Marketing is a key component to success in real estate. I hate stating the obvious, but if you don’t start with it, one can hardly understand the reality of the impact that the cost of marketing has on the adoption and utilization of marketing plans by various segments of real estate professionals.
Franchise giant RE/MAX announced an agreement with Imprev for marketing solutions. You can see the program in the video below. In the past, the fee for access to these marketing tools was $299 per year. For the sake of argument, lets presume that the pricing is fair. Judging from our appraisal, it would be a fair price at $1000 per year. That is where the price barrier comes in. RE/MAX just launched the Imprev program for free – no cost to the agent. Here is why.
Top producing agents do not blink at $299. That is the cost of dinner for two and a bottle of wine at a nice restaurant. Agents who do transactions every month or two are always marketing and they use the tools provided by the franchise and broker and flourish other marketing plans over the top as their secret sauce. This is the top 20% of agents in real estate.
The middle 60% of agents in real estate do somewhere between 3 and 10 transactions a year. This is a mixed bucket. Some use the marketing programs and some don’t. In truth, it depends on the economic vitality of the household at the time when the marketing investment is demanded. Some of these agents will make the investment. Others will hold off and hope for the best. Still others will totally ignore it and not do any marketing that is not free.
The bottom 20% of agents is the worst group at adoption of marketing solutions. They are broke, or only do real estate part time. They do between 0 and 3 transactions per year.
So, why did RE/MAX go with free marketing? Because, marketing works and it works every time. It is good for the brand, good for the agent, good for the broker, and amazing for the consumer. RE/MAX is raising the bar. In truth, they are matching programs offered today by other franchise brands too. It keeps them competitive. The philosophy of RE/MAX has always been to keep costs low and commissions high. This fits, even if it burdens profits from franchise fees.
Check out the video RE/MAX did for the announcement that explains the program.