Articles, Blog

Spend Less Money in Marketing by Getting Vendors & Affiliates to Help

October 12, 2019


And a lot of people are willing to contribute
to your marketing efforts with the hopes that you will generate even more business through
that marketing and then they will ultimately will trickle down and get more business as
well too. Hi, this is Brian Icenhower and I’m here to
talk to you a little bit about how we as real estate agents can get help with an increasing
demand on marketing costs from different affiliates and vendors and other businesses to help us
be able to afford to market both our listings and our own businesses out there and what
are some of the best practices for getting marketing dollars marketing dollar contributions
from affiliates and oftentimes we as real estate agents don’t realize the importance
of looking to these affiliates for contributions. It’s being done widely out there whether you
know it or not. For example, we have a lot of clients that
are in their first year in the business. A lot of our coaches have clients that are
genuinely renting anywhere from 2000 to $5,000 per month from affiliates to help subsidize
the cost of their marketing expenses. Many of the top teams we coach in the country
are getting around $25,000 per month contributed to them towards those marketing costs. And the more and more I talked to people,
the the more often I see that it’s not being taken advantage of. And quite frankly with the advance of technology,
we are seeing an increasing need to spend money in marketing. And that’s contrary to a lot of what people
would thought with, with the increase in technology. But we’re seeing marketing costs go up and
we’re also seeing an increasing opportunity window open up to get contributions from affiliates
in the business that become a win win for both parties to succeed together. So you’ll see those all over the place. So when we talk about who these affiliates
are that are helping out, oftentimes it’s the mortgage lender that is the most significant
contributor. By fall, a mortgage lenders tend to stand
to make a lot of money from an agent’s business. And fact, mortgage lenders typically do market
to agents more than they even do to the general public. You are their target, just like listings and
buyers are your target as a real estate agent. But really most of the low hanging fruit that
you would be going after out there would be um, settlement type companies that are involved
with the closing of each sale. And that could be anything from a, you know,
an escrow officer or a title company or a title closer depending on where you live. Um, home insurance company, fire hazard insurance. I’m a home warranty companies are big contributors
out there, natural hazard disclosure companies, title insurance companies. Um, all of those get very, very involved with
the closing of a sale. And in addition to that, we can move outside. That group has a lot of people have found
there’s a lot of marketing dollars out there from CPAs or accountants, attorneys, even
furniture stores. Car dealerships are big, big contributors. Moving companies are a very big contributor
for a lot of our clients as well to financial advisors, especially those that are commission-based. Financial advisors tend to to have a little
bit more marketing dollar and more of a marketing mindset out there. Notice that larger companies tend to be better
than than smaller companies. Larger companies have very large marketing
budgets and believe it or not, these are things that are done all the time from manufacturer
to sales and a lot of different industries, whether it be the furniture business, the
moving business, a car dealerships, very common to do joint marketing with the end user. In this case it’s the real estate agent that’s
actually actually selling the property that generates all the sales, which is why a lot
of agents are realizing that and they’re tapping into those resources and as real estate agents,
we are very much the center of the front line on the referral spider web where we have the
power to refer a lot of business people come to us, they moved to a new area, they look
to us for who to use for all of these things. Who to go to for a dentist, who to go to for
a local accountant. So we have a lot of power of referral and
if we actually get affiliates and vendors that provide good customer service to us,
that’s of course important. We’re going to send a lot of business and
oftentimes agents just forget to get business back. They just assume that the good customer service
is all they’re going to get from that relationship and a lot of people are willing to contribute
to your marketing efforts with the hopes that you will generate even more business through
that marketing and then they will ultimately will trickle down and get more business as
well too. It makes a lot of sense. Now, do you understand what we’re talking
about? The settlement closing companies? Sometimes we do run into a an oftentimes we’ll
run into a different federal laws like RESPA and we need to make sure that we are being
very compliant on that. So I will say that, I mean I, you know, if
you have a lot of concerns about that, do check with your local attorney or check with
your broker. Most brokers should be up on that. They should be up with those laws and rules. So check with them as well too. However, when you do deal with these larger
companies, like larger mortgage companies, title companies, et cetera, et cetera, they
typically are used to it and they do have their own forms that you can use. So I would use their forms and they almost
always have them whether they say it or not, you’ve got to go up high enough. I’m understand that if you’re dealing with
