Marketing Prediction For Fall/Winter Of 2022

If you just hustle, I think most people can sell 20, 25 homes a year, eventually. Not saying in your first year, you're going to sell 25 homes a year, but after you do it for a couple of years, you should be able to get to probably 20, 25 homes a year with straight up hustle if you're good at sales. To get beyond that, you need a marketing system because hard work in sales is not going to get you to 50, 60 deals a year. If it does, it probably creates more problems than it solves. The people that don't have a marketing system that are selling 40, 50 homes a year or more are often working 80 hours a week. What marketing does at a high level is it's buying back your time with pre-tax dollars. 

This is The Platform Marketing Show, where we interview the most creative and ambitious real estate agents in the country, dissect their local marketing strategy, and get the behind the scenes scoop on how they're generating listing leads and warm referrals. We'll dive into the specifics of what marketing campaigns are working for them, how much they're spending on those campaigns, and figure out how they have perfected what we call The Platform Marketing Strategy. This is your host, Tim Chermak. I'm the founder and CEO of Platform. I love marketing and I talk too much, so let's dive in. 

I want to give you a quick overview of the thesis of high-hanging fruit and then share how we're injecting the strategy into how we manage your ads. There’s a very different way of thinking about marketing. It's not really a tactic or a strategy as much as it is a new philosophy of marketing. It's like a different way of thinking about your marketing. 

What that means is that you can apply the idea of high-hanging fruit to Facebook ads. I view Facebook ads as a tactic, not a strategy. If someone asks you, “What's your strategy for growing your business?” and you say Facebook ads, that's not a good strategy. That's just a tactic. Once you understand our philosophy of high-hanging fruit here, you could apply high-hanging fruit to how you do direct mail, how you maybe do radio ads if you're doing radio advertising, how you do billboard advertising, YouTube ads, Facebook ads, TikTok, you name it. 

I want to talk about this idea on the remote Mastermind today. Once we overview the big picture, then we'll dive a little bit deeper into the granular specifics of what that means in the coming months. If you guys haven't read it, you can grab a copy on Amazon. I don't know, it's like $12 or $15. I have no idea what the price is. 

It is $18 and there's only one left. 

Damn inflation, hot damn. I would order it on Amazon just only because you'll get it a lot faster than if you email me and ask me to send it to you because that depends on when I can make it to FedEx and send you a copy. Amazon will get it to you a hell of a lot faster than if you email us and ask us to send you a copy. 

That's a book I wrote, let's see, back in 2016. As I was reading through it last week, it's weird reading a book that you wrote when you haven't read it in a long time. It almost was like I was reading something that someone else wrote. I tried to make it as timeless as possible when I wrote it. We weren't going into the specifics of what was popular with ads at that time, as much as just the principles that I saw happening in the real estate market. All of those have just greatly been accelerated, I think, since the book was originally published. 

What we're going to talk about today is all a derivative of the original ideas that were in this book. If this is an interesting session for you, go back to the original work here. One of the opening slides I used on the webinars I used to teach is this distinction between sales skill and marketing skill and how different points of your real estate career also depends what kind of market you're in and the price point. All these variables matter. 

If I look at just the median American market where it's an agent selling $300,000 homes, maybe $400,000 homes, that average, what that typically means is that I observed over and over and over again that there's a lot of agents out there that are just straight up good at sales. They could crush it in any sales role, it doesn't have to be real estate. If they were selling cars, they would sell a ton of cars. If they're selling homes, they'll sell a ton of homes. If they were selling B2B software packages or if they were in pharmaceutical sales selling to doctors and hospital administrators, they would crush it there too. 

If you're a real estate agent and you think of yourself as, “I am really good at sales and business development,” you can probably sell 20, 25, 30 homes a year without any marketing. Just by putting in the hours, setting some open houses, following up with everyone who contacts you, asking for referrals, doing a good job, basically the H word, hustle, if you just hustle, I think most people can sell 20, 25 homes a year, eventually. 

Not saying in your first year, you're going to sell 25 homes a year, but after you do it for a couple of years, you should be able to get to probably 20, 25 homes a year with straight up hustle if you're good at sales. To get beyond that, you need a marketing system because hard work in sales is not going to get you to 50, 60 deals a year. If it does, it probably creates more problems than it solves. 

The people that don't have a marketing system that are selling 40, 50 homes a year or more are often working 80 hours a week. What marketing does at a high level is it's buying back your time with pre-tax dollars. Most agents I see that become successful over, or I should say in the short term, when they become successful, is they end up trying to purchase back the time in their life with after-tax dollars. 

