Why estate agency stock is so low, and what you can do to improve your stock levels today.
“Our stock levels are at rock bottom – we literally have nothing left to sell.”
An agent from Northampton said this to me, only yesterday. He’s a great agent, with a strong brand, but over the last few years, the online agents and back-bedroom guys have really knocked his market share. And now, let’s face it, there just isn’t enough stock to go around anyway.
So what can you do when you have nothing left to sell?
Firstly, look at the overall stock levels in your area. Check on Rightmove to see how many properties are actually on the market in your area. A quick check on Northampton reveals there are 856 properties live and available, including new build. Between the 73 sales agents that are listed on Rightmove, that’s only 12 properties per agent. Let’s say this number turns over around four times a year (just a general calculation to keep things simple) and you have 48 properties per agent. At an average of 90% retention and £2000 average commission, you’re only looking at £86,400 sales revenue a year.
Not exactly enough to pay the running costs on a high street office and even a modest team….
In this position, where the stock volume is the problem, you have three choices:
- Gain market share
- Increase your commission (can have a negative effect on number 1)
- Batten down the hatches and wait it out
When inbound enquiries are low or non-existent, there’s a tendency to increase output, hoping that it will increase volume. So I talk to agents every day who have ramped up their canvassing efforts, increased their ad spend, started touting more aggressively, and a few who have even launched radio ad campaigns. None of which so far has resulted in an increase in volume.
Now look at your points of differentiation
How can you finish this statement?
“We are the only agent in our town who__________” ?
It could be a service difference; maybe you’re the only agent who opens on Sundays, or the only agent who allocates a dedicated account manager to every vendor. Or you could include features in your offering that no other agents do, like property styling consultations, garden tidies, professional photography or even a Feng Shui session. You could differentiate yourself on price, by charging a fixed fee or a sliding scale fee structure, when every other agent is charging a standard percentage commission. Perhaps you are the most expensive agent in your town, and proud of it, making it an integral part of your marketing and brand messaging. Maybe you are the only agent who focuses on a particular type of property, like The Apartment Company, in Bath, or Waterside Properties in Surrey.
Once you have at least three strong points of difference, it’s time to review…
Your ideal client.
I’ve talked about the importance of identifying your ideal client in previous blogposts – so I’ll keep this part brief. Let’s say for simplicity there are five types of sellers:
- First time sellers
- Investment vendors
The most profitable of these five is usually number 2 – the upsizers. These are often mid-range sellers, moving from perhaps a three bed semi to a four bed detached. In their late thirties or early forties, with a couple of kids at primary school. Both parents work, have two cars, two holidays a year and shop at Tesco and Waitrose. Do you know them? I do! Lots of my friends are just like these guys. I call them the Tom and Claires. The great thing about the Tom and Claires of this world, is that they generally have a nicely presented home, they choose an agent on service values and not on fee, and they don’t want to hang about, so they are more ready to accept your valuation. Right?
Now we know who we are trying to attract, let’s look at…
Here’s where things get interesting.
Let’s go back to the list of marketing that most agents are doing in order to increase their volumes:
- Newspaper ads
- Radio ads
Which of these media would appeal to our Tom and Claire?
None. Nada. Njet.
That’s the stark truth. I know, because although I’m a little older than Tom and Claire (I’m now a grandma to baby Noah!!) I was one not too long ago, and many of my friends still fall into that category. Not one marketing method of the list above would have caught my attention for long enough for me to consider calling the agent, let alone booking a market appraisal.
So what marketing media can you use to attract a Tom and Claire?
These guys are tech savvy, social savvy and like to consume information. So you can grab their attention and hold their interest with media like:
- Social media
- Facebook ads
- Email tips
- Visually attractive information
- Interesting resources, like ebooks and checklists
I know that most of you are reading this thinking, “I can see how these things can work long term Sam, but…
“How do I build my stock up today??”
You know that quote, “the best time to plant a tree is 20 years ago, but the second best time is today”? I think that’s quite appropriate here. You need to stop being reactive to a situation like we find ourselves in now, and prepare for the next time this happens, and the next. By implementing these marketing tactics and embracing new media you will be setting yourself up for long-term success that means the next time we have a stock drought, you are better prepared for it. Not only that, but you’ll be able to ride out tough times with more success than your competitors, who a probably still using Marketing 1999 techniques.
HOWEVER – I know some of this advice is falling on deaf ears, because you need stock right now. So here’s the one thing you can do today to start the process of increasing your stock levels using your existing marketing methods along with new marketing tactics to give it extra oomph:
Hold an event
Host a free ‘sellers’ advice evening’ in a local venue. Invite along some colourful and entertaining local experts to give a short presentation each. Invite the press, along with a professional photographer to take some great images you can use to promote the next one. Weekdays work best for these types of events, particularly mid-week, and from around 7-9pm. Offer wine and nibbles so people are relaxed, and feel it’s more of a social event than an opportunity to be sold to.
Promote your event using both traditional and new marketing methods:
Traditional marketing – use canvassing and your print ads to promote the event
New marketing – video the event and share it afterwards using social media. Produce a transcript of each presentation and create an ebook using the slides as visuals. Offer it on your website in exchange for an email address.
Would you like to have a chat with me about your marketing? In just 20 minutes, I can assess your current marketing and tell you what you can do right now to fix your stock levels. I only offer a few of these spots each month, and those who grab one find them super useful, packed with easy to implement advice. Here’s what some of them had to say about their calls with me. Perhaps you recognise a name or two?
“I’ve just had a 15 minute chat with Sam on the phone, what a ball breaker! She told me a few things that I didn’t want to hear but my god she knows what she’s talking about! Looking forward to working with Sam in the future, great mentor, business coach and to me most importantly a sounding board (even if she does bite!) If you need any advice, Sam is well worth a call”
Benjamin Matthews, Business Owner at Benjamin Matthews Estate Agents
“Sam is entertaining and engaging, and has an excellent, relaxed and personable delivery style, but make no mistake – her message and the information she imparts is dynamic, factual, innovative and refreshing.”
Jan Hytch, Partner at Arnolds Keys LLP and Past President of the NAEA
“Sam is friendly and personable, and really knows our industry. I would recommend her without hesitation – Thanks Sam!
What to watch next: How To Generate More Market Appraisals – (Marketing for Estate Agents)