just the loan officer or just a sales representative for one of these companies, typically if you
get up to a branch manager and area manager or regional managers or something like that,
they’re very familiar with this topic and they we can actually educate the sales rep
on it too cause there will be some payback. You are asking for money, so it’s not surprised
to get some pushback based upon compliance, but make sure that you follow through with
that because usually if you do move up the chain, they will start to learn that there
is a compliant way to handle this and that the higher ups in the company definitely know
how to get this done in a way that’s compliant and using their forms is always a better way
to go. Right? So very important to do there. They all almost always be able to get your
own agreements with that. A lot of different ways we can add value here
to them, but let’s start with the first way and we have to be careful how we do this too
because again, the reason there is a lot of compliance issues around this is because we
don’t want to be in what is often perceived as a kickback. We do not want to pay, let’s say a mortgage
company based upon or get paid because we gave them business. That is where most of the compliance rules
have come around, so we don’t want to ever base it that way. However, you know, a mortgage lender is going
to kind of think of it that way. I mean, you would do, if someone comes to
you and says, Hey, I want you to contribute $3,000 a month towards my marketing expenses,
they’re going to think, okay, well if I’m giving you $3,000 a month times 12 months,
that’s $36,000 a year. What am I going to get in return? And all of a sudden evolves into that conversation,
or at least a thought in their mind, okay, I wonder how much business they’re gonna give
me. So it’s very important that when we talk about
their return on investment, the payments aren’t tied to a specific amount, but we can do it
that way at best. We can take a look at it a year from now and
maybe have a one year agreement and see if it was a worthwhile investment for me. I’m having a conversation about how that might
work and will help your understanding of the of the process as well too. A lot of people are surprised and don’t know
what mortgage lenders make, but they typically do quite well. And it’s under understand that when you’re
talking to the loan officer or the loan originator, the mortgage lender, it’s a lot easier if
we can get into a conversation with the branch manager, regional director or something like
that, because the bank actually makes a lot more of the commission than the loan originator
does a loan officer. So whereas a loan officer might make somewhere
around 1% on the loan amount of alone. So let’s say we’ve got a $200,000 loan, um,
they might make 1% of that. Okay. However, the bank, um, can make anywhere from
four or five on government subsidized loans, like FHA, VA, et cetera, et cetera. They’re making six to 7% on the loan amount,
and that starts to add up to a, to a high, a high dollar amount there. So oftentimes the loan officer alone won’t
pay out of pocket. We need to get prime. Most of our contribution from the bank itself
and banks are set up to to spend large amount of marketing dollars that way, and then it
just becomes an ROI conversation. Like if we know someone has a $300,000 loan
amount and they’re making, let’s say 6% on a, the bank is making 6% on that loan amount. All of a sudden we’re talking about making
$18,000 on a loan that you give them, whether that’s shared with the loan officer or not. That’s the contribution that you’re providing
to them because they’re making, you know, 6,000 or 100,300 thousands as 18,000 by them
contributing $3,000 a month to you, that’s $36,000 over a course of a year. Heck, if they’re making $18,000 per loan,
that means they only have to get one referral from you to get their money back, for referrals
from you to double their money, six referrals from you in one year to have a three to one
return on their investment, which is excellent. So if you can provide that, all of a sudden
you’re going to subconsciously have an obligation to support this lenders supporting your marketing
costs. Now again, we can never tale a compensation
structure that way. This is a return on investment conversation. We’re going circle back at the end of the
year to see if there was a worthwhile marketing investment for me, but having any type of
compensation structure based upon that is deemed as what’s commonly called a kickback
and we don’t ever want to do that but businesses business and they are going to have that thought
process in their mind. That’s why we’re going to use their forms
and have their policy and basis for how much they will pay you based upon the marketing
activity that they’re receiving and the exposure that they’re getting to the public. But having that conversation on, sometimes
you have to actually enlighten the person you’re talking to, especially at the loan
officer level, to even understand how that works and why that their own branch manager
might be willing to entertain this deal because they’re going to make money and it’s okay
to have a conversation about making money. Again, I am not your attorney, so please go
see a local attorney if you have any concerns about that or lean heavily on the lenders
to watch their own compliance and your compliance through their own agreements as well too. Okay, so very important thing there. Again, the bigger companies in your area,
typically the ones that are very familiar like with this, you know, we all know Zillow
is a, is a big online lead source for many people and and and a rather expensive one,