They start making $200,000, $300,000, or $400,000 a year, things are going well, they're happy, they have some money to spend every month, they have money to sock away into their retirement and kids' college savings fund and all that, they think, “I'm going to hire a nanny,” or “I'm going to hire someone to do laundry or cook meals for us,” or “I'm going to hire out all of our lawn care landscaping duties. We're going to hire people to handle all these things for us, our taxes, to run errands, to grocery shop for us,” all these things, almost none of those are tax-deductible because they're things in your personal life, yet we never think of marketing as being a time saver. We usually categorize it mentally and in the business growth part of our brain. 

If you think about it, marketing is really just saving you time. If marketing and building a brand in your area gets people to call you and it increases the amount of referrals you're getting, it's this win-win where it allows you to grow your business in a way that doesn't require your time. Up until this point, until you have a marketing system, you're basically selling your time. Your time is inherently linked with your GCI and your production. If you want to make more, you have to work more hours by either cold calling leads or attending community events. 

Lots of agents will say, “I don't have a marketing budget.” They proudly say that they've grown their business without ever spending money on marketing. I asked them, “Awesome. That's so cool. Where do you spend your time? What's generating all this?” It's like, “I'm super involved in the community. I always volunteer on this board or that nonprofit or my kid's school or my church." All of this is obviously feeding their business and that's a good thing. I would never tell someone not to do any of those things if they're passionate about that. That all has a time cost as well. 

I'll just pick a number, if you're making $200,000 a year in GCI, we know that your time is worth about $100 an hour. We just reverse engineer 2,000 hours in a year assuming at least 40 hours a week and 50 weeks a year. Someone making $200,000, their time is on average worth about $100 an hour. 

If you're spending five hours a week on various community involvement initiatives, again, whether it's your church, nonprofit, your kids' school, coaching a baseball team or a dance school, whatever, five hours a week at $100 an hour is $2,000 a month. Really, I would say you're spending $2,000 a month on marketing, you're just not thinking of it that way. You are valuing your time at zero, which your time is much more valuable than money. Money, you can always make more of. You can't manufacture more hours. That's a cliche, but I think most people, even though it's been said 1,000 times, they still do not understand how profound that is that you can always go and get more money, but you can't get more time. 

Actually, one of the best ways to invest your money, therefore, is acquiring more time, which is marketing. I view marketing as this magical elixir where you can buy back your time with pre-tax dollars because it's a business expense and grow your income at the same way. The way that most people do it doesn't make sense. I think we've been bamboozled in the real estate industry to think of marketing and lead generation as being synonymous. We think those two terms mean the same thing. “Marketing and lead generation, they're just two different ways of saying the same thing.” I think they're very, very different. 

Marketing properly understood should be much more holistic and a much bigger picture endeavor than just buying leads. If you look at the current state of the marketing industry, specifically as it pertains to realtors, everyone knows that leads have gotten a lot more expensive in the last, actually, not just the last five years, but the last two years especially. 

I used to do this webinar five years ago, and I said the same thing, “Holy cow, back in 2018 leads are way more expensive than they were in 2012 and 2013.” Let me actually take a second. Just shout it out if you've ever bought Zillow leads in the last ten years. Have you noticed that leads are way more expensive in 2022 than in 2015, 2014, 2017, whenever you started? Does anyone want to yell out? You can take yourself off mute. What do you remember if you were doing, let's say, Zillow or Realtor.com leads back in, let's just pick a year, 2015? What was the cost per lead approximately back then versus what are you observing now if you're still using Zillow? Anyone want to be brave? No one wants to admit out loud they're still doing Zillow or that they did? 

I'm not still using it, but I used to. It was hellaciously expensive for no guaranteed leads in my zip code. You were not guaranteed anything for an eighth of the zip code. It was $4,500 a month. 

Okay. You were paying about $4,500 a month. By the way, I will preface all this by saying it's not an anti-Zillow rant because I'm agnostic on marketing channels. If something gets you a positive ROI, I'm for it. If you can spend $1 and make $2, do it. It's not that I'm anti-Zillow or anti anything else, whether it's billboards, radio. I'm not sure if she's on here, but I just convinced one of our clients to go for a billboard strategy because she got a really cool opportunity on a major highway in her town, like a really, really cheap deal on a billboard. We came up with an epic idea to leverage the billboard with a retargeting ad. She'll get way more results from the retargeting ad featuring a photo of the billboard than the billboard will ever create. 

Once you understand, again, the strategy and the philosophy of high-hanging fruit, you can apply this to any context. I don't mean this to be a rant against Zillow. I'm agnostic on any channel as long as it produces a positive ROI. I think how expensive Zillow has gotten is almost like tracking the price of college tuition over the last 25 years. It's just so exceeding the inflation rate. 

