Buying A Home In A Sellers Market

Thanks in large part to our current pandemic situation, there is a broad flight from living in urban areas to suburban and rural areas.  This has led to an increased demand for single family homes, exacerbated further by a decrease in housing supply as homeowners, leary to allow strangers in their homes, are reluctant to list their homes.  The end result is a sellers market; some may say a severe sellers market. 

All of this begs the question, how does a home buyer acquire a home (or homes) without simply succumbing to the sellers price?  Fortunately, there are a few things that one might do, some “tricks” you might say, to make the most of what some might say is a less than advantageous negotiating position. 

  1. Align with a realtor from the best broker.
    As I’ve mentioned before, realtors wield immense power and influence.  One such power, in some areas, is the pocket listing.  By aligning with the best broker (as measured by the number of open and closed listing in the area where you’re looking to buy a home), you give yourself access to the greatest pool of pocket listings.  

    Pocket listings are a home listing that hasn’t hit the Multiple Listing Service (the “MLS”), the public listing of homes for sale. 

    In a seller’s market, having access to homes before they become openly available to the general public can be a tremendous advantage.  And aligning with the best broker is your ticket to that offering.
  2. Join forces with the selling agent.
    In a traditional sale, the buyer and the seller’s real estate agent share the commission.   When a seller’s real estate agent bring a buyer, that agent potentially doubles their commission.

    By aligning with the seller’s real estate agent and having them represent you in the purchase, you instantly make your offer more attractive to someone who might arguably be the most influential person in any real estate transaction … the seller’s real estate agent.
     
  3. Be open to being the back up offer.
    A real estate deal isn’t finalized until escrow closes.  And the journey between an accepted offer and the close of escrow is fraught with potential pitfalls.  In a seller’s market, being a backup offer is almost as powerful as being the primary offer. 
  4. Take on someone else’s problem.
    Some of my most successful real estate deals have been when I’ve was willing to take on a problem that the seller didn’t want to address.  Deals like this have an added benefit of discouraging potential competitors from creating a price war. 

  5. Be patient.
    Most importantly, be patient.  Clearly identify all of your criteria, and wait until they are met.  Once met, be ready to strike with determination and conviction.  Have your financing secured, and be prepared to utilize it.  No one ever made money by chasing the wrong deal. 

The Value of Data & Insights

The saying that knowledge is power has never been more true than it is today. Today, brands can collect (in a privacy compliant manner) a tremendous amount of information about their existing and prospective customers.

But does “more” data really make a difference? Is quantity more important than quality?

The answer is: it depends.

I’ve been in the data industry for over 10 years. During that time, I’ve learned that data, ethically applied, can be of tremendous value to an organization. I’ve also learned that it is easy to fall prey to the concept that more is better, when in reality sometimes better is better.

While data collection should be vast (after all, it is easier and more cost effective than ever to collect data), data interpretation should be mindful and deliberate. Your process should start collecting as much data as possible, then on a case by case basis utilize that data to answer very specific questions which help improve your organization.

This process sounds much easier than it is. I’ve found it is easiest to start with a basic question, and work backwards through the evaluation process to find your answer. As you work backwards through this process, you’ll be able to stress test a set of assumptions that will ultimately derive an answer based in fact – not assumptions.

Take for example the simple question “who are my best customers?”. First you must decide upon the metric that you’re assigning the term “best”. Is it your longest customer based upon time? The customers that generate the most revenue? The customers that generate the most profit?

With that question answered, you must now determine why you’re trying to answer that question. Do you want to find those customers in other media channels? Are you looking for customers like your best customers? Do you want those customers to spend more than they do today?

As you can imagine, the number of questions can be seemingly endless. It is very easy to slip into a data vortex, where you are paralyze by the sheer amount of data you need to analyze to derive your answer. But if you’re diligent, and thoughtful in your approach, you’ll be able to derive answers that bring exponential value to your organization.

Truth be told, this process is part science and part art. And quite honestly the only way to improve your results is to practice. Build, Test, Repeat. But with time, practice, and careful iterative improvements, you’ll be able to yield results that drive your business beyond the competition.

As a side note, one good resource in your journey is the Google Thinks series. Here is a recent related episode that you might find interesting.

Happy learning!

Scot

Politics – It Is Not What It Seems

Both in my personal life, and in this blog, I try to remain non-political. It seems with all of the people driven to vocalize their opinions on topics that they know little about, that adding my voice to the conversation would do little to bring any clarity to the topic.

