Remember learning about the power of compound interest in your high school economics class? I do. I can still see my teacher displaying charts of money’s growth over time when interest was compounded from period-to-period. Here are two definitions for “compound”:
intensify: make more intense, stronger, or more marked
put or add together; “combine resources”
Compound interest is a powerful saving strategy because your savings intensify over time. This happens because you earn interest on the money you originally saved and then you earn interest on the interest previously earned. With each passing compounding period, your savings earn more and more interest.
The very same thing can happen over time with your marketing. There are three basic ways this can be accomplished in your business:
1. As you sell homes and earn commissions, you increase the amount of money invested into marketing. This compounding increases each year as does your sales.
To engineer this in your business, you must set a specific percentage of your commissions to save and allocate to marketing. In addition, you must have the discipline to increase this set percentage each year. From my observation, this compounding doesn’t actually occur for most agents. This is because most agents have a tendency to spend every penny they make. They don’t develop the discipline to save or re-invest a fixed percentage of their commissions.
2. Consistently testing new lead generation advertisements and lead conversion systems in your business.
In No. 1 above your goal should be to increase the amount of money you commit to marketing. The goal is to put te additional marketing dollars you spend toward testing new ads and campaigns. Good marketing is really about testing. You must test consistently and constantly. A single new ad that ends up being a winner can be the difference in selling many more homes. I saw it happen in my business, and it was because I tested weekly.
3. By creating marketing pieces that have the ability to go viral.
A viral marketing piece is one that is spread from person to person. Over time, this marketing grows exponentially, spreading from prospect to prospect without any additional investment on your part. Examples of viral marketing might be a book you wrote, a video you produced, a free report you put together or an audio recording. The key here is to make your piece very compelling. The content should be so good that people want others to get the same information.
I used this kind of viral marketing strategy by offering a book I wrote as an eBook and giving each person who requested it the right to give the book away. Slowly but surely, we started hearing from people interested in our services who hadn’t responded to any of our advertisements. When we met with them, they would explain that a friend had passed on the book to them. This is compound marketing at its finest.
Take a second and think about how big compound marketing like that could be for your business over time. It ratchets up your marketing on its own, over days, weeks, months. It brings you more leads, more sales and higher profits as it grows.
Trouble is, many real estate agents don’t take the time to think about compound marketing. They are inconsistent with their marketing, which to them is the burden they reluctantly get around to when they get a break from being busy with everything else.
Here are a few steps you might take to compound your marketing:
1. Make your thinking about marketing long-term, not short-term
2.Make marketing THE priority for your business
3. Devote a set part of each commission check to future marketing
4. Increase the amount of commission you re-invest in marketing as your income grows
5. Constantly test new ads for lead generation
6. Always be testing new lead conversion approaches
7. Create a marketing piece that could go viral and encourage everyone to give it away
Take these steps to compounding your marketing, and you will see it pay off!
Related posts:
- How real estate agents can use the news in marketing
- Real Estate Postcard Marketing Tip: Use Both Emotional and Rational Marketing Techniques
- How Real Estate Agents Can Reinvent Their Businesses
- Real Estate Postcard Marketing Success Tip: Compelling Communication is Personable Not Perfect
- Interesting time management strategy for real estate agents
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