Deciding where to market yourself as a real estate professional is remarkably difficult. There are infinite potential leads out there, and almost as many strategies for reaching them. Pursue all of them, or the wrong ones, and you’ll run out of money very quickly.
One of the best ways to hone in on winning strategies is to pick a niche where you can not only compete, but dominate. It’s better to be “a big fish in a small pond” than the opposite. In other words, being the clear leader in a market, even if it’s small, can beat being a runner-up in a larger market.
Vying to be the leader for your town or neighborhood — targeting a geographic niche — is a very common strategy. But real estate agents should also consider targeting other niches, those defined by traits like ethnicity, religion, sexual orientation, or native language. Why? Because marketing to a niche can be significantly cheaper.
Whether you pursue an inbound real estate marketing strategy, a paid marketing strategy, or both, targeting a niche can save time and money. This article will help you determine whether a niche marketing strategy can work for you, and explain why that strategy could be a big cost saver.
Choosing a niche
Before you get excited about carving out a niche for yourself, you need to be certain this strategy will work for you. Many aspiring professionals just assume niche marketing will work for them and are shocked when they crash and burn. That’s unfortunate, because it’s fairly easy to determine whether you can succeed with this strategy. Here’s how:
Step One: Have a real niche.
Market niches are sometimes called “affinity groups” because they’re made up of people who not only share a trait, but also consider that trait important, and generally positive. The trait can be racial or ethnic identity, religious affiliation, neighborhood, sexual orientation, veteran status, or nearly any other characteristic.
But just because something is personally important to you, don’t assume you’ve got an affinity group. You may love driving your Mazda around Houston, but that doesn’t mean you have an affinity group. Mazda owners in Houston don’t consider being a Mazda owner in Houston such a big deal. That may seem like a silly example, but you’d be surprised how many people try to launch careers by serving “the central Pennsylvania model railroad community.”
Here’s a good exercise: Describe yourself in a sentence. Any trait important enough to include probably has an affinity group. Otherwise, it doesn’t make the cut. Say you responded with “I’m a single Baptist mother of two living on my family farm in Alpharetta, Georgia.” Single moms, Baptists, and farmers — all prospective affinity groups. Maybe you like to knit too, but that wasn’t important enough to mention. Guess what? It’s not an affinity group.
Also, be sure the group you’re targeting is active in making home buying or selling decisions. That criteria guided Joda Mize, the founder of Girl’s Guide to Real Estate, in creating a boutique real estate publication for women. “With women being top influencers and decision makers during the purchase of a home, it just made perfect sense to give them what they want: More information about the process and how to do it,” said Mize.
Step Two: Determine your niche size.
If you do have a viable affinity group, you’ll want to create an estimate of its size. There’s no need to be highly scientific with this; a rough estimate will do. Let’s take the previous example of our Baptist mother in Georgia.
She could start by counting the number of Baptist churches in town, and estimating the average number of members for each. Say there’s 23 churches with an average of 400 members each, so we’ve got 9,200 people. And let’s assume 10% of those people move every year. (You can get precise data for your area by the way.) That’s an average of 920 movers each year. We’ll divide that number in half, because there’s more than one person in each household, and that gives us 460 households moving each year. Finally, let’s divide that in half again to account for homeowners vs. renters and we’ve got 230 households buying or selling each year that also happen to attend Baptist churches.
Now, our aspiring agent isn’t going to land every one of those transactions, but if she really dominates this niche, getting a quarter of them is totally reasonable, and that’s about 58 transactions a year. Not bad!
Try this kind of simple math for yourself and see how the numbers look. If you’re looking at a decent number of transactions, targeting the niche is probably a good use of your time and resources.
Step Three: Don’t be a phony.
Affinity communities will detect (and reject) imposters immediately. So make sure you have an authentic connection to the community you’re targeting. That spring break trip you took to Tijuana isn’t going to win over the Spanish-speaking buyers of Des Moines.
You don’t necessarily have to be a member of the group yourself. “Many male fashion designers design for women,” noted Mize of Girl’s Guide to Real Estate. “But the most important aspect is that the targeted community is served with care and expertise.”
You must be intimately familiar with the targeted group’s culture. This is particularly true if there are unique concerns that may affect their transactions. For example, gay and lesbian homebuyers may have questions related to their marital status because marriage laws for same-sex couples vary by state. Ignorance of a niche’s concerns can be fatal. On the flip side, being educated on such matters can earn you hero status, and it’s a golden opportunity for blogging or other inbound marketing activities.
