Remember learning about the power of compound interest in your high school economics class? I do. I can still see my teacher displaying charts of money’s growth over time when interest was compounded from period-to-period. Here are two definitions for “compound”:
intensify: to make more intense, stronger, or more marked
put or add together; “combine resources”
Compound interest is a powerful saving strategy because your savings intensify over time. This happens because you earn interest on the money you originally saved and then you earn interest on the interest previously earned. With each passing compounding period, your savings earn more and more interest.
The very same thing can happen over time with your marketing. There are three basic ways this can be accomplished in your business:
1. As you make sales and earn commissions, increase the amount of money you invest into marketing. This compounding increases each year, along with your sales.
To engineer this in your business, you must set a specific percentage of your commissions to save and allocate to marketing. In addition, you must have the discipline to increase this set percentage each year. From my observation, this compounding doesn’t actually occur for most agents. This is because most agents have a tendency to spend every penny they make. They don’t develop the discipline to save or re-invest a fixed percentage of their commissions.
2. Consistent testing of new lead generation ads and lead conversion processes in your business.
In No. 1 above your goal should be to increase the amount of money you commit to marketing. The goal is to put te additional marketing dollars you spend toward testing new ads and campaigns. Good marketing is really about testing. You must test consistently and constantly. A single new ad that ends up being a winner can be the difference in selling many more homes. I saw it happen in my business, and it was because I tested weekly.
3. By creating marketing pieces that have the ability to be spread virally.
A viral marketing piece is one that is spread by word of mouth, to friends, family, co-workers, etc. Over time, this kind of marketing takes on a life of its own, moving through groups of people without you expending any additional funds to market it. Examples of viral marketing might be a book you wrote, a video, a free report,or an audio recording. The major component of this idea is to make your viral marketing piece awesome. The content should be so good that anybody who receives it wants to pass it on to everybody they know.
I accomplished this viral strategy by offering a book I wrote as an eBook and then giving each person the right to give the book away to others. Slowly but surely we began to be contacted by people interested in our services that hadn’t responded to any of our lead generation advertisements. When we met with them, they would explain that a friend of theirs had passed on my book to them. This is compound marketing at it’s best.
Take a second and think about how big compound marketing like that could be for your business over time. It ratchets up your marketing on its own, over days, weeks, months. It brings you more leads, more sales and higher profits as it grows.
Unfortunately, most real estate agents don’t think about compound marketing. They are very haphazard with their marketing. Its the “dreaded” task that they put off and rarely get to because they’re too busy.
Here are the steps you could take to compound marketing:
1. Think long-term about your marketing instead of short-term
2. Make your marketing the No. 1 priority in your business
3. Save a portion of each commission check you receive and reinvest it into future marketing
4. Increase the amount invested into marketing over time, as your income grows
5. Always be testing new lead generation ads
6. Always be testing new lead conversion approaches
7. Create viral marketing pieces and encourage prospects and clients to give them away
Make these efforts to compound your marketing, and you will be glad you did!
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