With that said, I do have an opinion on one political topic that I feel will be beneficial to some. It’s an opinion not based in fact, but rather solely on observation. I’ll be the first to admit that I my statement is an assumption, and worse yet an assumption that entirely void of any factual evidence. But I believe it as much as anything I know.

Politicians get along more than they’d like for us to believe.

If you compare the levels of angst that politicians from opposite parties hold for each other to the animosity that voters from the same competing parties hold, its no contest. Voters have more distain.

I base this opinion from years of closely observing politicians and the actions of voters. Especially in this election, we hear stories of families and friendships being torn apart simply because of different political views. Mothers who won’t talk to sons. Fathers who threaten to “block” texts from daughters. As voters, we’re often conditioned to look at things in a binary fashion. “You’re either for me, or against me”. This leads to associating politics with an ideology. And this blinding faith only benefits one group of people: politicians.

Comparatively, politicians seem to have learned that while passion wins the race in the short sprint, collaboration wins the marathon. We often hear stories of politicians from different parties getting together for drinks after the election. We see the comradery ex-Presidents share once they’ve left office. It’s as if they know something we don’t know …. that perhaps they don’t want us to know. Simply put – it’s going to be alright.

So as we wrap up a long election evening, and wake with some more answers than we had the night before, let’s not take things more seriously than the politicians who are running for office. After all, that’s what we’re electing them to do!

Home Warranties – Are They Worth It?

For those of you who follow my blog, you know that I’ve recently been questioning my strategy of having an active home warranty policy on each of my (single family) rental properties. 

As you can read here [insert link], I’ve had several challenges with my home warranty service that have caused to me to reassess their value. 

With a little help from an appliance lifecycle guide I received from [insert website name], I created the following tab which calculates , for a given home, whether it is better to have a home warranty or not.    It compares paying for the home warranty vs. maintaining and replacing the appliances on a frequent basis. 

The Cost Of A Home Warranty

A home warranty will typically cost between $500 and $600 per year.  The factors driving this cost include how many homes you have under warranty (you can receive a multi property discount), the price of the call out fee (which ranges from $0 to $150 or more), and the number of claims that you’ve made in the past.  

For the purposes of this calculation, we’ll assume an annual policy at $525.  My leases state that the tenant must pay the per incident call out fee , which is typically about  $125.  

What The Home Warranty Covers

While each policy has its own “exclusions”, the home warranty typically doesn’t cover normal wear and tear (a recent example is an old dryer where the bearings went bad), and has certain allowances which may require you to pay an additional fee.  For example, if your air conditioner requires freon, the home warranty company may only cover a small portion of that cost. 

What Is The Alternative

The alternative is to apply the money that would have been spent on the home warranty to a fund that covers the repair of appliances in the home. 

This would be in addition to any similar allocation you maintain for the general upkeep of the property (roof, exterior walls, landscaping, etc. ). 

Given that savings rates are effectively at zero, I am not calculating any interest that may be earned on that money while it is sitting in the bank account.  Nor am I calculating any potential inflationary pressures on the cost or installation of the major appliances. 

How Do You Calculate This 

I listed all of the major appliances that the home warranty covers in each home.   I took a list of average appliance lifespans, and the average cost for the appliance installed.  I also included any annual maintenance that I might pay for, if I didn’t have a home warranty. 

I then summed the average cost for the appliance with the annual maintenance cost, and then divided that total by the lifespan to come up with an annual number.  These gave me an annualized replacement cost of each appliance, and the summarized annual number for all appliances. 

It looked like this:

Total$688
Major Home Appliance Life Expectancy Chart
ItemLife Span LowLife Span HighAverageCost (New)Yearly Maint.Cost Per Year
Air Conditioner102015$4,000$100$367
Trash Compactors712110
Dryers, Electric111814$0
Dryers, Gas111613$750$58
Dishwashers91612$475$40
Garbage Disposals101513$120$9
Freezers1220160
Microwaves5108$400$50
Ranges, Electric1320160
Ranges, Gas152319$500$26
Ranges, Hoods919140
Refrigerators, Compact4128$0
Refrigerators, Standard101814$1,000$71
Washing Machines81612$800$67
Water Heater102015$600$40

It Seems Straight Forward, But It Isn’t 

On the  face of it, my company’s out of pocket cost of $525 for the home warranty seems like a good purchase.   

