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Less is More

If I asked you “what business are you in” and your answer is “the real estate business,” you (like 98% of REALTORS®) are wrong according to Michael Russer of Russer Communications.  Michael is a genius of sorts; he claimed the title Mr. Internet before we even found out that Al Gore invented it.  Russer was tech before tech was cool. He made quite a name for himself in real estate circles back in the 90’s with his Mr. Internet moniker and a passionate belief that the Internet is not about technology, it is about connecting people. Now he flies all over the world telling real estate and other businesses how to use the Internet to market themselves and connect with clients and customers. 

So why does Michael Russer think 98% of agents don’t know what business they are in?  Actually, he asks his classes a different question.  He asks attendees at his seminars if they have a specific target market that would be recognizable by visiting their personal web site.  98% do not have such a specialty or niche market.  In other words, only 2% of REALTORS® are NOT generalist.

I am not a REALTOR®, but I did stay in a Holiday Inn Express last night, and that empowered me to come up with a few niche market suggestions for those of you who might want to stand out from the 1.3 million other REALTORS®.  One of my strong beliefs is that if you try to be everything to everybody, you will end up being nothing to nobody.  This is as true for an association of REALTORS® as it is for each individual member.  It is also true in every other part of our lives.  Remember High School?  If you did not find your niche (band, AV Club, football team, etc.) you really struggled to fit in – to be relevant. 

Why then, do 98% of REALTORS® fail to develop a niche within the overall real estate industry?  For the same reason many other businesses fail to find a target market – they fear that limiting the pool of potential clients will limit their success.  The concept that less is more is both counter-intuitive and irrational.  Associations often try to serve all their members, but that just leads to catering to the lowest common denominator. 

The association I work for in Charlottesville has defined our primary customer as the professional REALTOR®.  That means we develop products and service – create value – for the top agents and brokers and do not worry about serving the needs of the part-time agents that are not in the business as a profession.  If the products and services we develop for the professional agents are also attractive to other agents, so be it, but we do not try to cater to their needs. 

If you apply this logic (or illogic if you prefer) to real estate, then an agent or firm would have to decide who they wanted to have as a primary customer.  Currently, it seems 98% of REALTORS® think every human that might buy, sell, lease, or rent real estate is their primary customer.  I’d suggest that is a little broad and by spreading yourself out, you have made your market niche unidentifiable.  That’s okay if you don’t mind competing head to head with 98% of the other agents in your area. 

Less is More Math

Just for illustration purposes, here is some simplified math to explain the less is more philosophy.  Let’s look at a typical local marketplace that has a city as a core and is surrounded by counties.  For this illustration, we’ll just look at residential buyers and seller.

20% buy/sell in the City

20% buy/sell in Green County

40% buy/sell Blue County

10% buy/sell Orange County

10% buy/sell Red County

Total         100%

If 100 average agents are working the entire market, each would get roughly 1%.  On the other hand, if 2 agents decide to specialize in a niche market, the math changes.  Let’s say the 2 agents decide to develop a niche in one county – agent A in Green and Agent B is Blue.  They focus their efforts on marketing themselves as the Green County Agent and the Blue County Agent.  Agent A captures 10% of the Green County market which equates to 2% of the overall market.  Agent B captures 5% of the Blue market which is also 2% of the overall market.  That leaves 98 agents to fight over the remaining 96%.

Picking a Niche

Geography is just one potential niche for REALTORS®.  Here is a short list of specialty areas for you to consider:

  • Country Properties
  • Condos
  • Homes for Veterans
  • Senior Specialist
  • Cowboys and Farmers
  • High-tech Homes
  • Blogger Bungalows
  • Green Homes

This list could go on forever (kinda like this post), so let’s wrap this up.  The less is more principle is not for everyone.  If you have unlimited marketing resources to capture more than your fair share of the general market, this principle is NOT for you.  If, on the other hand, you have limited resources, the less is more concept will allow you to effectively target a well-defined smaller group of potential clients.  As Michael Russer puts it, “if you’re not targeting, you’re not marketing.”