I just use free advertising via social media.
Now what could be wrong with free advertising? Well, nothing, unless you consider that anybody can do it, including your competition. When you engage in a business and rely on free or cheap advertising to get the word out about your business AND you start to do well. Word of mouth gets around and soon you’ll have allot of people wanting to do what you do. When they realize that it only takes free advertising to get off the ground and make some money, they too will be finding ways to do what you do and that saturates the market making it harder for you to do business.
This happens over and over again. Free advertising is never a long-term solution.
One such example. Again, no names, but we had a different client who was installing storm shelters. It was a bad year for storms and he was swamped. I asked him about advertising and his response was to tell me that he had more business than he could handle and that advertising was of no value to him at that time.
I saw him a few years later at a trade show and he told me then that he had made a big mistake not advertising. His competitors were saturating the market and he now had to advertise just to stay in business. He told me that he should have advertised when times were good to help him through the rough times that came afterward.
In 2020, when COVID hit, my real estate clients decided to do away with the printed magazine and focus entirely on free social media ads. The magazine died and frankly so did most of their businesses.
Did social media work in selling homes? Yes! They were selling houses left and right. You may remember the housing market boom that followed COVID?
I warned them that selling homes via social media was a bad idea, but unfortunately, they didn’t listen to me.
Why was it a bad idea? Well, when I first started that magazine, the first client that helped me get it off the ground, told me that if I ever advertised a FSBO (for sale by owner) home in the magazine that she would pull out and never advertise with me again. The reason? It’s simple. the magazine gave them an advantage over “do it yourselfers” who didn’t want to pay a real estate commission. If I had FSBO’s in the magazine, they would lose sales. So when these same agents decided to put their homes on facebook and Zillo and not the magazine, they created a marketplace for real estate that was free and easy, not just for them, but for anybody wanting to sell a home without paying a commission.
To prove my point, my wife witnessed a local homeowner wanting to sell their home asking for advice on a good real estate agent. The advice they were given was “don’t use a real estate agent, sell it yourself on facebook and save the commission”. The internet is awash with articles telling home sellers how easy it is to sell their own homes on facebook.
The lesson is that free advertising, while not a bad thing, should only be used lightly and never relied upon as your only advertising! Be careful not to destroy your business in order to save money on advertising. Give yourself the advantage, not your competitors.