But, if you take into account some other factors the economics shift:

  • The home warranty doesn’t pay for the replacement of the item.  So that becomes a neutral cost which is similar whether you purchase the warranty, or not. 
  • The manufacturer covers a warranty for the appliance for the first year.  Most major credit cards extend that warranty (albeit for personal use, but we’ll leave that point aside) one to two years more. 
  • The out of pocket expense for a repair person could be less. 
  • You’re not getting any better rate by going through the home warranty company. 

Calculating The Cost Of Repairs 

Across our several rental properties with home warranties, we see between zero repairs and two repairs related to the home warranty per year. 

With a call out fee of $125 per visit, and $525 per year per policy, in the worst case that equals $387.50 ($775 / 2). 

Putting aside major repairs like air conditioners, most other repairs can be done for less than $775 per year.  

Hedging Your Bets 

All situations are not equal.  If you recently purchase an older property that has the potential of having numerous problems (two or more per year), or you haven’t identified resources in the area of your rental property such as appliance repair people who can fix the issue, then perhaps a home warranty might be a good investment. 

It’s Just Like Any Other Insurance Policy  

At the end of the day, home warranties are just like any other insurance policy.  While they offer some protections, they have numerous exclusions, and at the end of the day you should measure your risk against the costs.  If you enforce a “first fee” with the tenant, where the tenant pays the initial cost of any repair, you can further de-risk and mitigate the need for a home warranty. 

Each case is different.  My best advice is to run the numbers each year, and adjust your strategy accordingly. 

My Email Manifesto …

I think that we can all agree that time is one of our most valuable assets, and anything that wastes our time should be avoided.  

I’ve been assessing those areas of my life, both work and personal, where I’m wasting time.  I’ve been carefully looking for inefficiencies in my own life, including instances where I create inefficiencies in the daily lives of others, and I’ve identified one of the most common sources of wasted time: 

email.  

Consider this my Email Manifesto.  I’m documenting my email best practices that can save all of us time and energy!  I practice these methods today, and find that they enable me to communicate more clearly and efficiently, and help minimize the back and forth that is common when communicating by email. Not only do these email best practices save me time, but they save time for the recipients of my emails as well.  

Like many of my best practices, I consider this a living document.  I encourage you to make it your own.  Include your own best practices on how to use email more efficiently.   Share them with coworkers, colleagues, and friends.  And share them with me !

THE TO: LINE

Choose Carefully

Email efficiency starts with choosing the right recipients.  While it may not take much to add another recipient to your email thread, it takes time and energy for the recipient to read through your email. 

Be thoughtful in who you choose to email.  Only send an email to those who need to be included in the conversation.  There is nothing more annoying than receiving an email with the lunch menu for the New York office, when you work in the Chicago office.   

Consider: Should you be emailing this at all ?

Not every document should be emailed.  Far too often we send emails, when they really should be documents which are posted in a shared drive.  Instead of emailing that status sheet to the entire company, consider posting it to a shared drive.  Not only does this ensure that it is available for everyone at any time, but it also removes one more redundant email from the inbox.  

(Don’t) Reply All 

A majority of the unnecessary emails I receive are from colleagues who are replying all to an email.  Replying All to the email from Frank in facilities letting the company know that the air conditioning has been fixed says more about you than it does about Frank.  Do everyone a favor; just email Frank and his supervisor.  You may think that you’re showing your “company spirit”, but what you’re actually doing is diluting the value of the other emails that you send that are actually important.  Quite frankly, no one cares if you agree or not, and no one wants to know what you want to have for lunch.  You can help others avoid “replying all” by putting your recipients on BCC, making it impossible for them to communicate with anyone else but you, the sender. 

Use CC properly

Similar to carefully choosing the right email recipients, it is also important to signal to the recipients your expectations of them.   Beyond giving clear instructions in the body of the email,  a good way to provide a “hint” to the recipients is in your use of the To and CC fields.   

I use these fields very intentionally to signal to the recipients my expectations of their role.   The “To” line is meant for people who should have an active voice in the conversation, or have specific action items.  The CC line is meant for those people who are “just there to listen”.  They just need to know about something, but have no actionable next steps on the topic.

It may take some time to train those with whom you actively communicate, but once you do you’ll find this similar process can save hours of time reading and answering emails.

