The Four P’s of Marketing
There is a model of marketing that will help put the various pieces of the marketing puzzle into the appropriate context for your industry. For the purposes of this post, however, the model discussed will be modified to apply to real estate. This model is called the four Ps of marketing. Quite simply, the four Ps formula is a model that’s used to craft a well-developed marketing section of a business plan. Some may believe that the four Ps formula does not apply to real estate, but it can. So, in a twist, I’d like to alter the four Ps formula so that it applies more to real estate. I’d like to introduce the SPLP formula!
S = Service
Normally, in the standard four Ps model, Product would go here. But since the real estate industry already has their product esablished (homes, land, etc.) you don’t need much to budget for research and development purposes. No, the primary thing that you are selling in real estate is your service to find, buy, or sell homes for your clients! Not the homes themselves. The homes themselves are the product being sold by your service, but you still must primarily convince people that you’re the agent that will help them the best out of everyone else.
This first letter takes into account the service that you offer, e.g. a fiduciary agent acting on your clients’ behalf. As a real estate agent or Realtor(R), it’s the duty of the public servant to provide a service that allows potential clients to make decisions with as much information as possible. The fee you get in exchange for this service is your commission. So, how can you market this important aspect of your business plan differently? Simple solutions with immediate measurable benefits include adding a newsletter to your site if you don’t already have one, providing a relocation package, or even providing additional services. Services could even include a free web site featuring your client’s property in exchange for their decision to use you as an agent.
P = Pricing
With any product or service, pricing is extremely important. If you price your product too high, you won’t sell enough units to break even on your investment. If you price your product too low, it’s not going to sell well either. The low price will alienate those connosieurs that are looking for something with higher quality. Remember, quality of service is incredibly important. If you provide better service, you can charge a higher price because the better service differentiates yourself from your competition with lower quality service. If you can strike a balance between price, value, and perceived value it will make the difference in how the service sells. It’s all about striking a balance utilizing that magical combo of supply and demand.
P = Placement (distribution). For real estate: L = Location
Placement is pretty important. When it comes to real estate, you might know this better as location. Get to know your market like the back of your hand so that you can come up with an excellent price for the location of the property. Location + price can make or break a sale, so be sure to get both of these elements of your marketing plan right.
P = Promotion
Now it’s time to discuss the final piece of the puzzle: promotion. Without a way to reach the potential clients within your target market, there’s no way that you’re going to make enough sales to make a decent profit. Promotion begins with a plan. This part of the plan should be developed in the very beginning as one of the first steps to crafting a well-written business plan. How are you going to reach the target market of your product? Who are the competitors and what kinds of promotion are they doing? The answers to these questions should help you start out with information to craft a decent promotional plan.
Typically, promotion consists of advertising efforts that are designed to increase public awareness about a product or service. These efforts can be anything from online search engine optimization to offline marketing. The important thing is that you need to develop a solid comprehensive plan that targets the market of buyers that you’re attempting to attract to your product or service. I could go into significant detail about how to launch an effective promotion plan, and I’ll probably be writing a post about that later.
Remember the four Ps of marketing. They will help you greatly when it comes to marketing your product or service.