Direct Response VS Branding

One night stand …or…Dynamic, long lasting and loving relationship?

Which would you choose?

OK one night stand sounds like fun…but it’s a quick fix and does not really match up to the latter. At least I hope not.

Above is a simple analogy to get your attention, something your advertising should be doing…but what it should also do is reveal your company’s identity, character and beliefs. That is where the real attraction for your consumer lies, and consolidates a mutual, loyal and profitable relationship.

So what is the core point of this article? Answer: Advertising for SMEs and the advice and rules you are supposed to adhere to concerning Brand Building or Direct Response Advertising. This advice and doctrine usually comes from people not willing or dynamic enough to analyse and challenge ideals whom could be holding your business back from achieving its true potential. The advice and the ideal as it stands is thus:

-SMEs should not build their brand image or position themselves; as these are long-term processes and do not guarantee results. For their smaller marketing budgets, they should concentrate on fast, easy and direct response advertising that diverts their customers to their business in the short-term.

Sounds great, basically they are saying:

‘Hello Small to Medium sized Enterprises…you cannot be a brand….you have to stick to what you are…which is a small, medium sized company. The Ferrari, platinum, diamond studded, sexy advertising is for the brand building mega-companies like Nike and Coca-Cola’.

I don’t know about you, but I prefer the Platinum option and Ferraris aren’t so bad either. But oh, I forgot, if you are an SME you better stick to soulless, cheap diamante and forgettable advertising.
But what are you to do? Surely you can’t compete with Coca-Cola and Nike just yet, and you can’t wait for years to build your brand, so you may as well just hang your head and cower to perfunctory direct response advertising.

Sorry wrong answer.

A dynamic and forward thinking advertising agency or supposed marketing ‘genius’ should be confident and informed enough to advise your business that you CAN build your brand identity TOGETHER with having a rapid response result from your customers in the short-term.
Firstly, the bonus with this effective option is that you are consistently building your brand, so along the line your future Direct Response work will engender familiarity and loyalty from your consumers as your brand grows and succeeds. Who knows you may be getting that Ferrari, sexy, diamond advertising work sooner than you think.
Secondly it should not be a ridiculously expensive option. A good agency should offer you the service for a competitive rate, a great agency should work with you for a innovative creative solution that fits your budget and successfully executes both functions: Direct Response Results and effective Brand Building.

Sounds great again, but where’s an example? Think EasyJet or Gossard Wonderbra. They had a momentous rapid response to their advertising and at the SAME time crafted a powerful brand identity and effective market position. EasyJet branded to the point where they almost ‘own’ the colour orange and ‘low cost’ associations. And the beauty of these examples, they were both executed on tight budgets.

Now for the bolder and dynamic of you, who are thinking of branding and positioning strategy.

Branding states your intentions, it bares all- but only shows the best bits. It means your business goals of competing in your market become transparent, which clearly shows your core customers and competitors your unfaltering commitment to your company and your beliefs in your product and service. It means you are in it, wholeheartedly, for the long haul. As a consumer I want to see that, I would trust and respect a company that is confident and proud of themselves rather than their cowardly, wimpy competitors. This is where the process of AIDCA (Awareness, Interest, Desire, Conviction and Action) really comes alive and consumers really Act, and do so with conviction and a propensity to become lucrative and loyal customers in the long-term.

So now you are aiming high, but you’re not Virgin or IKEA just yet, but who says you want to be anyway. You may be happy in your own field and comfort zone. However what your company really wants is to be the best in your field and ultimately brandish the leading competitive edge you may feel you are lacking. But wait, now you do have that edge, in the form of a dynamic engine of innovation that will blast you out of your comfort zone and market position: Branding.

So now you are on the brand map, you really are a bit like Virgin, IKEA and EasyJet and many other great brands.

All of them were told ‘not’ to brand and expect short-term rapid response by that same old marketing record.

All chose to disregard him.

All got Rapid Results as well as powerful Brand Building success.

All companies were in fiercely competitive markets and could have stayed in their comfort zone.

All have powerful, unforgettable and effective identities and positions.

All companies are now mega brands.

They did it. They started somewhere. So can you. You can also brand successfully and get short-term direct results. Maybe not on their scale straight away but at least on a scale that is far higher and more profitable than the one you are ‘told’ to stay on.