but you’ll see they are actually set up to have a preferred vendor and a preferred lender
with each account for this very reason. In fact, if you want to see who the big players
are in the game, all you have to do is go to a listing on Zillow and start scrolling
down to the bottom of the listing and you’ll see a preferred vendor down there. And when you see that preferred vendor and
see which company they work for, you’ll see these guys are contributing towards marketing
costs sometimes directly with Zillow, which makes it really easy. Zillow makes the money go from the lender
right to the marketing because generally speaking, these companies can contribute towards marketing
costs. That’s not a problem. And if you take yourself out of the mix and
have them pay a company like Zillow directly, wow, that makes it even cleaner and Zillow
does that C but you can also use it as a tool to spot which companies are contributing and
then you can go approach those guys cause they realize there is a high return on investment
on that. And they do realize that it takes money to
make money. The bigger companies will actually spend the
marketing dollars to get a very good return on investment relative to most businesses
out there. And then it’s just a matter of you picking
up the phone and giving that lender a call and saying, Hey, I’m, you know, you’re looking
for people that, you know, businesses that are growth minded, they want to grow. They’re not just only watching expenses, they’re
looking at the net income off their investments. So you become an investment more than just
a cost. Um, so reaching out to them and just letting
them know that they, you noticed they had a co-marketing agreement with a particular
agent and you wanted to reach out and see if they would be willing to invest in your
business. And you know, you might be helpful to show
them some stats about your business, to explain to them exactly what it is. You know, how much production you’re generating,
how many leads you’re getting to show where you’re planning on going. If you do have a lot of leads, if you do have
a lot of business, if you do have a lot of listings, whatever makes you you, you’re going
to need to sell them on your vision. So they see that you are going where you’re
going. Then show them, and again, this is, you know,
we could maybe do this one year at a time so we can circle back and make sure that you’re
getting enough business and exposure from this to make it worth your while. Um, and you are going to have to try to get
them business, you know, they’re, they’re going to have to see that, that their marketing
activities work, uh, or it’s not a fair win-win both ways, but you’ll usually find you can
do that very, very easily. So very important. Now there’s a lot of other things we can add
through this referral network to if you really want to highlight this system and grow the
system even further. And a great way to do that is to kind of create
a referral partnership with them whereby we start to actually market them to our clients
as well. If you give out gift baskets, if you don’t,
this is a great reason to give out gift baskets, right? Because you can take all your affiliate partners
and hopefully you have a lot of these, right? You have a couple mortgage lenders, you have
an attorney, you have a CPA, you’ve got a title company, you definitely have a home
warranty company in there and you’re actually giving them coupons and discounts on advertisements
all mixed into this, you know, this house warming present to your new clients or your
gift basket to your new clients at the end so they’re getting exposed to it. There’s a lot of like apps, mobile apps out
there that actually have vendor networks in them so that even though the your clients
or prospective clients might be using it to search for homes, there’s also all your preferred
vendors in there. You might have them on our preferred vendor
sheet that you give to every one of your potential clients as well too with your listing packet
or your buyer consultation packet as well. Very important. They can have coupons, rebates for all these
lenders in there a lot too. To show them that that exposure, um, oftentimes
on your agent website you have a client concierge or preferred vendors list page on there with
maybe links to all their vendor websites as well. So these are all ways you can just augment
your a referral partnership system to further support and justify that marketing agreement
back and forth with your vendors as well too. So I hope these are great ideas cause please
do this cause you’re missing out on that learning how to actually have the ROI conversation
and starting to develop this referral network. I actually a very important part of any agent’s
sphere of influence by referral business is to generate that referral network from us. If you want to learn more about how some of
those specific tech techniques work, like building a referral partnerships, how we can
set up a preferred vendors list, how to contact them, how to initiate those conversations. Go to our training website, the real estate
trainer.com and use the little search bar and type in some of these keywords and you’ll
see lots of preferred vendor lists. You can use scripts and dialogues. You can use all these different tips, tools,
and different hats you can use to just share with your clients as well too. We give that all away to you as well too. So thanks again for joining in on this and
all of us at Eisenhower coaching, we say thank you and uh, talk to you soon. [inaudible].

1 Comment

  • Reply Icenhower Coaching October 9, 2019 at 12:00 am

    How do you get marketing dollars or help with paying for marketing?

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