Don’t Micromanage

Don’t require your reports to CC you on everything.  Trust them to do their jobs; then check in on them regularly to make sure that they are hitting their goals. 

THE SUBJECT LINE:

The subject line is arguably the most important part of your email.  It should be clear, consistent, and succinct.  

Want to get encourage more response to your emails?  Use powerful subject lines

Subject Line : 

  • IMPORTANT 
  • URGENT
  • INTERNAL CONFIDENTIAL
  • CONFIDENTIAL 
  • QUICK

These will help recipients prioritize your emails against their other daily action items. 

THE BODY:

Avoid pronouns

I often say “Pronouns Kill”.  It’s my way of exaggerating a point; using pronouns more often than not leads to miscommunication.  So in business, I try to limit their use. It takes a little effort to structure sentences without abusing pronouns, but once you get the hang of it you’ll eliminate any chance that your email will be misinterpreted and that the recipient might ask for clarification. 

Provide clear summaries and next steps  
If your email is lengthy, provide a short overview up top, and then a “background” beneath it.   I like to provide an “Overview:”, or use “TL:DR” (too long: didn’t read) to summarize the topic.

Future Proof Your Emails
Write each email as if there was no way for the other person to respond.  Concisely include all of the relevant information (who, what, why, when, and how), and include the dates by when you need the response.  

Include those attachments
Don’t expect the recipient to go digging through your emails to find the latest version of the document you attached four emails prior.  Think in terms of what will make the email easiest for the recipient, and just resend it. 

Maximize the Features
Have a question for the company?  Use the Survey feature instead of emailing a response.  

It’s not what you say; it’s what people read.  

Be thoughtful with the words you choose.  Always include all of the relevant details.  Don’t assume that someone remembers the topic, or your previous thread.  Provide recaps to keep it easy on the reader.  Don’t make the reader dig through threads to understand context. 

Guide the Reader

Use Highlight to help the reader find the section where you have questions. 

I hope that these tips help save you, and others, a lot of time!

Working With The Bank of Mom & Dad

Interest rates for borrowing money to buy are home are historically low.  A quick search at BankRate.com shows that a 30 year fixed rate loan for $300,000 be as low as 3.0%.  But there is one bank that can offer even better rates –  in some cases as low as 0.14% (as of October 2020).  The Bank of Mom and Dad.  

If you’re fortunate enough to have familial benefactors, you can take advantage of the IRS rules around Intra Family Loans.   Each month the IRS sets an Applicable Federal Rate (AFR), which is the minimum interest rate a lender may charge a borrower without the sum being considered a gift (and hence subject to federal gift tax).  These rates can be found here:

https://apps.irs.gov/app/picklist/list/federalRates.html  . 

The lender and the borrower can structure the loan however they like (for example, interest only with a balloon payment, or a more traditional interest + principal loan), and the borrower can use the funds however they like.  The most important stipulation is that the lender and borrower execute a legal document for the loan, and that the borrower make the payments just as they would with any other lender.  

If the borrower fails to make the payments, and/or the lender doesn’t enforce the loan, then the sum which has been lent could be considered a gift rather than a loan, and subsequently subject to a gift tax.  

Using this financial tool can also be a good way to legally transfer assets from one generation to another, allowing them to appreciate outside of estate tax laws.  

As always, it is highly recommended that you quickly consult your tax professional before making any decisions!  

Remember to thank your parents! Or someone else’s.

Wildfire Resources : What You Need To Know

It’s not too late to save your home from a wildfire. 

This week I want to take a minute to tell you about a topic which is very important to me. 

I grew up in an area that was extremely prone to wildfires.  Steep cliffs fell to a narrow canyon, at the bottom of which was a creek that ultimately fed into the Pacific Ocean.  When the conditions were “just right”,  wildfires would move swiftly and uncontrollably all the way to the beach.  And our home sat directly in that path.  This was a pattern that has been repeating every 30 to 75 years, beginning long before my great grandfather bought the land in 1924.  

I was raised to be respectful of the environment.  I was taught that we were the visitors on the land where we live.   With fire a constant risk, my family thoughtfully built our home and landscaped the property in harmony with our natural surroundings, and to harden it in advance of the eventual coming fire. It’s with this knowledge and personal experience that I can appreciate the fear that people feel about wildfires.   

