As a real estate agent, you compete with hundreds, if not thousands, of other agents every day for business. Without a strong value proposition, you’re likely to be viewed as “just another agent”.
Whether you are marketing your services, talking with a friend who can send you referrals or sitting in front of a homeowner, your ability to communicate, very simply, how you are unique among agents is critical to your success.
The question that pops into the heads of people reading your ads, friends who could send you business or the homeowner trying to decide if they should sign your listing agreement is this; “Why should I hire you over any other agent?”
In this article, and interview, I have turned to a friend, and one of the nation’s leading authorities on value propositions, Tim Pearson.
Who is Tim Pearson?
Tim has served as the Global Co-Chairman for Marketing for KPMG, the accounting and consulting powerhouse, so he has a thorough understanding of how to position a professional service to compete in the marketplace.
He has also built and sold two advertising agencies with annual revenue exceeding $200 million.
Tim has won just about every possible award and accolade, including;
Advertising Age Best
Wall Street Journal Best
Clio – the esteemed international award for the creative business.
Advisory Board for the Nobel Peace Center, Oslo, Norway
Harvard Business School’s Dean’s Research Society
He is also the author of The Old Rules of Marketing Are Dead. 6 New Rules to Reinvent Your Brand & Reignite Your Business which has appeared on several bestseller lists, including the New York Times, USA Today, Amazon and Barnes & Noble. You can find his book here.
Let’s listen in as Tim shares his thoughts about how real estate agents can create a value proposition.
Listen to the interview
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One of the most important things you can do as a real estate agent is to define and communicate how you’re unique in a way that matters to your target audience. Today we’re going to be talking about value propositions, what they are, why you should have one, how to create a value proposition and how to use it in your marketing to stand out from the competition.
Hi, and welcome to the Real Estate Strategist podcast. I’m your host, Greg Lyles, and today I’m joined by a very special guest, Tim Pearson. Tim is a nationally recognized authority on branding, marketing and advertising.
He’s the author of the New York Times bestseller, The Old Rules are Dead: 6 New Rules to Reinvent Your Brand and Reignite Your Business, and has been awarded with countless advertising industry awards, including Advertising Age’s Best and the Wall Street Journal’s Best. He built two advertising agencies to annual revenues of $200 million.
Welcome Tim. So glad to have you join us.
Let me ask you this, Tim, what is a value proposition?
Well, at its core, a value proposition is derived from an in depth understanding of not only what motivates a buyer, but what motivates a customer as well.
At its core, it’s an examination in quantified assessment.
Now, this is within a defined competitive space. The benefits, cost and worth that an organization, or in this case if someone’s a realtor, an individual, what they deliver to the buyer.
The proposition should always, and I can’t stress that enough, always be communicated in the form of benefits, in all forms of messaging and communications.
A lot of people actually, Greg, use it interchangeably with brand positioning.
If that’s the case, think of it more as it is the tangible value of brand positioning.
Okay, so basically then, Tim, it’s your promise of future benefits. It lets the homeowner or the home buyer know that, “Hire me today and this is the benefit you can expect to receive in the future.” Is that correct?
Yes, and the key of course in this case being a tangible benefit.
Provable. Based on evidence. Not a promise that is never seen again by the buyer or the consumer.
Right, so to the point that you can reinforce it with your track record or with client testimonials, that’s how you reinforce that brand promise.
In all of your messaging, all your communications, and in your one-on-one interface with your client. That probably more than anything else is the proof in the pudding of what your value proposition is.
Let me ask you this, and this sounds like an obvious question, but why should a real estate agent have a value proposition?
Well, in the end, it’s the only thing, the only thing, other than dropping your commission, or your photograph or who your work for, it’s the only thing that differentiates one agent from another. Otherwise, if you don’t do that, you’re simply like everybody else. There’s nothing that differentiates or distinguishes you from your competitor.
Well, and I think one way we see that, or real estate agents see that, is that when potential clients can’t distinguish how one agent is different from another, they tend to view the agent and their services as a commodity item.
We all know that, you know you go to the Chicago Board of Trade where commodities are traded, commodities are traded on two things, price and convenience.
That’s why agents often see sellers wanting to negotiate their commission is because they don’t perceive that there’s anything unique that they’re going to get by hiring that agent, so they want that agent’s services at the lowest possible price.
That’s a great example.
“Think of it this way; The absence of a value proposition takes money off of your dinner plate at night.”Tim Pearson
That’s pretty strong.
It’s the reality of the market place.
Okay, so hopefully agents see why having the value proposition is critical to their success. What steps should an agent take if they want to create a strong value proposition?
Okay. Well, there are five easy, but they’re all critical, steps to the creation of a value proposition.
First, you need to understand who your competitors are. What the competitive set is that you operate within.
Secondly, you need to understand your target market. In the end, you need to understand in depth what is the most important thing to them?
Third thing you need to do is you need to develop a written value proposition which can guide you. One might ask, “Well, why does it need to be in writing?” Well, if it’s not in writing, the likelihood is you don’t have a value proposition.
The fourth thing then is, once you have a written value proposition, and we’re not talking about a value proposition that is hundreds of words.
Probably not even dozens of words.
It probably is something that is more like six or eight or ten words, because it’s that type of specificity which allows you to go back over time as you develop your messaging and your communications and your programs.
It’s the thing that you tie all of that activity to, so it needs to be clear, concise, understandable and persuasive. All of your marketing efforts should be aligned with your value proposition. If they’re not, you’re wasting time and you’re wasting money.
The last thing is that ultimately a realtor or anybody delivering the promise of a value proposition, you have to deliver tangible, real benefits. Not the promise of benefits, but real, tangible benefits to your buyer or your seller.
