Welcome to the crash course on identifying your real estate target market! With this first step, you’re well on your way to filling your pipeline with more leads on a more consistent basis.
When it comes to marketing best practices, the real estate industry is very similar to all other businesses: To sell your product (homes) and services (your ability to sell properties), you must know your customer.
If you don’t know who you’re targeting, you’ll end up promoting your real estate business to everyone. And when that happens, you’ll have a very unfocused marketing “strategy” that fails to resonate with anyone. It’s not even possible to cater to everyone’s needs and interests effectively anyway.
Following the basic tips and strategies in this article instead will save you time, money, and energy. So let’s get started.
Define Your Real Estate Target Market
There are a couple different ways to approach this. And some agents do both.
Method #1: Farming
Basically, this means you target a certain part of town, a set of specific neighborhoods, a township, or even a (very rural) county.
If you go this route, it’s best to think small. Establish yourself in a sub-area of your local market which has 500 homes or less.
We’re not going to get into the details here, since this is a quick crash course. To learn more, use the best step-by-step guide to real estate farming.
Method #2: Specialize in a Particular Niche
Depending on your background, interests, and local housing market, it might make the most sense to get even more specific and go after one or more kinds of real estate consumers.
For example, you could target niched segments such as first-time homebuyers, veterans, a particular demographic (e.e., age range or life stage), motivated sellers, or home investors.
Go Deeper: Research Your Target Market
Research is essential. You can never know too much about the real estate market or the consumers in your area. The more you know, the better you can tailor your services and marketing efforts to meet your potential clients’ specific needs.
What To Research
- Demographics: Understand the age, income levels, and occupations of the population in your target area. This will help you tailor your marketing approach.
- Market Trends: Analyze current and past market trends. Are property values increasing or decreasing? What’s the average time a property stays on the market?
- Competitor Analysis: Know who your competitors are in the chosen market. What are they doing successfully, and where might they be falling short?
- Local Amenities and Infrastructure: Highlight key features of the neighborhood, such as schools, parks, public transportation, and any upcoming developments.
- Consumer Behavior: Understand the needs and preferences of your target audience. What are they looking for in a property? What influences their buying decisions?
- Legal and Regulatory Factors: Be aware of any local zoning laws, property taxes, or other regulations that might affect real estate transactions.
- Economic Indicators: Keep an eye on economic indicators like employment rates and job growth. A thriving local economy often translates to a healthier real estate market.
How To Research
Here are some sources and methods for gathering data.
Your Website: If you don’t have one already, get a customizable website that allows you to collect and analyze data about your users and their activity on your site.
MLSs (Multiple Listing Services): Dive into MLS databases to gather detailed information on current and past property listings, including sale prices and market trends.
Social Media: Most social media platforms have built-in data-gathering functionality. Learn about who follows you. And pay attention to local-specific profiles so you can learn more about the locals’ needs and perspectives when it comes to real estate.
Local Real Estate Reports: Check reports from local real estate associations for market trends, property values, and other relevant data.
Government Databases: Access government databases for information on demographics, zoning regulations, and property records.
Online Surveys: Create online surveys or questionnaires to gather insights directly from your target audience. Tools like Google Forms can be helpful.
Networking Events: Attend local events, seminars, and networking gatherings to connect with other real estate professionals and gain insider knowledge.
Collaborate with Local Businesses: Partner with local businesses to get a sense of the community’s needs and preferences.
Customer Interviews: If possible, conduct one-on-one interviews with current residents or potential buyers to understand their perspectives and expectations.
Take the Next Step: Create a Marketing Plan
Top-performing agents know how to develop and implement effective plans for growing their business.
Maybe you’re on your way to “top-performer” status, but you don’t have a great plan for getting more clients and increasing your gross commission income. Or maybe you have a plan, but it’s not working.
Either way, now that you’ve identified your real estate target market, now’s a good time to create a plan for how you’ll generate leads for this year and for years to come. Get a quick rundown of what’s involved in creating an effective real estate marketing plan.
Measure Your Progress
There are numerous ways to measure how successful you are at creating a target market. For example, if you’re doing it the right way, you’ll see at least some of the following indicators…
- An increase in website traffic.
- A higher click-through rate from social media networks to your website.
- A larger client base.
- Brand awareness throughout your region.
- Closing more homes or adding more listings.
Your goal doesn’t need to be as large as doubling your revenue in a year. Some real estate agents are happy with simply having a satisfied clientele.
“The satisfaction of my clients is how I keep score because it drives market share. Real estate is a referral-based business, and if my clients are happy, they will refer me more business. My market share grows as an extension of me keeping my clients happy, which feels good,” says Jon Sterling. It’s like the old adage, “If you build it, they will come.”
Building a focused marketing campaign that is tailor-made for your target market will help you increase revenue. It may sound counterintuitive, but focusing your marketing efforts on a narrower audience can actually lead to serious improvements in terms of conversion rates (turning leads into clients) and maximizing your transaction volume.
By becoming an expert in your area or in a specific market segment, you can differentiate yourself from your competition and attract clients seeking specialized knowledge and services.
If you’ve found that your target market is too small, all is not lost. You may find that there are complementary audiences that can benefit from your expertise. For example, if you’re selling loft properties, you may be able to widen your audience to also target condo or apartment buyers. Be flexible, but don’t overextend your brand to accommodate too large of a client pool.
Congratulations! You’re ready to take the next step toward building a business that grows regardless of any market shift!