Zillow can't just say, “Prices are going up for our Zillow impressions because of inflation,” because they've gone up, in some instances, 40%, 50%, 100% in the last five years. Why is that? Is it that the new management at Zillow came in and just decided arbitrarily, “We want to start making more money?” No, it's that there's always a limited number of people buying and selling houses. 

You have to ask the question, “Where does Zillow get the leads from?” Just keep going back, process of elimination. Where does Zillow get the leads from? Almost all of Zillow's traffic comes from Google. When you're buying Zillow leads from a marketing strategy perspective, you need to think of it, “I'm really buying Google leads.” Zillow is just a middleman. The same thing is true of almost every other major marketing program out there, whether it's Sync, BoomTown, Realtor.com, almost all of them primarily are getting pay-per-click leads through Google. They're all fishing from the same pond. If everyone's fishing from the same pond, then there's a limited number of buyers and sellers out there, especially in the last year where transaction volume has declined, in some markets, 20%, 30%. 

I just saw a stat from the Mortgage Bankers Association that mortgage originations are going to be down this year on track for 50% lower compared to last year. Now, much of that's driven by, obviously, refis disappearing entirely. From a mortgage company's perspective, a dollar is a dollar. They don't care if that came from a refi or a purchase loan. A lot of mortgage companies are literally down up to 50% this year. There's basically fewer people buying houses and everyone is fishing from the same pond. That gives these companies the ultimate pricing power because it's a lot of realtors out there chasing a dwindling number of leads. 

You might think that you were getting your leads again from Realtor.com or BoomTown or Zillow, Real Geeks, whatever, but you're really getting it from Google because that's where they're getting it from. They're just a middleman, like a retailer who charges a markup after they purchased their goods from a wholesaler. The wholesaler in this instance is Google. 

I've never been a fan of Google pay-per-click. I probably will continue not to be a fan of Google pay-per-click in the future because it's basically an auction system. There's really no room to let your personality and your marketing skill give you better results. There's no opportunity for alpha, to use a finance term, in a Google pay-per-click marketing. It's just who has a bigger budget. It all works on an auction based algorithm. 

When they designed the Google pay-per-click algorithm, it's supposed to mimic a live auction where people are bidding on certain keywords. “I'm willing to pay more, so I'm going to rank higher. I'm going to get more clicks when people search for that keyword.” If you think about it, that's not really a game you want to win. If you start getting a lot more clicks and leads, it basically just means that it's because you were willing to pay more than someone else. It doesn't mean those leads are better, it just means you were willing to pay more. 

If they raise the price and you have to pay more and more in the future and you think, “I need this amount of lead flow to hit my goals. If the price goes up, I guess I'll just have to pay more,” and then you end up spending more money on Google ads, it's like trying to put out a fire by pouring gasoline on it. The moment you up your ad spend on any of these platforms, you're sending a signal to the Google algorithm that, “Hey, someone out there is willing to pay more money for this same amount of leads.” You basically set a new higher floor that from now on that's the minimum price they're going to charge. You've set the precedent essentially that someone is willing to pay that for these basket of impressions or these basket of leads. I've just never been a fan of that. There's not really any creativity or skill that goes into it. 

If you write a really genius ad or video script for Instagram or Facebook, that can get you really, really good results, even if maybe you don't have the biggest budget of an agent in your community. Google is the opposite. Google is basically whoever is the most capitalized wins. To me, that's just not a very interesting way to do business and nor is that a game that I want to win. I would rather compete in an arena where your marketing skill and your relationships in the community actually matter and give you a competitive advantage. That's why Platform is all in on social media. 

At a philosophical level, I don't view us as a social media marketing company, which may be surprising to a lot of you on here. You're like, “What you guys mostly do is Facebook and Instagram.” I just view right now, with the current media options we have, Facebook and Instagram ads as well as putting videos on YouTube, that's the best opportunity we have, the best options available for executing this high-hanging fruit strategy. Who knows? Maybe a year from now, there's some teenager who's developing the next great social media network or website that we'll all start using. It's not even live yet, but it'll go live in 2023. By 2024, we'll all be using that thing, whatever it is. We don't know. It's just that right now, Facebook has about 80% of people aged 30+ using it regularly domestically here in the United States. No other channel, really in the history of advertising, has had that level of mind share and saturation. 

