13 Aug More Money Than Sense.
More Money Than Sense.
It's been quite a while. Since I last put virtual 'pen to paper'. Been so busy of late that my focus has been on existing clients than on writing for myself.
But now. Now I feel the juices flowing again, courtesy of UK estate agency trainer, Iain White. I do love intellectual debate with these limited thinkers.
From a Facebook group (The Revolution of estate agency 2020) post by David Thomas questioning whether PurpleBricks' decision to change their business model from self-employed to employed was a mistake. Plenty of discussion and my comment that PB was a "house of cards" produced this reaction from Iain White.
"All marketing and no substance - not a long term winning strategy."
I had to 'like' that but what followed was a conversation about the marketing abilities of said PurpleBricks.
I said that they had no discernible message.
Iain replied that they had "exceptionally high brand awareness" and that they had got their message across "brilliantly, albeit disingenuous." That their message was "beautifully clear and effectively, the same, for less."
Then, further confirmation that his forte isn't marketing, he added " I can't see how anyone can question their marketing. In the early days they became the single biggest lister in the U.K virtually overnight."
I'm not sure how to put this, but let's try.
Clueless springs to mind.
Since when was "exceptionally high brand awareness" a determinant of successful marketing? It's a contributing factor, of course, and desirable. It's not enough. It requires enrollment, trust, permission and, of that, there is little. That's why every local property 'expert' has to hustle the brand. Why they get told No more often than they get told Yes.
I replied with this question: If you spend £100 million to achieve something that could have been achieved for £1 million, is that good marketing?
To which he replied, "obviously not, but if you can achieve the largest listing estate agency with the highest brand recognition in the industry for £1 million, I will eat my own nuts."
Let's first begin by understanding why advertising, per se, is a waste of money.
"Young people, not to mention people of all ages, really, really don't like being annoyed. And ads, almost always, were annoying. There is nothing beautiful, let alone useful, not to mention authentic, about being distracted or annoyed by something you didn't choose to see." - Andrew Essex, author The End of Advertising.
"There's no doubt that ad-blocking is now a very real issue for advertisers. Over a quarter of the people they're trying to reach are willfully making themselves unreachable." - Bill Fisher.
"Warning: The advertising market is dangerous, unregulated and crawling with bots, scammers and other questionable traffic. There's a serious risk that a quarter of your ads will never be seen by a real person." - Association of National Advertisers.
Now, one might imagine that if consumers are deliberately making themselves unreachable, it might not be sensible to try to reach them through advertising.
I've had this conversation, prior, with Iain White. When we disagreed on the impertinence of door-knocking. Interrupting the lives of total strangers in order to put food on the table. He wasn't averse to that. Just as he isn't averse to interrupting their attention with advertising.
So, what's the alternative? What could PurpleBricks have done for 1% of their ad spend that would generate as much awareness and enrollment?
I illustrated my point with reference to Elon Musk having spent Zero dollars on paid media. More on that later.
Unimpressed by the brand awareness, Iain switched the conversation to profitability. Had he brought that up when discussing PurpleBricks? Have a guess!
No, it was all about awareness and market share. Nothing about profitability. That the cost of customer acquisition was so high that PurpleBricks couldn't help but gain brand awareness and market share. With other people's money.
That's my argument. It can be done for less. Much, much less. If the company has the desire and the insight.
And has built something that is worth talking about. Instead of simply being just another estate agency that is "the same , but less."
Kudos to PurpleBricks for now focusing attention on local community, instead of attempting to build a national brand. But unless the message is radically different, unless they try platforms other than paid social media advertising, radio and T.V, it's a default dead strategy. It won't matter how much, or how little they spend. There won't be enrollment.
Only brand awareness.
So, what could PurpleBricks do for under £1 million that would provide a better R.O.I than they currently manage to achieve?
They have 600 brand ambassadors, for goodness sake. Not one of which is being utilized correctly.
Turn those 600 local property 'experts' into micro-celebrities within their respective communities. Not by focusing a corporate message on the local services they provide, but by allowing them the freedom to be authentic and transparent. Giving them a voice. Not a sales role.
Spend £1500 on equipment for each agent. There's the £1 million cost of customer acquisition.
Allowing them to operate as a media company. Using blogs, videos, and podcasts to attract an audience. Get them to interview other local businesses and share that on social media and in a podcast. Turning one audience into several audiences as the interviewee shares it with their customers. It's called hub/spoke distribution and it works.
It works to the extent that they build an audience of people that anticipate hearing from them. That are persuaded and that want to buy - instead of an audience that avoids because they're being sold to.
The cost of acquiring this media company that ultimately becomes a market asset, rather than a liability?
£100 for a mic. Free Audacity software to edit the conversations. Upload the episode free on iTunes or Stitcher.
A host for the podcast - £10 month.
A well-written blog. Free
A video uploaded to YouTube. Free.
A landing page or flip book that answers every question a homeowner might ask and more. A website to host the media content. Peanuts!
If you don't believe me, listen to Gary Vaynerchuk in conversation with Tom Panos back in 2017.
Start your media company. One that you own. So that you don't have to keep paying for other company's audiences.
Multiply that by 600 brand ambassadors and you have something incredibly powerful.
For next to nothing.
Which is how Elon Musk performed marketing miracles at Tesla.
"If you produce a truly revolutionary product, the marketing will take care of itself." is one of his most famous aphorisms.
Currently selling cars as fast as they can build them. Without spending a dollar on advertising!
A lot of current marketing is noise. Companies need to either shout louder, or have something better to say.
"If you want to grow, make something worth talking about. Not the hype, not the ads, but the thing. If your idea is good, it will spread....if you try to build on a rotten core, you'll succeed for a bit, bu then you'll lose." Seth Godin, Purple Cow.
PurpleBricks have tried shouting louder. It's resulted in them throwing money down the drain. Because the message was ambiguous and irrelevant.
They had to throw money at the marketing. Then convince and convert those naive vendors. Enough to make the agency, the "single biggest lister in the UK, virtually overnight" as Iain enthuses.
But at its core, a fixed fee business that operates variable hours service is never a model that will survive. Either the price goes up, or the service comes down. It's not about the money, honey!
Which is why I called it "More Money Than Sense."
And why estate agency 'trainers' need to move from the dated ideology of 'better, cheaper, bigger' to something radical that requires agencies to think for themselves. So it's no longer the blind leading the blind.
Thanks for reading this far. If you have comments, I'd love to hear from you.