the majority of your business comes from direct relationships, repeat business, referrals and open houses, then investing in print marketing and online lead generation is not in alignment with the foundation of your marketing strategy.
If you want the majority of your business to come from referrals, then investing in print marketing and online lead generation is not in alignment with your marketing goals.
However, if you don’t care where business comes from and you want to boost revenue, then investing in online lead generation tools and systems may not be a bad idea.
If you want to build your brand and business in a neighborhood or ZIP code, it can be difficult to buy enough leads to boost revenue; therefore, investing in print, bus benches, open houses and a website for the neighborhood may be smarter.
However, if you want to focus your business on a specific type of house (for example, condos); a specific ethnic group (yours?); or a type of clientele (for example, relocation) then investing in content marketing, SEO and social media can be a scalable marketing strategy.
What if being green and giving back to your community is a part of your mission and values? Then you should go heavy into digital marketing and invest in products, services and events that benefit the people in your area.
What if you want to be known for caring about your friends, family and clients and providing amazing communication and support?
Then you should invest lots of time and money into your CRM and content marketing (via email, blog and print media) because if you have lots of data about the people in your database, and you have systems to send them relevant information frequently, then you’re achieving your vision.
Bottom line:There are dozens of marketing strategies that work. The one that will work for you in the long-term will be in alignment with:
- How you’ve been building your business.
- How you want to build your business.
- The kind of brand you want to develop for yourself.
Just because another Realtor is getting results (or not) from a specific marketing strategy or tool doesn’t mean that you will.
What is your goal right now: increase revenue or increase profit?
“I want to increase both.”
If you want both, like most business-hungry people do, then this lesson will literally change your business forever, for the better.
If you try to increase both revenue and profit, you will do neither well. You must pick one. That is a strategic business decision of all great companies.
Why? The investments of time and money to increase revenue are fundamentally different than those that increase profit.
Tips on how to decide:
- If you are a new agent, focus on revenue. Period.
- If you are not thinking, “I cannot take on any more clients,” focus on revenue.
- If you are thinking, “I’m happy with my income and lifestyle right now,” focus on profit.
- If you’re thinking, “I’m nearly at capacity and I want a team,” focus on revenue and recruiting.
- If you’re thinking, “I sell lots of homes, but I’m losing money or barely getting by,” focus on profit, automation and efficiencies.
Once you decide between revenue and profit, look at tools and systems that will help you achieve that goal.
If you want to focus on revenue:
- Get into Facebook Ads now.
- Pick a neighborhood or ZIP code with a fast turnover rate (sub 10 years), and get to know every person inside of it.
- Flyer your database and sphere of influence.
- Buy leads from other sources.
- Invest in a personal assistant/transaction coordinator.
Bottom line: When focusing on revenue, invest in tools and systems that allow you to talk to more prospects and clients. Your systems do not need to be pretty and precise.
Think of Mark Zuckerberg’s motto: “Move fast and break things.” Hack your way through growth.
If you want to focus on profit:
- Invest in a complete CRM.
- Invest in the automation of lead to CRM to email, call and text.
- Invest in self-development.
- Cut all marketing and advertising efforts that do not yield at least a threefold return on investment (ROI) after you pay your brokerage and fees.
- Invest in learning new technologies.
- Pick the neighborhoods and ZIPs you want to build your brand and business in, long term, and get to know every person inside of it.
Bottom line:When focusing on profit, the goal is to make your systems and processes more efficient. This will require an investment of your time and money. You’re also going to cut costs that do not make you more efficient or bring in a significant ROI.
Important: Do not worry if your revenue goes down. As long as your profit margin increases.
Now you might be wondering, “What is my profit margin?”
Profit can be measured both as a percentage of sales — and, more importantly, as an absolute dollar figure.
For example, say in year one, my revenue is $100,000 and my profit is $10,000; that is a 10 percent profit margin.
If I choose to focus on profit in year two, I may only make $90,000, but my profit might be $20,000, which is a 22 percent profit margin. Therefore, if profit is the goal, I have succeeded.
Once you have significant revenue, when you focus on profit, your business should be in a better position when you focus on revenue again.
In the previous example, if I decide to focus on revenue in year three, I may hit $100,000 again with a profit margin of 16 percent; therefore, I will have profited $16,000, which is a significant improvement from year one.
Grant Findlay-Shirras is the CEO of Parkbench.com and the Local Leader Real Estate Marketing System. Follow Grant on Instagram and Twitter @GrantFSofficial.