But what if I told you that despite climate change, you can still secure your home against wildfires.  With proper planning, you can live in synergy with nature, and your home and property can survive a future wildfire. 

It takes knowledge and work, but it can be done.  

Below I’ve highlighted some of the best resources I’ve found that can teach the average homeowner how to protect their home.  You’ll have to provide the sweat equity.  

National Fire Situational Awareness 

The key to surviving a wildfire is advance warning.  By keeping an eye on this website, especially during times of the year which are prone to fires, and watching wind patterns, you can anticipate fires long before they reach your home. 

https://maps.nwcg.gov/sa

Cal Fire

Cal Fire offers a similar map, with more detail per incident but fewer incidents.   

https://www.fire.ca.gov/incidents/

ReadyforWildfire.org

Offers specific advice on how to harden your home for wildfires. 

A Homeowner’s Guide to Fire and Watershed Management

This is the guide that my grandfather used as the foundation for hardening our homestead. 

http://scottgordon.com/wp-content/uploads/2017/09/A-Homeowners-Guide-To-Fire-and-Watershed-Management-Klaus-Radtke.pdf

I hope that you’ll find these resources as valuable as we have.  If so, let me know!

Re-Evaluating Your Business Today

Change can be challenging for any business.  And as any business owner knows, the past few months have been challenging for almost all businesses as consumers – whether by choice or mandate –  dramatically change their behaviors. 

Many businesses are trying to redefine themselves in our new reality.  Brick and mortar retail stores already under pressure from the pre-pandemic shift to online (which has only been exacerbated in recent months), movie theaters, restaurants, hair salons, and many more similar businesses that rely on in person consumer interactions have been negatively impacted. 

Alternatively, other businesses that support the new “stay at home” society are benefitting from our recent global shift in consumer behavior.  Examples of these are in-home streaming media, at home fitness, food delivery, shipping services and shipping materials, construction (to build outdoor dining spaces and compliant plastic barriers).  

Whether you’re benefiting from or negatively impacted by these changes, chances are that you’ll need to pivot in some way to react to our new reality.  

There are a few techniques you can follow that will make this process much easier, and improve the chances that your business will come out on the other side stronger than it was before. 

The first thing I recommend doing is to (re)evaluate your business.  At its core, what made your pre-pandemic business successful.  Beyond your products and services, what made your business successful?  Was it your ability to distribute products?  Your industry specific expertise?   What is your “superpower”?

How think about your clients’ needs in light of today’s reality.  How have they changed recently?  What are their pain points, and where do your skills and services best align to service those pain points?

Your solution for future success lies in the intersection between those two areas.  Let me give you a real-life example:

A friend and colleague had built up a success multimillion dollar business providing notable Fortune 100 travel and entertainment companies with children’s toys.  When those businesses temporarily closed their doors, his business dried up.   Reflecting upon his company’s “superpower”, he recognized that the steps he took to import certified child safe toys were very similar to the steps needed to bring in Personal Protective Equipment (PPE).  

Leveraging the reputation he’d built for delivering quality goods on time, and his experience dealing with strict product regulations, he successfully pivoted his business from delivering children’s toys to PPE products.   This is a perfect example of recognizing your core strengths and the changing needs of your clients, and refocusing your efforts to serve an immediate need.  

How are you adapting to these changes?  I want to hear your success stories … and your challenges! 

The Gamification Of Travel

Over the past decade, I’ve been somewhat of a road warrior.  I traveled coast to coast in the United States at least every two weeks, if not weekly, and made at least two trips to Europe annually.   I traveled so much that most years I held top tier statuses at my preferred airline and hotel.  Some months I’d spend more nights sleeping in a hotel than in my own bed.  The valet parkers at the airport knew me by name.  

It took a pandemic to make me realize how addicted I was to travel rewards, and how much I was sacrificing because of my addiction.  

How did this happen? 

Just like scientists in a lab, the travel industry has gamified travel.  

Airlines have been using preferred treatment to train me to book their brand when I travel.  My earned status opened a velvet rope to amenities like private security checkpoints, priority boarding, and gate to gate private shuttles.   While you were stuck in coach wondering why they gate checked your luggage, I was comfortably in first class with my bottomless complimentary drinks, a warm meal,  and my (much larger) bag safely in the overhead compartment above me.  

