CAPTURING LEADS VS CULTIVATING RELATIONSHIPS

Every week, I get three to five calls from telemarketers offering to “sell me leads”.  I also get calls from scores of web vendors promising to “capture” visitors who come to my site, while other sites encourage me to bid (a la Ebay) on existing “red hot” leads that they have generated.

I don’t know about you, but I am not looking to be sold leads, and I certainly don’t want to capture anyone.  I have never viewed prospective clients as commodities to be bought and sold. 

A successful, long-term business is built through relationships, not by capturing strangers.  The goal is to create value, not take hostages.

Part of what causes so many real estate agents (and brokerages) to have poor reputations is that too much attention is paid to the transaction and too little attention is paid to the people involved. 

When the clients you work with have been “sold” ,“captured”, or auctioned to the highest bidder… really, how much hope is there for the relationship?

I have built my business by referral, one satisfied client at a time.  That means my goal is to work with people who have been referred by people who know, like and trust me because they know I’m competent and they know I care about the well-being of my clients. 

I spend a lot of time talking with my clients about “exit strategy”… in other words, making sure you can get out of whatever you’ve gotten yourself in to if circumstances should change down the road.  Sometimes, if there’s not a viable exit strategy, then the deal never happens. 

But that’s for the best. 

The goal for anyone committed to long-term sales success should be to focus on the “happily ever after”, not merely the here and now.  I need clients who love me every bit as much 12 months from now as they did when we were together at the closing table.

And that rarely happens when you’re bought, sold or captured. 

REAL ESTATE ECONOMISTS DESCEND ON DENVER

The National Association of Real Estate Editors wrapped up its 46^th annual convention at The Brown Palace Hotel in Denver this weekend.  The convention, which featured hundreds of editors from newspapers, real estate magazines and industry websites, focuses on coming trends and technological innovation.

Lawrence Yun, head economist for the National Association of Realtors, said in a speech on Friday that demand is so strong for housing right now that many areas of the country could see 10% appreciation over the next 12 months.  He cautioned, however, that appreciation would probably be less than that if builders re-enter the market on a large scale.

New construction has essentially been grounded for the past five years.  Here in Colorado, nearly three-quarters of the builders who were building homes in 2007 have shut down, left the state or declared bankruptcy.  The process to jump start new home construction can take up to 24 months from the time financing is secured, as builders must clear zoning hurdles, build infrastructure and hire subcontractors before the first foundation is poured.

Stan Humphries, lead economist for Zillow, said that the recovery would look more like a “stair step” than a steady climb.  As demand pushes values higher, homeowners who have had little or no equity will jump into the market and list their homes, which will cause appreciation to stall.  Once those homes are sold, there will once again be a shortage, leading to more gradual appreciation. 

The one consistent theme among economists is that there is demand that is real and which figures to last for several years.  There are three main reasons for this, according to the economists:

-  Millions of adult children (ages 25-34) eager to buy a home after moving back in with their parents during the recession

-  A strong influx of first time buyers who are being encourage to take advantage of low rates and high affordability

-  The return of “first generation” foreclosure households coming back into the market after six or seven years on the sidelines

The one commonality with all three of these groups is that they figure to be far more interested in affordable entry-level housing than in luxury, high end homes. 

That suggests that appreciation gains will continue to be strongest below the median price, while the higher end of the market may take longer to recover.

PURPLE COW

People have far more choices, but less time than ever to figure them out.  

That's the opening premise of Seth Godin's book Purple Cow, which implores marketers and salespeople to stop offering ordinary products in ordinary packaging and, instead... be extraordinary!

We're living in the post-TV age, according to Godin, where mass marketing has been replaced by niche marketing, long cycles have been replaced by extremely short ones, and the fear of failure has been replaced by the fear of fear itself.

You must be remarkable, Godin says, or you might as well be invisible.

Because there are so many forms of media and communication available today - television, Internet, print, Facebook, Twitter, Instagram, texting, etc - niche marketers have more opportunities today than ever before to connect with their specific audiences.  

Therefore, it's time to ignore the masses and focus on the people you actually want to do business with.  Television is no longer an effective way of conveying your message to my 13 year old daughter.  But Instagram is.  Radio ads won't work in pulling customers into a new Yogurt place.  But building a Facebook Fan Page might grow your business exponentially.

Godin's Purple Cow is about teaching salespeople and marketers to lean into their niches, about building brand and product loyalty through finely targeted, specifically marketed messages and products.

One interesting example of a company building a Purple Cow brand is Jet Blue, which offers only limited service out of DIA (now) but is a major player on both coasts and one day will be more prominent in Colorado.  In addition to offering free bag service, free DirecTV and travel credit any time your flight is late, Jet Blue encourages people to dress up on their flights, often offering a free round trip ticket for the "best dressed passenger" on the plane.

It's innovation like that which causes people to talk, to become raving fans, and to develop fierce brand loyalty.

Godin's Purple Cow teaches us it's okay to take a risk.  In fact, it's pretty essential.  If what you're doing feels uncomfortable and no one has done it before, chances are you're on the right track. 

If that's you, keep going.

DENVER HAS LOWEST DELINQUENCY RATE OF ANY MAJOR CITY IN THE UNITED STATES

Real estate research firm CoreLogic has released its spring 2012 report on mortgage delinquencies, and its findings are great news for Colorado:  Denver has the lowest mortgage delinquency rate of any of the 25 largest cities surveyed for the report.

In both the Denver metro area and the entire state of Colorado, only 1.4 percent of all homes with mortgages were in foreclosure, which generally means that three or more consecutive payments have been missed.  Only four states reported lower delinquency rates – North Dakota, Nebraska, Alaska and New Jersey. 

Chicago had the highest foreclosure rate of the 25 cities surveyed, with 6.4% of all mortgages in foreclosure. 

The spring report is a far cry from just a few years ago, when Colorado actually led the nation in foreclosures per capita during 2005 and 2006.  It certainly appears that we have worked through the cycle, and as report after report declares the Denver metro area to be a seller’s market, there are expectations of much better days ahead.