Mono Ghose MA(Hons) – Mavericks Executive Account Director/Partner
[email protected]

Hampton Roads Virginia Market Update and Action Plan

Al Czervik from the movie “Caddyshack,” played by Rodney Dangerfield, gets a call on the golf course: “Hello. It’s my broker. What? Then buy, buy, buy! Oh, everyone’s buying? Then sell, sell, sell!”

What I learned from Al is don’t follow the herd, they are generally wrong and late. If everyone wants to buy, look around, it’s probably the top. Definitely if everyone is heading for the exit, it’s the bottom.

The same is true in the real estate market. When consumer confidence is down and doom and gloom is in the media, look around. Is it time to follow the crowd and buy gold, or zig when they zag and buy real estate?

As all real estate is local, here are the numbers for our region. According to the Virginia Association of Realtors 4th quarter report ending 2011, our sales volume numbers are up from 3969 in Q4 2010 to 4480 in 2011, a 12.9%. That is the highest percentage increase in the state. Also our area rate of foreclosure has dropped 26% from the same period last year. However our median home price is down from $209,900 to $194,000 a 7.6% decrease. So what do these numbers and statistics mean to you. Well that depends on your situation.

If you are a first time buyer, now would be the time to jump in, the water is warm. It is an unprecedented time for you. Interest rates and home prices usually have an inverse relationship. When home prices are high, rates are low or when rates are high prices are low. Right now it is the perfect time to get started on your first home because both the rates and prices are low. First time home buyers are recognizing this and the numbers reflect that. There is an increase in demand for homes under $200,000 and sales are up in that price point from 4th quarter 2010 even without the tax credits. The thing you are racing against is the interest rate clock. While prices of homes may start to stabilize for the under $200,000 price point, a slight tick up in interest rates can cost you thousands in interest or lessen your buying power.

What if you are a move up buyer? Your family is expanding; job is stable and you may have gotten that first promotion. Good news for you too! Your home under $200,000 is in demand and home sales in the over $300,000 price point numbers are down from last year. You get the best of both worlds. While home values are down from their peak, you get the added advantage of more than making up the decline on the buy side. For instance if the market value for your home use to be $200,000 and now its $180,000, at 10% decrease from the peak, that’s OK because the larger home that was $400,000 is now $360,000 the same 10% decline more than covers the market value adjustment when you sold. Again, your race is against the interest clock.

Real estate investors? The investors I know are losing sleep at night hoping the economy does not recover until they have a chance to buy as much rental property as they can. As an investor my self, what I see is that with rates low and prices low, the margins are such that cash flow will usually allow you to hire a property manager freeing you up to spend time with your family or simply focus on buying. I have also seen more sellers offering owner financing and low down payment loans on certain foreclosure homes. Buy and hold investors know that it is not how high you sell but how low you buy that will help fund your children’s college or line that retirement nest egg.

Where does that leave home sellers of the more expensive homes in this buyers market? Well don’t feel bad. While it has been said that we are in a price war at a beauty contest, homes are still selling. Say you have a large two story home on a large wooded home site. The kids are all off doing their own thing and you envision doing better things with your time than rake leaves and vacuum bedrooms that nobody uses. Here is the strategy for you. If you have the ability to rent your home and buy your one level low maintenance home that would be the right direction. Supply and demand of rental homes has driven up the rental rates while the low interest rates let you maximize your buy side. Use a professional property manager to handle the details and sell when the market recovers. It is not a direction for everyone, but one to consider.

Another thought is offer owner financing. I have purchased several homes this way and it is a win/win. You get to earn a higher rate of return on your money than what the banks are paying and often can sell your home quicker and for more than with conventional mortgage terms. Have the buyer pay off the balance in 5 years to get the bulk of you money in a lump sum when the lending guidelines come back to the center of the spectrum and they can refinance. Again, not for everyone but by surrounding yourself with a good attorney and real estate agent, this could be an option.

If both of those options make you queasy and would keep you up at night, no problem; lets examine the ugly truth of getting your home sold. Countless articles have been written on getting your home in the proper condition to sell. Fresh paint, uncluttered, you know the drill. In today’s market those are a given if you want to get top dollar.

Truly achieving top dollar for your home starts with realistic pricing from the start.

Here are some common home pricing mistakes. Many home sellers price their home based on what their neighbors’ asking price is for their home. The problem with that strategy is that the neighbors can ask anything they want for their home and if they are priced above market value (and yours is nicer and better cared for) you price yours even higher still.