Hotels bought my loyalty with early check ins, late check outs, free upgrades to suites (that would have otherwise gone empty), and tokens waiting in my room (wine, chocolate, etc.) with handwritten notes of gratitude on cards.  

Even rental car companies offered me upgrades and points towards free days.  

And all of this had the proven effect of encouraging me to travel more.  In fact, the incentive programs work so well at encouraging brand loyalty and excessive travel that now almost every travel related company offers some type of reward program. 

It all starts with the first upgrade. 

One day you’re sitting in coach, waiting for the plane door to close so that you can get to your next city.  Suddenly the gate agent appears, calls you by name, and invites you to join the passengers in first class.   You’ve been chosen.  You’ve arrived.  And as Seinfeld noted, once you’ve been in first class, you can never go back to coach. 

You research all of the travel programs, asking your friends which they think is the best before choosing a preferred airline and hotel where you’ll focus all of your travel dollars.  You sign up for their points programs and maybe even get their affiliated credit card to maximize your efforts.  You start to engineer your business trips around earning points – constantly trying to figure out how you can schedule your work trips to earn the most points.  

Then you realize that these rewards programs offer points accelerators based upon your status; the higher your status, the more bonus points you earn for a mile flown or a nights stay.  Now they have you hooked.   

Each year they raise the bar to achieve each status tier.  You have to travel further, and spend more money.  The accelerators make it easier for those who already hold top tier status to continue to achieve that status, creating an ever expanding divide between Diamond and Gold.  

And now they have you hooked. 

Stop traveling and you lose all of the complimentary perks.  Once you lose the status, you lose the points accelerators and it becomes that much harder to get back to the pinnacle of status.  

But at what cost?

In some ways I cannot quantify the cost.  Those hours in airports and on planes, the long nights in hotel rooms, and the endless hours of driving … they didn’t make me any happier.  

I’d tell myself that it was worth it.  If I couldn’t use the points, I’d share the wealth.  I’d often shower friends and family with free trips paid with points I would never use.

I wore my preferred status like a badge of honor.  I calculated trip miles and hotels stays, flying the furthest routes to earn the most miles, switching hotels every night to get “first night bonus points” when offered.  

Let’s be honest, excessive travel isn’t good for your body.  We spend a tremendous amount of time sitting, and the eating habits that most of us maintain “on the road” are less than desirable.   

The saying “absence makes the heart grow fonder” is only true up to a point, and that’s usually about the time the other person realizes that they enjoy their life more without you than with you.  

And if you believe like I do that your most valuable asset is time, then you’ll also agree that your time is too valuable to sell it to someone else in exchange for preferential treatment.  That is, after all, what we are doing when we travel to earn points; we are exchanging our time (on a plane, in a hotel room, or generally on the road) for free perks.   Time that you could be spending with the people you love, doing the things that you like to do, all while building the life you want to live.  

A new beginning. 

Like most people, I haven’t been able to travel as much over the past few months.  And during that time, I’ve come to realize that I’ve been sacrificing everything that I love and appreciate all just to earn travel status.   Through my work travel over the past ten plus year I’ve put at risk my health, my relationships, and my own happiness.  

Now is the time to make a positive change.  I’ve committed to only traveling for work when I absolutely must.  If we’ve learned anything during this pandemic is that most things can be done remotely.  I’m going to take full advantage of the comfort level most of my colleagues and clients have gained with tools like video conferencing.

For those times when I must travel I’ll be focused on having the best possible trip in the shortest amount of time, rather than maximizing my point acquisition.   Since I won’t be brand loyal, I can shop for more convenient (and cost effective) flights and hotels without sacrificing quality.  This doesn’t mean that I’ve sworn off points.  Rather, I’ve decided not to let points and other travel rewards dictate my life. 

The reward for this activity is handsome.  I’m more productive in a focused environment, so I expect that I’ll be able to continue the amazing business success that I’ve had during this pandemic.   I’ll also have more time to dedicate myself to my relationship, my full time job, my side hustles, and my passion hobbies.  My relationship with my fiancé will most certainly be better.  And I’ll be healthier – working out more and eating fresh, well prepared food instead of processed restaurant meals. 

Will it work?  I don’t know.  I’ll send you a postcard, and let you know how it’s going.  

Adapting Your Cross Channel Marketing

Recently a respected colleague and long time friend reached out to me with a question: “How do I market to current and prospective customers more effectively, given the current environment?”. 

