Marketing Firms — Any Chance of Ever Hitting Above the Mendoza Line?

First, for those of you now wondering what the heck the Medoza Line is, here’s the short version.

I come from the Mario Mendoza school, not Minnie Mendoza, as Mario was actually a major leaguer for nine years. Anyway, all it refers to is Mendoza’s consistently inept performance at the plate. His career batting average was a miniscule .215 — which included the year that produced The Mendoza Line — 1979 — in which he hit .198. Using sports hyperbole, Greg Swan could hit .198 — and I’m not positive he knows which end of the bat to hold. 🙂

Seth Godin wrote a piece Sunday morning letting the cat out of the bag.

Marketing people worship at the altar of The Mendoza Line.

Quoting Seth:

Marketers have lots of ‘bullets’ and they don’t notice the ones they miss (I usually miss 99.5% of the time online, and more than 99.999% of the time selling books). We just reload and blithely continue on.

Surely, he’s being overly modest — yet, even discounting his humility, he speaks basic truth.

Yep, that’s my experience with marketers. They aspire to the Mendoza Line.

My opinion of most marketing people is about the same as it is for most real estate agents or mortgage brokers — most of them couldn’t find their asses with both hands, a map, two helpers, and a GPS.

Yet, hypocritically, I’m using two of ’em to make my point. Guys like Seth and Richard Riccelli, stick out like sore thumbs because in my opinion, they actually produce results. Go figure.

Let’s pause here to be clear and forthright about my understanding of marketing.

My definition: It’s their job to generate more chances for their client to succeed. Put another way — if their ideas work, the agent/client finds himself in front of far more prospects. In baseball-ese, those are at-bats. The agent who gets 20 more opportunities a month, and hits at The Mendoza Line, makes a ton more money each year.

That’s how I define marketing.

Let’s quantify those additional 20 opportunities in today’s terms. If your market’s median home price is $200,000 and you’re ‘batting average’ on those 20 extra monthly at-bats is .200 (20% conversion rate), here’s what would happen. Your income would, as a direct result of effective marketing, increase by $288,000 annually. (3% listing-side commission)

It’s all about the at-bats. If you’re a better ‘hitter’ and bat .300, converting 30% of the 20 extra monthly prospects, your yearly income rises by $432,000. Modify the number of increased opportunities, and/or the batting average. It still results in an easily quantifiable income increase for the agent/client.

Either way, the marketer did their job — you came to the plate an additional 240 times in a ‘season’.

Confession — I’m just arriving at the level of marketing knowledge which gives birth to real danger. Branding, niches, targeting, and the rest — have all been explained to me by some pretty savvy marketing people.

Results? I refer you back to Seth’s statement. Dismissing his hyperbolic statement, let’s say they’re right 2 of 10 tries. Measurably right — not kinda sorta, don’t ya see, right. This means they’re getting paid very well, at least in my experience, for consistently being on the wrong end of the 80/20 rule.

They must be far more effective at marketing themselves, cuz we keep paying ’em to fail miserably. 🙂

I’ve used marketing firms since 1987.

One idea generated from a marketing firm, in all those years has worked.

Very narrowly targeted direct mail, which was designed to clearly show I actually knew what I was talking about. In the nearly two decades it was used, it was consistently and, best of all, predictably successful. Sometimes phenomenally so. What’s phenomenal? A letter sent to only 3,000 recipients, resulting in over six figures of income — direct cause and effect. That happened three times. Our average effort, sent to 1,500-2,500 recipients, usually produced income of $25-60,000.

In the period 1987-2004 — only two letters produced no bankable results. One was an experiment in stoopid. The other just failed, and to this day we haven’t a clue as to why.

Now? We’ve abandoned this approach. The last two mailings, (Late 2004 and early 2005) to about 16,000 recipients each, resulted in one client from the first, and not even a phone call from the second. Times and circumstances change.

Our marketing people at the time, told us it was at least partly, if not totally due to the new ‘no call’ law. Their theory, which makes as much sense as any of the other dozen reasons I’ve heard, is more agents now use direct mail, cuz they can’t make calling work as before. Our letters were now getting lost in the din — kinda like having 10 agents knocking on your front door at once.

Fair enough — things change — businesses must adjust to those changes.

In the last three plus years, and this is embarrassing to admit, we’ve paid out well over six figures for marketing — exclusive of the marketing itself. Just for them to answer our phone calls. (More hyperbole, but you get the picture.)

I’ve keenly observed my colleagues and their various approaches. Their experiences seem to be similar, except they apparently haven’t been supporting any marketers. Like me, 80-100% of their tangible — read closed business, readily visible in the company bank account — has come from their marketing ideas, not marketing pros.

Same with us.

Somebody please tell me this: What marketing firm has anyone used, resulting in easily attributable increases in income? Income that dwarfs the cost of the marketing itself? Do you know of one? I don’t.

