Anyone living in an area for a given time knows the one or two real estate brokers who regularly market to the neighbors, i.e., “farming.” The neighbors routinely receive postcards, market reports, notepads, calendars, sports schedules, etc., throughout the year from the brokers. Those brokers also organize community garage sales, donation drives, pictures with Santa parties, and the like. As a result of this extensive long term exposure, everyone in the neighborhood knows those brokers.
Is farming right for your brokerage business?
Our broker clients routinely rely upon us to provide marketing collateral for farming efforts. So, we’ve seen all kinds of approaches, as well as lots of different results for this type of marketing. To learn more about whether farming is right for you, and steps to take if you engage in this approach, we invite you to one of our Account Executives. Here are some of the things you need to consider before you embark on this marketing approach.
1. The Neighborhood. The size of the neighborhood and the rate of turnover (resale of homes) are important considerations. The size relates a lot to your marketing budget. Sending postcards to 2,000 homes is going to cost you a lot more than postcards to 400 homes. The rate of turnover is also important. Some neighborhoods are so exclusive that people often sell off market so there is very little listing activity. Some neighborhoods are also full of rentals. You need a neighborhood that has a good rate of turnover.
2. Market Dominance. Interestingly, many neighborhoods that appear to be dominated by one or two brokers who farm it, are not so dominated. You need to examine the sold listings of the neighborhood to determine whether one or two brokers are actually dominated the sales as opposed to just dominating the marketing exposure. You probably want to shy away from neighborhoods where one broker has 90% of the listings.
3. Budget. Farming is not cheap. Whether your sending postcards every month, paying for garage sale, arranging Santa picture day events, etc., the marketing isn’t cheap. Also, you need to consider how long your marketing dollars can last. Farming for 1 year is probably throwing away your money. Farming for 3 years will probably yield good results.
4. Time. Effective farming requires more than sending marketing postcards and other collateral to homeowners once or twice per month. Brokers yield best results when they arrange community events so that the develop relationships. Many brokers door-knock with their marketing collateral to get the chance to meet and greet the neighbors. These activities take time. Do you have that kind of time?
5. Opportunity Cost. Anytime you’re spending marketing dollars and your time, you need to determine whether it’s making business sense. You could be spending those marketing dollars and all that time doing a different type of prospecting that yields better results. Brokers need to sharpen the pencil and do some analysis on how much they expect to yield from farming vs other types of activities.
If you’re interested in exploring more about farming we invite you to meet with one of our Account Executives, who consult every day with brokers about marketing strategies. Our Account Executives can help you determine whether farming is a good strategy for your business, as well as the step-by-step process to analyze appropriate neighborhoods, determine the types of marketing pieces and timing for those pieces, effective ways to engage the community, and much more. Please contact one of our Account Executives to learn more.