This is a great question.  With all of the changes in the economy due to the global event this year, not only has consumer behavior changed but so has business behavior. His question exemplifies a proactive pivot approach that I support.  When business and economic norms take dramatic shifts, business owners must shift too.  As I’ll discuss in a coming post, when faced with dramatic shifts in the state of your business, taking a thoughtful yet aggressive data based approach to the solution is the best way to ensure the survival of your business.  

To be fair, there are many ways to answer his question.  One of my favorite techniques, which is overlooked by many businesses, is to leverage email campaigns in conjunction with a paid retargeting campaign in social media. 

A study by Facebook and Salesforce (https://www.facebook.com/business/news/email-and-facebook-ads) showed that by executing an email campaign in conjunction with a social media campaign improved the sales conversions by 22%, and extended the exposure of the campaign (the “reach”) by 77%.  

While this study was done in 2014, the core tenets are just as viable today.  In the case study above, you can naturally substitute “Facebook” with any other social network (LinkedIn, for example).  

It is important to note that (typically) case studies like these highlight the best possible outcome the author was able to generate in a controlled environment, and as such your results may vary.  But with that said, it isn’t illogical to think that your campaigns will benefit from 1) marketing to customers who are already familiar with your brand and 2) multichannel marketing.  

This marketing model can be used with both B2C and B2B marketing.  With the proliferation of devices, there are more ways than ever to market to consumers.  It is no longer the case when one channel effectively grabs attention and drives action; consumers want and need input from numerous sources.   And when you unpack it, businesses are really just companies made up of consumers; so the marketing techniques you use for consumers can and often do translate to successful strategies for marketing to businesses. 

In response to my friend’s query, I outlined the following checklist for enabling a campaign via email and social.  Please send me your feedback; it’s welcomed!

SETUP

Before we start, we’ll need to setup a few things:

  • An bulk email service account.  There are numerous providers from which to choose – MailChimp is currently one of my favorites.  (est. 1 hour)
    • You’ll create a template email with logo.  This is what your email campaign will look like. I recommend a very clean look – perhaps your logo on a white background.  You do NOT want it to look like a marketing piece. 
  • Landing Page (est 4 hours per page)
    • This is the webpage where you’ll be driving your email recipients, when they click on a link in the email.  I always recommend a simple semi-generic landing page where their contact info is collected (or prefilled), and their requested item is promoted. 
      • Even better if this can drive to an immediate online purchase option.
    • You may want to consider including a direct dial number as well. Always give the option to speak to a human. 
  • Analytics Tracking (est. 30 min)
    • You’ll want to make sure that you have analytics software installed on your webpages, especially on your landing page.  This is a very simple process which can be done quickly by any webmaster, who will install the code on your website and in particular the landing page(s).
  • Identify 4-10 product / service offerings (est 2 hours)
    • You’re going to want to start with a handful of offers that will be attractive to a wide group of customers.  You’ll be promoting these in your emails, your paid social marketing, and on your landing page(s).   Choose items that have high margin (profit), low shipping costs, and aren’t perishable.
  • Identify initial target customers (est 2 hours)
    • These are the customers you’ll be reaching with the campaign.  This audience should be broad enough to reach a larger group. 
      • by industry
      • by geo
      • by title
  • Tracking
    • We’ll want to understand up front how we’ll be tracking the results, and then building those tracking mechanisms into the campaigns. 

CAPTURING EMAILS

This is very simple.  Your team will do an advanced search in your existingCRM system.  If you aren’t collecting email addresses from your clients, START TODAY!

CAMPAIGNS

The process for the email campaigns is quite simple: 

  1. The emails are loaded into MailChimp. 
  2. Your team uses the email template above to create a simple, personal, friendly campaign. 
  3. Emails are sent to clients. 
  4. You optimize the content / creative, frequency, and target audience for best results.  

PAID SOCIAL MARKETING 

  • The same emails are loaded into your preferred social media channel. 
  • A custom audience campaign is targeted towards those same contacts, only this time via the social channel. 

TRACKING THE RESULTS

Tracking code will be included in all activities so that the results can be measured, and then the product offering and target audience is tracked.   This allows for an ever improving solution; you can identify which industries, regions, job titles, etc respond best. 

Armed with minimal resources, you can leverage the power of email + paid social to reach their customers with the optimal message to drive sales.