In the heyday of radio back in the ‘20s and ‘30s, you couldn't reach 80% of people on one channel. That was never true of TV, whether network or cable, satellite. It hasn't been true of internet advertising up until this point. There's really never been a channel that had that level of saturation, is 80% of people you can reach with Facebook ads. By just simply uploading your videos to YouTube too, which we do, if someone does search on Google, you're gonna have some SEO going for you just because the videos are on YouTube, even if you're not running ads. Obviously, Google owns YouTube, so they favor YouTube in search results. This trifecta we have of Facebook, Instagram, YouTube really, really covers all the bases. 

The other reason, because I have people ask me this a lot of, “Why are we so focused on Facebook, Instagram?” is that Facebook gives you a different advantage over other social media channels in that its user base uses, or I should say doesn't really use other channels, but almost every person who uses another channel, whether that's LinkedIn, TikTok, Snapchat, really any of them, Twitter, almost all of those people, the stats vary from each one, but it's usually 80% to 95% of users who use Twitter, LinkedIn, again, Snapchat, TikTok, they also use Facebook. 

Basically, by focusing on Facebook, you're also reaching all those people who might be using those other channels, but the inverse is not true. It would just be overwhelming to think, “Hey, I need to have a well-executed strategy on TikTok and Snapchat and Twitter and LinkedIn and Google and YouTube and Facebook and Instagram.” No one's going to do that. Most of you have a hard time doing your marketing homework every week just for the Facebook ads. I just rest assured with the peace of mind knowing that if we focus on Facebook, you're almost checking all those other boxes. There's so much overlap on the Venn diagram. 

That's why we focus on Facebook, is because today, September, whatever it is today, in 2022, Facebook is where it's at. There's really no other marketing channel that's even close to challenging Facebook for supremacy. There's not even a close number two. If Facebook ever starts fading away, we will see it coming from a couple years away because no one comes out of nowhere. Facebook has now been going for, I think they've had newsfeed ads for about ten years now, is when they rolled that out. I think it was 2012. It took a long time to get momentum. Same thing with Snapchat. Snapchat didn't come out of nowhere, neither did TikTok. It took a couple of years where people thought it was some weird dance app that people would do coordinated dances. Now, obviously, it's evolved into being more of a short-form video content, but TikTok got going over two years ago. 

As of right now, as much as I have a love-hate relationship with Facebook because of all the Facebook page shenanigans we're dealing with right now, I would love for them to have competition. I would love for Facebook to have legit competition that we can start testing stuff on other channels. There's really no one else. There's no one even in the arena that's even close to Facebook. 

As we develop these ads, the analogy I use is fishing upstream. What high-hanging fruit needs, if I could just distill it down to a marketing thesis, is that we want to generate leads and get them on your retargeting list months before other realtors would ever think to market to them. 

If you think of the timeline, most people start doing research six to nine months ahead of time. I used to say four to six months, but I've now realized that's not true. It's six to nine months. In this age that we're in, where everyone's on their phones all the time and everyone watches Netflix or Prime or HBO overnight on their computer, people are on screens more than ever, and they've started to use Zillow as a leisure activity. People just look at houses, even if they're not planning on moving to see what's on the market. That research starts earlier than it ever has. 

The way to think about Google and all of those marketing companies that are essentially derivatives of Google, which is Zillow, Realtor.com, and all the other ones, they're just getting their leads from Google, they're just a middleman for Google leads, that is what I call low-hanging fruit. Normally, low-hanging fruit has a positive connotation. It means the easy leads to get. The argument I'm making is that that's true in theory, but in practice, if low-hanging fruit means the leads you get from Zillow and that's where all the competition is, like that's where the other 99% of realtors are fighting over those leads, getting the same Zillow leads, trying to call them faster than other people or hauling expired listings the day they expire or door knocking on FISBOs, if that's low-hanging fruit, I think, ironically, it ceases to be low-hanging fruit at that point if that's where all the competition is. That's actually the hardest place to convert leads because of all the competition. 

We want to position ourselves in such a way that we're almost generating leads in a vacuum. We're generating leads with an inherent monopoly because of when we're generating the leads, that's six to nine months before they're really actually ready to do anything. This is why it makes lead conversion interesting in the Platform strategy. Usually, you generate a lead and they're not like, “Hey, let's go look at houses this weekend,” or "Hey, I'd love to have you over to look at my house,” what we call a listing appointment. Usually, that doesn't happen. That's several, several months in the future. 

If right now, it's September, often, you'll get leads that straight up aren't looking to sell their house until May of next year. What are you going to do in the meantime to stay top of mind with them? We all know the answer is retargeting. Many of us haven't thought about how the strategy is working at a high level in the first place, like why we're generating leads that early. That's what I call fishing upstream. 

