Why do Estate Agents Cut Their Marketing Budgets First In Times of Crisis?

When challenged with a housing downturn, Estate Agents will often be attracted to cut their marketing budgets as they hope it will help them stay afloat.

Yet, this is a fallacy as research has always shown that stopping ongoing marketing activities may be short-sighted and an ill-judged effort.

Studies have shown that companies that continue their marketing activities during a hard patch are more likely to both survive and ultimately be in a better position to be on top after the recession.

Obviously, if every agent is cutting their marketing budgets, there is less competition on social media and other platforms for ‘share of voice’.

This offers an opportunity for other Estate Agents to jump in and increase their market share.

Research by an American firm (McGraw and Hill) showed that in the early 80s global recession, those businesses that were forceful about building their company brand through advertising, grew 275% more than those who didn’t.

The same happened with Kellogg’s in the 1930s. Back then they were only no.2 on their market share, yet because of how they behaved during the 1930s depressiin, they are the of cereals worldwide.

Before the 1930s era, Kellogg’s were in a battle with rival cereal manufacturer Post. Each of the cereal companies were seeking ways to become as the #1 global market leader.

When the depression hit, Post cereals chose to stop all their marketing.

Yet, Kellogg’s made the wise move of sensitively and smartly carrying on with their marketing plans. Now look at them!

So, why do marketing budgets always get cut first with Estate Agents?

Well it’s just not Estate Agents that do that.

When any business needs to make reductions to weather an economic downtown, in most businesses, their marketing budgets are nearly always number one on the list.

I mean, spending one’s cash on marketing can seem a paradox when people are spending less of their money buying stuff. Put like that, huge marketing budgets could be seen as difficult to defend – even for the largest of any business.

Yet no matter how logical it might seem at first glance, is it always the best thing to make marketing budgetary cut?

Your turnover is going to take a hit next year, and so your 2023 P&L planning will probably include cuts in your marketing budget.

Yet think on this: study after study have always shown that any business who market themselves more during tough times are the businesses that not only survive, yet thrive and go out of the downturn in a stronger position.

Why? Because there is less competition.

Yes there are fewer people moving home - yet if you aren’t marketing yourself - how the hell do you expect to attract the home sellers that do want to move to your agency?

As some estate agents reduce their marketing budgets, other agents will jump in and make a name in their town for themselves, without having to spend loads of cash.

This makes a remarkable opportunity to optimise your estate agency marketing strategy and pull new vendors away from your competitor agents (who aren’t marketing)

Yet what if you do have to cut the budget as you can’t cut a portal or lighten the wages bill?

Well here is the killer bit of the post…

You can reduce your marketing budget and still get more listings and higher fees

Use this time in Oct & Nov as an opportunity to look at all your marketing.

Homeowners will be attracted to the agents that give them the answers that keep them up at night.

Homeowners will be attracted to agents that seem to know what they are talking about

Homeowners will be attracted to agents that have empathy to their issues in life

Waving your around saying you have just sold another house isn’t going to cut the mustard in 2023 ( sorry but most of you do this and it’s just your ego wanting massaging )

But by doing the things I suggest above , it will increase listings by building brand value and connecting with homeowners in a different, more authentic way.

And here is the weird part - you can do all that without spending any money

So, do you really need to be all the portals you are on?

Do you really need the full bells and whistle lasers and glitter balls optimiser package with your portal?

If your lease is finishing soon? Do you need to be on the high street?

Take a look at your colleagues- would you employ them again now you know what you know now?

Take another look at your colleagues, which ones would you be grateful to go if they handed in their notice?

Only after those can you look at your marketing

You could be on all the portals, on their full-fat glitter ball package, fully staffed and on the High Street - yet if you cut your marketing- how the hell are you going to attract homeowners?

If you are thinking, Watkin you are making sense but don’t know how to do it .. If you would like to receive a 53 part step-by-step video guide (with no course or you need to sign up for something) - don’t like the post, hit the button and I will DM the videos free of charge

If you are thinking I am talking , tell me on the comments

Kind regards

Christopher