That’s right, because one of the things I did in the early days of when I was a real estate agent was I surveyed a few hundred homeowners in my chosen niche market to identify what was important to them.
It’s easy for agents to assume that we know what everybody wants, but I competed with agents who, at the time, had all sold close to or over a billion dollars worth of real estate and so I knew I was faced with some pretty stiff competition.
When I surveyed these homeowners I found out, Tim, that the one thing that stood out above everything else was that they wanted results. They told me they had seen every dog and pony show, they’d heard every promise. It was very cut and dry.
They said, “We want results.” I went on FMLS and looked and saw that what they were saying was very true, because 70% of listings did not sell in the first listing period. They had to be re-listed before they sold. Homes were routinely selling at 20% discounts from the original list price.
I kind of viewed that as somewhat inexcusable, so I had to set out and identify how I could deliver superior results.
Once I did that, my value proposition to the homeowners in my niche market became, “You’ll achieve market beating results when selling your home or I’ll sell it for free.”
I offered that because I had my own company, so I had that latitude to waive my commission if I didn’t produce those market beating results, but I also knew that none of the agents that I competed with would be able to match that guarantee, because the companies they worked for wouldn’t allow it.
That enabled me to compete very effectively. When I sat down with homeowners I would just explain, “This is what I do. This is how it works. If I don’t deliver superior results, you don’t pay me. By the way, ask any of the other agents that you’re considering if they will match that,” because I knew they couldn’t.
What are some examples of great value propositions that either you’ve created for clients in your career or that just stand out in your mind?
Okay, well let’s go to some examples that everybody might be familiar with, like Chick-fil-A. I believe that the combination of optimal drive-through experience, the fact that they have people who take orders in their high traffic market outside in the parking lot, and then they deliver a single product, chicken, is the single best value proposition in today’s fast food category
You know, another fast food example that I think has always stuck out was Domino’s.
Their value proposition was fresh, hot pizza delivered to your door in 30 minutes or less or it’s free, guaranteed.
That was not anything that people had to wonder about or think about. It was just clearly stated. They knew that they’re going to get a fresh, hot pizza delivered to their door in 30 minutes or less or it’s guaranteed. Now, I think, they dropped the 30 minutes or less, because I think there were some problems in some areas being able to deliver.
There’s a real estate agent here in Atlanta, Mark Spain, who has one of the best real estate value propositions that I’ve seen, and you see it on billboards all over the metro Atlanta area. It simply has a photo of Mark and it says, “Your home sold guaranteed or I’ll buy it.” There’s no confusion when people see that on a billboard as to what he’s offering. He’s offering a guarantee of results or that he will buy their home.
Tim, once an agent has that value proposition, once they’ve written something that communicates to their target audience what that person can expect by hiring them, how should they use their value proposition in their marketing?
Well, a smart agent embeds it in every piece of marketing, every piece of collateral, every sign, every document. I certainly understand that there are some constraints depending on the brokerage that an agent works within, but having said that, let’s use your example that you mentioned just a moment ago of Mark.
I would expect, since he has carried that value proposition into outdoor advertising that if you and I were to go and look at all of Mark’s communications materials, his collateral, his other types of advertising, that that value proposition is clearly and persuasively articulated in everything he does and it’s the first thing that he says and it’s the last thing he says when he meets a new prospect or signs a new client.
Yeah. I would agree. I would agree.
In fact, it’s interesting that you mention it’s the first thing he says, because years ago when I was an active agent it’s common to go to a cocktail party or some event where you meet people and the conversation at some point turns to, “Well, what do you do?” I tell agents that I never said I was a real estate broker. I said, “I help people in Buckhead achieve market beating results when selling their home,” because if I had just simply said, “I’m a real estate agent,” or “I’m a real estate broker,” people would have said, “Oh, that’s great. How’s the market?”
When I told them that I helped people in Buckhead outperform the market when selling their home, their interest level immediately piqued and the next question was typically, “Well how do you do that?” It was just a natural way of kind of working that value proposition into a conversation.
Well, and in doing so it also preempts you positionally relative to your value proposition being one that another agent or realtor cannot take away from you once it’s been said.
That is unique and proprietary and preemptive to you.
Right, and it’s got to be something that helps the public, anyone that’s interested in doing business with you, see how you’re unique, because there are a lot of real estate agents out there and it’s easy to pick up the phone and call one right after the other.
Without that value proposition, they don’t see how you’re any different.
The thing is is that the National Association of Realtors says that 87% of homeowners only interview two agents before they list their home. 70% will only interview one agent.
In getting your value proposition out to the marketplace consistently through all your communications, you’re letting 70 to 87% of homeowners know why they should call you first.
Well, and I’ll tell you, to sort of carry on with your example.
In the last three years I have listed two homes, one in the south east and one in the north east.
I have interviewed probably, during that three year period, nine to ten, maybe as many as 12, realtors. Each that has come in with a marketing plan, a historical results, whatever documents they try to individualize that’s been provided to them by the broker, the national company, and I can tell you to a person there’s not a single one of those realtors that has differentiated themselves to me when they left the meeting.
The opportunity for the proper value proposition to be developed by a realtor, I think, is huge.
Unbelievable. Well, hopefully our listeners have a little better understanding of the importance of having a clearly defined value proposition and will take the time to create and use one to help them stand out from their competition and grow their business.
If you’d like to learn more about value propositions and how to become a great marketer in general, I encourage you to pick up a copy of Tim’s book, The Old Rules are Dead: 6 New Rules to Reinvent Your Brand and Reignite Your Business.
I’ve included a link in the show notes below that will take you to Amazon where you can buy a copy.
I’ve got my own copy. I’ve read it. Now I’m on my second read and every time I pick it up I find something that I never knew before. It’s those nuggets that we pick up that we implement that really help us in our business.