Imagine a river and you and a bunch of friends are fishing. You cast your lines in and you're all basically competing over the same area for fish. It's a zero sum game at that point. For you to win, someone else has to lose. If you catch a fish, it means your friend can't catch that fish because you're all in the same general area. 

What would happen if you went 100 ft. upstream? You catch the fish before they ever get down to where everyone else is. You have a monopoly on that area. All of a sudden, there's no competition. That's really what we're doing with this high-hanging fruit strategy. It's why we generate leads and we tell you you don't have to follow up hardcore with them. If you get 200 leads a month, you don't need to personally message every single lead. You just reply to the ones that are warm enough where they're interested to talk to you and then you trust the retargeting is going to keep you top of mind with the other people. 

Lead generation, or I should say lead conversion, becomes a lot easier the more you commit to high-hanging fruit because you're probably six to seven months ahead of time. You're probably the only realtor they're talking to. That was a pause for dramatic effect. Six to seven months ahead of time, you're probably the only realtor they're talking to. Even if you don't think of yourself as being good at sales, you don't have to be in the context of high-hanging fruit. 

That's why I think this is beautiful, is that even if you're not a Grant Cardone alpha, I've studied all my sales scripts and I'm a hardcore closer, just by generating leads ahead of time and running retargeting, the conversations just happen much more naturally because there's no pressure. You know that person's not actually ready to go for four or five, six, seven, eight months. You can have casual conversations. 

If you're the only agent they're talking to, you'll just convert more of your leads just because of that fact. Even if you're bad at sales, if you're the only one they're talking to, it's just not hard. That's what we're trying to accomplish with this high-hanging fruit strategy, is getting the leads in your retargeting list ahead of time, so that by the time they're ready to go, let's say it's five months into the future, so about 100, 150 days, that'll mean that they've hopefully seen 150 posts from you. They're probably seeing retargeting ads pop up every day. 

If they opt into Zillow at that point and other realtors start bombarding them, that's the difference between them actually choosing to work with you versus you losing that lead. If they've seen you that often and you've had a couple of email back and forth or text back and forth or a quick phone conversation already, they're not going to feel pressured to work with some other realtor. They feel like they know you. The earlier you generate the lead, the higher your conversion rate is going to be. 

I think a lot of us sometimes forget that this is actually a three-step process. I think a lot of us think it's only two steps. We all know that “Hey, we have to generate leads and then we create content for retargeting.” We think that this third step here, which is when homeowners actually reach out to you and they start referring people to you and you get business, the real business growth happens in step three here. We think that just happens from creating content. 

There's actually the second step of creating the content of the retargeting ads where people are seeing all these photos and videos of you. That's what develops a personal brand in your community where people over time start to get to know you, they start to recognize your name, they start to recognize Brian Quinn or Tim Chermak or Becky Urdeck or Patrick Furman, that they actually recognize your name. That doesn't happen instantly. That takes weeks or months for them to start to familiarize themselves with your actual name. 

People start to feel like fans because they know what your hobbies are, they know what some of your favorite restaurants are, they know what's an awesome vacation you went on. Maybe we wrote a retargeting ad about that or your favorite sports team. They feel like they're getting to know you, and then, and only when that happens, does step three happen, where it leads to business. I think a lot of us think that business comes from retargeting ads. There's actually this intermediate step of you start to develop a personal brand. That's what leads to step three. 

A mental model to think about it is, step three, which is your business actually growing, is the effect of the effect. Step one is a cause. Step two is the effect of that cause. Step three is an effect of that effect. Without getting too into the weeds of the semantics here, it's like happiness almost, where people will ask “What is the meaning of life? How to be happy?” All these terms are really difficult to nail down because different people have different definitions. 

“How to be happy?” It's really hard to answer that question. What we do know is that if you just pursue things in life that are fulfilling to you, whether that's travel, or your marriage, or maybe you're passionate about your church, or you're passionate about being a really great coach to your son's baseball team, whatever, maybe you're an artist and what really fulfills you is making time to create art on nights and weekends, if you pursue what fulfills you, happiness just happens as a side effect. It's a really great side effect of doing what makes you feel alive. The question to ask isn't, “How can I be happy?” It's, “What can I do that gives me fulfillment and helps me feel alive?” If you do that, happiness just happens as a side effect. 

It's the same thing with your business and marketing. If you're asking, “How do I grow my business?” That directive of question is misleading. That leads us to taking shortcuts like, “I'm just going to buy leads. I'm going to get these low-hanging fruit leads from Google pay-per-click, from Zillow,” because we think we can just skip step two. 

