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 Selling Advertisements in Pre-Listing Kits
By: Darin "Sid" Cameron, CRS
Sat, Sep 1st, 2007 12:54 pm

Talking to an agent who is trying to get creative.

The agent mails out a lot of prelisting kits, and the cost of printing and mailing is killing her.  Part of her kit includes lists of recommended vendors- like a list of three lenders, three title companies, etc that she recommends working with.

Her solution to offset her expenses is to sell that space as advertisements to those vendors (like $50/year).  She’s even considering expanding what she does to sell advertisements to other local businesses as well (restaurants, retail, etc).

Here was my advice...

It's not a bad idea and I've actually seen several brokerages that do things just like this, but having sold advertising in a previous life here are a couple of objections you might run into:

- VALUE- What's in it for them?  Some people will just give you the money because you have such a great relationship, but Title Company and Lender reps get agents wanting co-marketing money DAILY.  More than likely your rep's business is down right now and they're under pressure to produce or be fired (and right now might be the worst possible time for them to ask for management approval of new marketing money).  So ask yourself, how will this new expense impact their bottom line and help them grow their business? (especially if it's not giving them any new exposure).

Also, what happens when you recommend multiple lenders and one pays but the others don't?  Will you still give them equal space for free?  Will the first lender get better, larger or exclusive placement?  Or will you replace the partners with new lenders who agree to pay?  How will it impact your relationship with a partner if they find out they are paying you for ad space and the other guys aren't?  Will the guy who pays you expect more loyalty from you?

- TIME- Hitting up your partners and friends is easy.  If that's all you plan to do then it's no big deal.  However hitting up other businesses- like local restaurants, etc- means actually becoming an advertising sales person and competing for marketing dollars against other advertising sales people.  Is the $50 worth your time to make "sales calls" on businesses, create sample ads, meet with clients a 2nd or 3rd time for ad approval, deal with business owners who want feedback on when and how the ads go out or request ad changes over time, pay for your additional printing expenses (because you will probably have to give them sample kits), etc?

- VOLUME- Not sure how many kits you send out- but in the grand scheme of advertising you’re probably pretty small.  So when you mention getting restaurants, are you really touching enough customers to impact the bottom line of a local business- especially if it's a customer who's MOVING AWAY because restaurant's, for example, want new repeat customers (i.e. your buyers).

With that said, $50/year is probably a deal to a POD's (Portable On Demand Storage) distributor, moving company, carpet cleaning company, new carpet installer, handyman, etc because home sellers are target customers to those businesses.

Another thing you can also do is broaden your approach and say the advertising will also be in the welcome kit or concierge service for new buyers and existing customers.  You could also bundle it with your postcards to your sphere.  We have an agent locally who sends out coupons to subdivisions for free pizzas, etc from local restaurants.

- LIABILITY- My title company rep used to run a concierge department for a local franchise and had dozens of horror stories of agents who were sued by clients because of referrals to vendors gone bad.

Bottom line, the client has hired you to look after their best interest.  When things go wrong with vendors, lawyers usually ask the clients how they found them.  Taking advertisement money, although not illegal, muddies that water because of your legal contract with the client (unless you've made it clear in the ad that they are in fact "paid advertisements" and not endorsements).  My advice, speak to your broker or association's lawyer before you start selling ads.  When it comes to the title companies and lenders of the world, also check to make sure you’re RSPA compliant.

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Darin "Sid" Cameron spent 15 years working in tech sales which in 1998 relocated him to St. Louis. In 2004 he took over web development tasks for Kimberly's real estate team and later became the full-time Marketing and Operations Director. In 2011, he launched two brokerages, The Realty Store, Inc. and Realty Referral Partners, Inc. Sid holds a real estate broker's license in Missouri, CRS certification and was the first CyberStar in the St. Louis area.
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