5 Forces Against Real Estate Brokers

Every brokerage has a fundamental challenge: you want to grow your profits. What are the obstacles to overcome to dominate your market and increase your revenue and profit? 

One of the biggest threats to a real estate broker – new or established – is competition. Who is your competition? How are their actions in the marketplace going to affect your current bottom line and future planning? 

To answer those questions, you must analyze and understand your competition. One way to do that is by using Porter's Five Forces model to break them down into five distinct categories. 

Below are the five forces you are currently losing profit to: 

1. Rivals: your direct competition 

As most real estate brokers, the first person you're losing profit to is rival companies - companies and brokers that do what you do and compete with you directly. You know who they are. How do you prevent an owner from listing his property with another brokerage, how can you reach out to a qualified active buyer before your competition does? How can you make sure that one of your past clients will reach out to you if/when they go back on the market? When rivalry competition is high, advertising and price wars can ensue, which can hurt a business's bottom line. 

2. Sellers/Buyer bargaining power: 

The third thing that you're losing to is consumer bargaining power: powerful customers. Powerful owners and buyers always negotiate to lower your commissions; they ask for more value, increasing your cost. Both of those reduce your profit. Profit equals price minus cost. Your commission always gets squeezed. How can you prevent it? 

3. Threat of new entrants: your new competition 

There is a constant flow of new agents and new real estate brokerage companies using better and smart technology and with great inventory. How do you stay competitive? The easier it is for a competitor to join the marketplace, the higher the risk of a business's market share being depleted. 

4. Powerful supplier and their bargaining power 

The fourth thing is a powerful supplier: supplier bargaining power. There are a lot of different types of suppliers; we're going to talk about your marketing suppliers; companies like Google and Facebook that you typically use for your PPC and online advertising. If they change their terms or increase their cost, raise their prices, they're going to grow your cost, and therefore, lower your profit. How do you protect yourself against it? 

5. Substitutes 

How easy it is for customers to switch from your service to that of a competitor or companies that do something similar, close enough that they could be considered a solution. For sale by owner, individuals not using brokers, property management companies. 

Those are the five forces that you compete against you for profits. Do you have a strategy to beat the five forces and to grow your profit? 

If you're interested in a strategy that can deliver against all five of those, while bringing on new clients in an affordable acquisition cost, you have to look into a different type of strategy to expand your competitive advantage. To that end, Brandora uses data-driven insight technology to help brokers market solely to prospects who are ready to buy now (active buyers) or looking to sell their property (real sellers). 

Brandora eliminates wasteful ad spend, drives down the cost per client acquisition and increases real estate brokers’ profits. 

Related Article: If you are interested in finding out how to grow your profit and how to beat these five forces, click here.

5 Real Estate Marketing Ideas The Pros Use

5 Real Estate Marketing Ideas The Pros Use

There is no “one size fits all” in marketing. Marketing depends on your goals. Whether you are a commercial broker selling office buildings or a residential agent renting luxury penthouses, the way you want to be perceived by your clientele will vary. Your tone, your style, and your content need to be relevant to your target audience. Below are the essential marketing tools we believe a real estate agent/broker should have.

1. Real Estate Website: Brand yourself as a marketing machine

Brand yourself. Let clients find you online. Not only will it help you look professional, but it also shows your marketing capabilities. If you know how to brand yourself, it means you know how to market your listings as well. You can also showcase your recent closings and show your personality. Your website is your online resume. It is easy to put in place and is one of the first things I would do as a real estate professional.

2. LinkedIn Account: Rank on the first page of Google

LinkedIn is an incredibly powerful SEO tool and a great professional social media platform. Translation: You will pop up first on Google search via LinkedIn and look like a pro. It is a free resource that I find is often underutilized by agents. If you’re not much of a writer, hire someone to do it for you. A nice biography with all your credentials can only make you look more legit.

3. Email Newsletter: Stay in their minds; get referrals

Again, you don’t have to do it yourself. Newsletters are time-consuming, and you want to send relevant content to your audience. Hire someone to do it for you: Pick some topics, the frequency, and a design-and-feel for your email blasts, and that’s it. To do an excellent newsletter, you need to know your clients well. What do they want to read about? Newsletters are great for staying at the top of their minds. Consistency is king. It’s better to pick a lower frequency with quality content than to annoy with weekly emails having “meh” content.

4. Blog: Brand yourself as an authority

Whether you are in residential or commercial, you will want to appear as an authority in your field. Not only can your blog help you with search optimization, but it will also brand you as an expert. And we know that real estate is all about trust (and referrals!). Once again, you don’t have to do it yourself; hire someone to manage your blog for you.

5. Headshot: Professional photograph

Yes, it should be common sense, but it still looks as though it is not. I am amazed to see what the brokers I am working with are using: outdated headshots taken in the 90s or selfies taken with their iPhones. I think the worst is old photos: When you meet your real estate agent and discover that he/she is ten years older than the picture he/she has online, it’s just plain deceiving. Be genuine, and show your true colors!

Overall, if you’re not going to keep up with your marketing platforms and just keep a ghost blog, for instance, or send inconsistent newsletters once in a while, don’t do it. Marketing is all about frequency and consistency. Sometimes, less is better. Also, remember that you don’t have to do it yourself; you have plenty of resources to assist you with your marketing. Focus on closing deals, and let professional marketers handle your brand.