The real answer to that question, “How do I grow my business?” is like, “How do I build a personal brand in my community, where my name starts to become recognizable, where when people think Alpharetta, they think Brittany Ovi, or if people think of Spearfish, they think of Ashley Goodrich?” If you just focus on building that personal brand and creating content almost as if you're a media company and you're trying to win a popularity contest like, “I'm trying to build my personal brand. I'm not trying to build my real estate business, I'm not trying to get a bunch of closings, I'm just trying to become as famous as possible in my community where I'm a local celebrity and I do that by creating tons of content.” I promise you, if that's the mindset you take, number three, just takes care of itself. 

If you truly start developing a personal brand in your community, number three just happens. That's why we can't just rely on lead generation ads. I've said it on a ton of phone calls before, but lead generation is the easy part of marketing. It's so easy to set up homes list ads and lead generation funnels, or even filming a listing video and then creating an opt-in where they can't watch the video until they give us their name and email. It's easy to generate leads. That's why Zillow is in the business of selling impressions and they're a billion-dollar company. Their business model is actually very, very simple because it's easy to generate leads. The hard part is actually converting all that lead flow into business that ends up working with you and not some other realtor. 

Depending on what study you look at, there's the actual lead conversion rate is sub-1%. When most agents look at how many leads they generate over the year, it's sub-1%. Honestly, that's fine. That doesn't alarm me because the most important metric in that calculation is what's the cost per lead? As long as you're making money on the marketing you're spending, it really doesn't matter. What that should tell you is that lead generation is not the thing to focus on. Lead generation is just a necessary evil In the process. What you should be focusing on is building a personal brand in your community of people that are following you, they get to know you, they recognize your face and your name. If you do that and you become a local celebrity by playing this long game, again, number three takes care of itself. 

Focusing on number two also has a convenient side effect of, it's obvious that you can't build that personal brand overnight. It's obvious that you're not going to be able to do that in two weeks or even, frankly, two months. You're not going to become a well-known person in your community just because you ran some retargeting ads for 90 days. I think everyone intuitively understands that probably takes six to twelve months. It just helps you focus on that and keep that proper mindset that “Hey, I'm playing the long game here.” 

If you psych yourself out of, “I have to generate leads and do all this work. It might take 12+ months to work,” a lot of people just won't do it at all. Just realize it's a three-step process here, not a two-step process, but number three is almost out of your control. You have control over the first two because the third step here is really just an effect of the effect of number two. If you build that personal brand and that reputation in your community, number three basically follows from that. 

Another way of thinking about high-hanging fruit is that the way Platform is running your ads is that it's really a temporal strategy, not a marketing strategy. This is a fancy word that just means time, temporal time. It's really more of a way of thinking about the timeline of your business than it is any specific marketing tactic. We are optimizing always for six to nine months ahead of time. That means, right now, we're more focused on how can you build an epic pipeline over the fall and winter so that, yeah, hopefully, you pick up some business over the winter. It's really about optimizing for 2023 at this point, because you're probably not going to run an ad right now where someone clicks on your ad and they want to go sell their house this weekend. 

This is what separates the men from the boys in marketing and in business, is that too many people right now, too many agents, especially with the headlines in the news, the Fed is expected to raise rates coming up by either another 75 bits or potentially even 100. They probably won't stop until the Fed funds rate exceeds the reported inflation rate, which could be mid-next year, late next year. 

I highly doubt they're gonna stop raising rates anytime soon because Jay Powell is a conservative Republican. He was appointed by Trump. He's an inflation hawk. He's not going to be like the previous Fed presidents like Bernanke and Yellen, where they really had a policy of free open money. They wanted as much liquidity as possible, so they kept rates lower, way longer than they should have. That's not how Powell sees the world. He wants to basically fall in the footsteps of Volcker, where inflation is really, really a bad thing. We want to nip it in the bud before it gets worse. 

The interest rates are going to keep tightening the economy, honestly, probably for the next year. It's actually never happened that the Fed has stopped raising rates before until the Fed funds rate exceeded the official inflation rate. Right now, they're not even close. For that to be true right now, the Fed funds rate would have to be in the double digits, basically. We are very, very far from that. That would take another two years at the current rate of raising rates. Either inflation is going to have to come down a lot or they'll have to raise rates a lot or a combination of both. 

All of that to say things are going to be really tight this fall and winter. This isn't a message of optimism of, “All the economy is going to be hunky dory. November and December and the next year will be amazing.” It'll probably be pretty tight over the winter, which is why I would focus on building that personal brand in your community so that you pick up whatever business might come your way in Q4 of this year and early Q1 of next year. Really, what you're mentally thinking about the finish line that you're focusing on is spring of 2023. 