Other home sellers get their perception of their home’s value from the tax assessment. The drawback here is, that recently, there is seldom a correlation between tax assessment and market value. I have seen few homes in the area selling above assessment, far more selling well below assessment. It is hard to find a rhyme or reason between the two.

Lastly I see home sellers list their home with the highest bidder. Many articles suggest interviewing three agents. Sound advice if you are comparing their marketing strategy and knowledge. Not so good if you simply put your home in the hands of the highest bidder. If one agent tells they can sell for $400,000 the next tells you $425,000 and the next $450,000 it is human nature to go with the highest price, but is the high bidder telling you what you want to hear to get a listing or the truth? It is hard to go into some ones home they have loved and cared for, have their heart and soul into, and created family memories in, and be the bearer or bad news. Believe me I have done it plenty of times.

Choose your agent for experience, marketing, and service.

There are serious downsides to overpricing. You will have fewer showing. Let’s face it, agents want to show, and buyers want to see homes that are good buys. With today’s technology, agents set up their buyers in an automatic search where their criteria are set for area, price and other wants. As soon as a new listing hits the multiple listing service every buyer that is interested in a home in your area and price range will get an instant e-mail with your home. The listings then feed out to dozens of other search engines world wide. While in the past it used to take some time to get maximum exposure, it now takes minutes. If you have few or no showing during the first 30 days, that is market feedback.

You’ll help get your neighbor’s home sold. I often hear, “I want to start above market value to leave myself some wiggle room, I can always come down”. While it is true, you can always come down you end up missing the crucial first 30 days and often make other comparable homes that are priced to market value look that much better. The truth is that most buyers would make a full priced offer on a home that is priced well before making a low offer on a home that is priced too high. Think about your own buying habits. If you go into a store a see a chair for $100, then see the same chair in another for $100 then the same chair in a third store for $80, you recognize the least expensive chair as a good value and buy it full price. The same is true with home buyers, nobody knows the market better than a buyer actively looking. They will make offers on the homes that are the perceived best value.

So what’s the solution? Consider having your home professionally appraised by an independent certified appraiser. It boggles my mind sometimes how people will think nothing of spending $100 to have their $2000 used car detailed before selling it but won’t spend the $300-$400 having what is usually their most valuable financial asset appraised before listing. Having your home pre-appraised offers several advantages. First it helps you make sound financial decisions on the buy side. You don’t start looking at homes to buy based on an unrealistic dollar amount that you net on the sale of your home. Second in a declining market it helps you avoid chasing the market down. What I have seen happen time and again is sellers pricing above market value and as the market declines they reduce their price but it is still above the market. The market declines again and they reduce again but it is still above the market. If they priced at, or better yet, slightly below the market, their home would be the perceived good value get lots of showing and produce several offers. That is marketing in its truest form. It saddens when I meet with someone who had their home on the market for months, or worse years, and had continually reduced. If they priced it slightly below market a year ago they would have been financially better off.

With tight credit guidelines there is more involved than simply a ready willing and able buyer and a ready willing and able seller coming to an agreement. The bank supplying the money also has a say in the price before they agree to lend. Bottom line is buyers will not pay and banks will not loan on higher than appraised market value. Having the ability to leave a copy of the appraisal on display for buyers to see and having the list price match the recent appraisal will make home shoppers looking at your home feel more confident in the same way that a used car buyer can get a Carfax Report before purchasing.

The last advantage to having your home pre-appraised is it will give your agent a marketing advantage. The multiple listing computer allows for public comments and comments for agents only. If your listing agent has the ability to advertise in the agent comments that the home has been pre-appraised, buyers agents will feel confident when showing the home. The two most common reasons that real estate transactions fall apart after a contract is ratified is because either something shows up in the home inspection or the home does not appraise for the purchase price. Having the appraisal done in advance helps to maximize your chance of a successful closing with no problems. Remember though, that appraisal value is just a starting point, sometimes market price adjustments still need to be made. Just like not every car sells at full NADA retail value, depending on the supply of homes out there, not every home sells at full appraisal retail.

With this strategy you will maximize your sales price, reduce your marketing time and have fewer problems so don’t be surprised if your home sells quickly. That would be the market responding to you doing your homework up front.

There is an excessive amount of traffic coming from your Region.

#EANF#