“I don’t know what I’m going to do,” the real estate investor told me on the phone. “I’m hammering my market with direct mail but they’re just not responding anymore.”
I have conversations like this every week. Real estate investors are feeling like their market is saturated by investors. In the past few years, I’ve seen an increase in this problem. I would say that a majority of my clients raise it as one of the more serious challenges they face.
Competition is rising. With real estate as affordable as it is, and with the proliferation of real estate investing TV shows promising massive fortunes with little work, so many people want to become real estate investors. Markets are becoming saturated with real estate investors.
And an increase in competition has a detrimental impact on your real estate investing business:
- In some markets, prospective sellers are becoming inundated with investors’ direct mail. They’re becoming blind to it because it all looks the same (especially if you’re using the same boilerplate postcards that you got from the same “guru” that your competition sourced their postcards from!)
- Sellers and buyers can’t spot the difference from one investor to the next. The investor who closes the deal with either a seller or a buyer is often the first, last, or most aggressive. Are you missing out?
- Less-than-ethical investors are leaving a swath of bitter feelings from sellers and buyers who feel burnt.
- Increased competition can sometimes turn into a “price war” with other investors when dealing with sellers or with buyers. (For example, a desperate real estate investor might swoop in after you’ve been working with a seller and they might offer a slightly higher price for the property because they’re willing to give up a bit of earnings to get the deal).
- Your bandit signs get lost in the blitz of bandit signs nailed to a lamp post.
WHAT YOU SHOULDN’T DO
The scariest thing I see among real estate investors is the “insanity” approach. That’s where they do the same thing over and over and expect a different result. Frankly, you might as well just throw away your money in the trash can because that is easier. If it doesn’t work for you, you need to stop doing it.
Related to that is: Real estate investors who aren’t willing to take a chance on something different. They see that a hundred other investors in their area are doing postcards so they feel that they have to if they want to be competitive. These investors seem to forget that the most successful people in ANY industry are those who zigged when everyone else was zagging.
Another scary thing I see among real estate investors is a lack of spending. Hey, money is tight sometimes. I get it. But I’m shocked by people who want to be taken seriously as real estate investors but who won’t invest in the things that will get them business. It’s true that the web provides a ton of ways that you can market for free, and you should certainly avail yourself of some of them. But carefully selected paid marketing, when built around a sales funnel, and one that incorporates action-compelling copywriting, can be a worthwhile investment.
And the fourth thing that you shouldn’t do (but I see all too often) is this: Investors who aren’t willing to test their marketing. Numbers matter. When you want to do more deals, you need to expect to market, then test, then market, then test, then market, then test… refining your marketing along the way. It’s the only way to get better at what you do.
And the fifth crazy thing that investors do when they feel that their market is saturated is: They move to another market. Hey, that is sometimes the right move to do but it might not be. It might be possible to actually succeed in the saturated market by taking a different approach.
SO WHAT SHOULD YOU DO?
If your market feels saturated, change the game. Do something different. Break free from the “same as” approach that you and all the other investors are taking.
Here are some ideas for you:
- Build a daring brand. I don’t just mean a brand that amps up the same rhetoric as all the other investors are saying. I mean something totally different. Something that is 1 part celebrity, 1 part crazy, 1 part unforgettable. Frankly, a lot of investors’ brands are pretty similar, which gives you a HUGE opportunity to do something way, way different. Zig, my friends, zig. Be the crazy cat lady, the punk rockstar, the investor that wears a superhero costume. Whatever. Seriously, do something that people will talk about later. Hey, if you and everyone else are offering basically the same “service” then you might as well be the most memorable of the bunch.
- Niche your marketing. One of my clients has done a great job of identifying what is common among all of his most successful deals. We’ve discovered that his sellers all fit within a certain narrowly defined group. So we’ve started sending postcards out that are laser-targeted to that group. It is a much easier and more effective way to market and he’s found a way to stand out in a highly competitive market.
- Do something different with your marketing. Okay, I’m not saying that you should STOP doing direct marketing and blogging (or whatever it is you might be doing) but you should think about how you’re doing those things and maybe rework them. If you’re going to send out direct mail, don’t send the same direct mail as everyone else. Send out a letter from your dog. Or send a postcard that looks like a telegram. Or send lumpy mail. Basically, stop using the same postcard that everyone else is using.
- Shock your sellers and buyers. One thing I’m seeing among investors is that they do the bare minimum when dealing with sellers and buyers. They interact with them just enough to do the deal and then move on. But your competition is doing the same thing. So how can you shock your sellers and buyers? Create what Dan Kennedy calls a “shock and awe” kit. A package of information that is incredibly valuable and special. Maybe include a signed copy of your book, or perhaps some of your favorite books, a couple of reports, maybe some business cards. Maybe something that is associated with your brand. And a personalized letter. Seems like a lot? Sure it does (although it can be done affordably). But it will also position you as THE person to deal with. I promise you: Those sellers or buyers won’t forget you!
- Copywriting. Okay, you knew I was going to mention this, right? 🙂 Revisit all of your marketing collateral — your website, your blog, your brochures, your postcards and direct mail, any positioning content (like a book or report) — and strengthen the copy. Capture attention, focus on benefits, and give readers a reason to contact you right away.
- Invest and test. I think this is going to be my mantra for 2014. Invest and test. Invest and test. Invest and test. By that I mean: Invest in your marketing; be willing to spend a bit of money to create awesome marketing that has the potential to deliver a higher ROI and test that marketing and improve it based on the results of your tests.
Saturated markets are a challenge. No doubt about it. But that doesn’t mean you should pack it in, or move markets, and it DEFINITELY doesn’t mean that you should keep doing the same thing over and over and hope for the best. Nope. What you need to do is be smart about what you’re doing and stand out. Don’t let the saturated market derail you… change the game.