What most agents are going to do in the coming months is they're freaking out. They see the transaction volume is down. They're going to cut their marketing spend. Just logically think about this, if your business has slowed down this year, because it has for many people, a ton of agents have not hit their goals this year or some of them aren't even close to the goals they thought they were going to hit this year compared to their production in 2022. 

If you're behind where you want to be for your goals, would the logical next step be, “I should stop marketing. That makes it more likely that I'm going to hit my goals,” or should it be, “I should stay the course or perhaps even increase my marketing because I'm not hitting my goals?” 

It'd be like if you were trying to lose weight and you'd been going to the gym for several months, dieting, exercising. You thought you're doing a good job, but you just really weren't hitting your goals and you thought it would happen faster. You might be tempted to quit diet and exercising if you don't have a six pack after two months, but ask yourself, what makes it more likely that you get a six pack? That you quit diet and exercising or that you simply just keep doing it because it's taking longer than you thought it was going to? 

That's basically what's going on right now, is it's just an issue of timeline. If you can only see a month or two in the future, you are going to be very pessimistic. I want to be as blunt as possible on this, the economy is probably not going to get better in the next 90 days. It may not even in the next six months. It's going to continue to be tight because of the Fed policy of trying to eliminate inflation. They're trying to avoid a 1970s scenario where they let their foot off the gas too early, and then inflation persists for basically a decade like it did in the 1970s. They're trying to be as aggressive as possible to get rid of it, so we can heal and just suffer through the hangover and get on to living with inflation under 2% again. That's why Powell is going to be so aggressive on this. 

If I'm you, I'm thinking, “I want to keep going hard over the winter, creating content, building that brand, because a lot of realtors are going to drop off over the winter.” I fully expect that next spring, there will be 25% fewer realtors than there were this spring because 25% of your competition will have literally quit. When I say quit, I don't mean slow down their marketing spend. I mean quit as in they're no longer a real estate agent. They gave up and they found a job somewhere else. 

We talked about this in our last Zoom Mastermind, where, typically, the agent count is a lagging indicator of transaction volume in the previous year. That's the way it worked in 2008. It's been true at other times too, where if transaction volume goes down 30%, usually within a year, there's 30% fewer agents. It just takes a year for that to show up because agents survive on their savings. They think, “Hey, maybe it'll get better.” 

If you were one of those agents who was only doing five or six or seven deals a year and the market tightens up and now you're only doing three or four or five deals a year, a lot of people realize they can't survive on that. They just quit. If you can keep the pedal down and keep investing in ads and keep creating retargeting content over the winter, you're going to arrive in spring of 2023 with less competition. Just, automatically, your business is actually going to grow because there's 20%, 25%, 30% less competition for all those listings and those buyers. The same marketing budget you have now actually gets you better results because people just have less agents to pick from, there's less noise, less competition. 

That would be my mindset is yeah, of course, hopefully, you pick up a bunch of closings in October, November, December, January of next year, but that would not be how I'm evaluating the ROI of my marketing investments today. I would really be thinking about, “I'm investing today to have as epic of a spring and summer 2023 as possible. I know that other agents aren't doing that.” 

Other agents are going to slow down or completely eliminate their marketing spend over the winter because of all the things I just said about the Fed and markets are tightening and mortgage originations are down upwards of 50%. A lot of you have had your lenders call you in the last month or two saying, “Hey, I know I was contributing towards your marketing, but I think I might have to pull back on that because things are tightening up.” That's what everyone else is doing. 

Back in high school football, I remember our coach is telling us, “If you ever don't want to come in and work out, if you ever don't want to come in and lift weights in the summer, just think of St. Cloud Tech and think of Sartell. I promise you they are coming in the summer and lifting weights." When we call an ISO play up the middle and you have to meet the Mike linebacker head on head in the gap, you're going to wish you had lifted in the off season because he's going to blow you up. 

It's the same thing in business and in marketing. Think of what your competition is doing, or in this case, not doing, and it gives you a sense of wellbeing and optimism of like, “I'm doing something that they're not courageous enough to do. I'm going to keep building my brand over the winter. I'm going to have a kick ass spring and summer in 2023.” Often, the same investment you make can have a completely different ROI simply because you're viewing that investment with a different time horizon. It's a deceptively simple concept that seems like no-duh-captain-obvious, but it's actually very, very profound. 