We all know they exist. They’re out there. I’ve just never met one, had a phone conversation with one, or heard first hand from another agent about one.

If my firm, or any real estate company for that matter, had the performance record most real estate marketing firms sport, (performance here = results) I’d have been doing something else a long time ago. Results in marketing though, don’t seem to matter. As long as they sound good, regurgitate what we’ve told them, and create what we think is pretty…whatever, they’ve earned their pay.

Hogwash.

Here’s what I’ve consistently experienced.

“So, what have you been doing that’s been successful in the past?” Answer: See above.

“Tell me about the profile of your client.” Answer: The same as it’s been since I switched from selling homes. Hasn’t changed much since Carter was in office.

“Have you implemented a drip marketing campaign?” Answer: No, but maybe soon. What do I have to lose?

“Do you currently…blah blah blah.”

At some point they wanna talk about a monthly retainer, or however else they’re to be paid — none of it, of course, tied to actual results. I’m paid for results. In fact, that’s misleading. I’m never paid sans results. However, they’re either insulted by the mere thought, or decide IF their ideas succeed, they wanna piece of my action.

Yeah, and the Kansas City Royals agreed to pay Mario Mendoza a percentage of their profits whenever he accidentally hit a homer. Give me a freakin’ break.

This isn’t a blanket indictment of the marketing industry. I get it — it’s not a science. I contend however, it’s more of a science than an art. Art is subjective, and has value as part of the whole marketing equation. You either know what you’re doing, or you don’t. You either consistently produce tangible results or you don’t.

There’s no need for beating a dead horse here, but blogging is the quintessential real estate example. Wanna know why less than 1% of agents blog? Cuz it doesn’t work for them — duh. Marketers are taking their money right and left though, you can take that to the bank. (pun intended) If most real estate agent bloggers were even doing even one extra deal a month, 20% of agents everywhere would be clogging WordPress tomorrow — minimum.

You know I’m right. Blogging though is just the easiest example.

Everything that’s worked for my company in the last several years has come from either my son, or me and my pea brain. When I say worked, I mean the results put a smile on Mrs. Brown’s pretty face. Since I brought her up, I’ll caution you — strongly. Don’t ever bring up marketing or marketers in her presence. She thinks they’re all worthless — which, of course, I think is unfair, and untrue. She also owns her own company, and has for over 20 years. In fact, she just opened up her third business, a retail store. I can’t write her opinion of marketers on these pages. 🙂

I’m writing this as a result of two posts actually.

Richard Riccelli wrote “Is That Your Father?” After I read it, I immediately understood Greg’s consistent praise for Richard. He’s obviously no Mario Mendoza, but rather, a George Brett. You can tell, cuz he charges an arm and a leg — and gets it from firms who could buy & sell my puny company before their morning coffee break — and remain blissfully unaware of it unless their CFO informed them. 🙂 Translation? Richard produces results. So did George Brett — ‘you could look it up’ as Yogi used to say.

Same apparently goes for Seth Godin. Strangers don’t collectively give you tons of bank because you’re a putz. You’ve not only been there, but done that — big time. I get it. Seth produces too.

Those two, and legions like them, are not the marketers of whom I speak.

No, those marketers want to get paid for work which is more than likely not only ineffective, but just a waste of time and money. If they hit on something which succeeds wildly, they want a piece of your action, in return for their brilliance. A blind squirrel finally finds an acorn, and demands a million bucks for it. Yeah, that’s the ticket. 🙂

Let’s translate that approach to investment real estate.

It’s 1977 and I’ve advised you to invest in Canton, Ohio income property. Oops, you’re not happy, but at least I was paid.

OR

It’s 1977 and instead of Canton, I advise you to put your investment capital into San Diego property. You make gazillions — and I want a piece cuz, well, I just want a piece. Give me a slice of that golden pie big boy. It was my idea ya know.

Works for me. 🙂 Investors — does that work for you? Don’t answer — it’s a rhetorical question. (And, by the way, I spelled rhetorical right the first try.)

That’s a marketer. Now before marketers hit speed dial for their favorite assassin, I realize there are times when it’s perfectly appropriate to take a piece of the action. It’s my contention however, it should be because their client can’t afford them, and/or other very obvious and exceptional circumstances.

Those circumstances do not include the normal marketer/RE agent-as-client relationship 99.999% of the time, as Seth might say.

Yet, I’ve been approached by marketing firms, after we developed a working relationship, not once, but twice, asking for a piece of my pie.

Both firms no longer exist. Go figure.

The Million Dollar question remains.

Is there a marketer out there who will charge what they’re worth, be effective more times than not, take their pay, and go on to the next project?

If yer hangin’ around, hidin’ somewhere, there’s literally more real estate business out there than you could handle in the next decade. Of course, if you are out there, you’re more rare than a Mario Mendoza home run. 🙂