If your connection to an affinity community is weak don’t give up, you’ve just got some work to do. Join community civic or professional organizations. Volunteer at a cultural center. Invite a community leader out for lunch. You’ll learn a lot, gain credibility, and have some fun while you’re at it.
Save big with your niche market
If you’ve found a viable niche to target, it’s time to create a marketing strategy. Remember, your goal isn’t just to reach that niche, but to become the “go-to” agent for its members. Here’s where the magic of niche marketing really becomes apparent: It’s comparatively cheap.
Reason 1: Narrow Target = Reduced Waste
Advertising pioneer John Wanamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” And he was probably off by a good twenty-five percent.
The truth is, even with advances in advertising measurement, huge sums of money are wasted in advertising to uninterested or unqualified prospects. Separating customers to whom you appeal from the masses is difficult, so most marketers just spray their dollars around and accept that there will be lots of waste.
“All life is an experiment. The more experiments you make the better.”
— RALPH WALDO EMERSON
But when you’re marketing to a niche, the risk of wasting dollars is greatly reduced because your audience does you the favor of segregating itself into easily targeted little clumps. Not only is your risk reduced, but most of the work is done for you. You are (pardon the expression) shooting fish in a barrel.
Again, let’s look at our Baptist mom in Georgia. Placing an ad on the local Top-40 radio station probably costs thousands of dollars. But an ad on the local Christian station is probably a fraction of that cost. It will reach far fewer people, but they will be just the prospects she wants. Even better, she can tailor her message to their interests, highlighting her own faith and emphasizing her connection with them.
Want an even cheaper option? Our Baptist agent could underwrite the printing of church bulletins for every one of the local Baptist churches in exchange for a note on the back acknowledging her donation. Just like that she will gain instant name recognition with every member of her target market, at a cost of pennies per person.
Opportunities like these abound when you’re niche marketing. Be resourceful and creative — you’ll be astounded at what you can find.
Reason 2: Share of Voice
The “share of voice” concept is familiar to big-budget advertisers, but usually foreign to small-time advertisers because it’s typically way beyond their budget. Share of voice is basically the percentage of the total advertising space available that an advertiser owns. For example, if there are 16 ads played during an episode of Friends, and Doritos owns 8 of those, they have a 50% share of voice.
This measure is important because having a high share of voice greatly increases your impact on an audience. If you only have a 10% share of voice, your message may not be remembered at all, but if you have a 60% share, it’s your competitor who might be completely forgotten.
As an agent, your marketing budget will rarely be large enough to worry about your share of voice, unless you do niche marketing. Because you are communicating to a smaller audience (and typically paying less) you can afford to be the leading voice.
Imagine this: If your niche market is military veterans in the Pittsburgh area, seek out the local VFW post. Offer to pick up the cost of desserts any time their hall is rented. They get a wonderful perk for attracting renters, and you get a placard on the dessert table every time. Just make one demand: No other agent can have their name similarly featured. For that venue you now have 100% share of voice.
Don’t be shy about making this kind of request, even if it seems pushy. Donors ask for this kind of exclusivity all the time. It’s a fair trade-off in exchange for your generosity.
Reason 3: Become the “go-to” agent
The final reason niche marketing saves money is also the biggest reason. When you’ve successfully targeted a niche (by reducing waste) and become the leader in that niche (with the largest share of voice) you’ll find turning prospective customers into leads and customers becomes much easier.
Turning a prospect into a customer is a long path. You have to make them aware of you. You have to earn their trust. You have to demonstrate your ability to meet their needs. You have to differentiate yourself from your competitors. The list goes on and on, and at any stop along the path there is the risk of losing them. That’s why a funnel of 500 leads might lead to 5 transactions.
But an effective niche marketer gets a huge shortcut. When you become the recognized leader in a niche, prospects will automatically skip lots of steps along the path. They will already be aware of you, they will already trust you, they will already see you as different than your competitors, and much more. In short, they have an excuse to bypass a lot of the consideration process.
In fact, if you really dominate a niche, instead of looking for reasons to use your services, prospects have to think of reasons not to use your services. There even becomes social pressure to choose you. Instead of asking why they chose you to be their agent, their peers are more likely to ask them why they didn’t choose you. It’s like having a referral network on steroids.
Conclusion
There are many reasons to consider pursuing a niche marketing strategy if you’re well-positioned to do so. You can save money and develop customers, often enough to launch or sustain your real estate career. Perhaps most importantly, you can create a very rewarding relationship with a community, one that will make your life as an agent much more fulfilling.
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