If you were to ask anyone that's in the Platform hall of fame what was their ROI of platform within a year, most of them would probably say it's positive or mildly positive, or maybe it was breakeven. There was really no breakaway case studies of, “Wow, my business tripled or quadrupled within ten months or even within, sometimes, thirteen or fourteen months of the Platform system.” At some point, typically in that second year, things all of a sudden explode. 

The point I'm making is that when you understand this, it's not that anything changed in that second year, the strategy didn't change, it's that time is an ingredient, not a metric. All the marketing they did that first year took until the fourth or fifth or sixth quarter with Platform to pay off. It was the money they spent early on that created those future dividends. It wasn't that they started doing things differently the second year and that's why all of a sudden their business blew up the second year, it was all the work they did in the first year that created that. It was the original investment they made that just got to the point in the time horizon where it was going to start paying off. 

In Minnesota, most people are planting in April and they harvest at some point in September or October if you're planting corn. It would be like a farmer in Minnesota who plants in the spring and then looks at their field in August before they've harvested. They're like, “Shoot, my ROI this year is zero. I haven't had any return on investment from all this corn that I planted in April. Zero, my ROI is zero,” when in reality, there's just a natural time cycle to that investment. That's, obviously, again, it's a really obvious example of agriculture and farming. I think the same thing is true of marketing. You just always have to have a longer time horizon than your competitors. That alone is a life-changing competitive advantage if you're just always thinking six months in the future compared to how your competition is thinking. 

As we look forward to the fall, winter, and we keep this long-term perspective with high-hanging fruit, I'll leave you with these quotes from my friend T.K. Coleman. He was actually one of the co-founders of Praxis, and now he's a host on The Minimalists Podcast. He actually has a documentary he produced that's on Netflix right now with The Minimalists. I was actually just talking with him at a conference last month when I was in Vegas. He's just one of the most inspiring people I've ever met. He's just the coolest guy ever. 

He posted this on his Facebook page several months ago. I copied it and I saved it because I thought that's just a really profound way of thinking about challenges. I know you guys can read, but I'll also read this out loud because I think there's just power in this. “If you're having a bad day, look in the mirror and say, ‘If they were to make a movie about my life, this would be one of the most interesting scenes. This is the part where I refuse to be defeated by resistance. This is the part where I refuse to abandon everything I believe in merely because things aren't coming together for me as easily as I had expected. This is the part where I choose to be a champion of imagination rather than a victim of circumstance.’” 

Think about just all the negative things that have happened this year with interest rates doubling and listing inventory being so low and you working with buyers who dropped out because, now, they no longer qualify to buy a house in the neighborhood they want to buy in both because prices went up and the cost of borrowing went up. It's been a tough year. A lot of you aren't hitting your goals this year because of what the economy is doing. Get up, get out, and get on with your life. The existence of drama doesn't make your story, the exercise of determination does. 

I think the most interesting part of this quote is, “If they were to make a movie about my life, this would be one of the most interesting scenes. This is the part where I refuse to be defeated.” What all movies have in common is that the protagonist faces a challenge. If the protagonist never had a challenge or something they had to overcome, it would just be a really boring movie. The whole point of what makes us interested in watching a Netflix series or going to see a movie is that they have to overcome some challenge. That's what makes it inspiring and interesting. 

I view the coming months as the same way in the real estate market. There's going to be a ton of mortgage companies that go out of business. There'll probably be some real estate companies that go out of business. There's definitely going to be a lot of individual real estate agents who give up and they say, “You know what? I just need to find a job somewhere. I can't keep doing this anymore. I need to find a job.” That doesn't have to be you if you increase the amount of content you're creating. 

You don't worry about growing your business. That's the big takeaway I want you to take from high-hanging fruit and this overview today, is don't worry about growing your business, worry about creating content and building a personal brand in your community and becoming a local celebrity in your neighborhood, just focus on that. If you focus on that, the business stuff will take care of itself. 

One thing that Walt Disney always said, and it was later echoed by Steve Jobs and John Lasseter at Pixar, was that quality is the best business plan. If you focus on quality, the money takes care of itself. I just think the same thing is true with this. If you focus on number one and number two from that previous slide, number three, which is the part where your business really, really grows, it just happens. It takes care of itself. 

You could ask our Platform team. I've never really set goals for Platform. We don't have an annual growth goal. We don't have any sort of metrics we're trying to hit with, like the number of clients we want or our profitability or our gross revenue or any of that. We honestly don't have goals. It basically breaks every rule you would ever be taught in any business course or business book about the importance of writing down goals and everything. We honestly don't do that. I just focus on, “Let's be the best marketing company we possibly can be, constantly write cool ad concepts and come up with new innovative strategies to help our clients succeed. If we do that, I think the business stuff will take care of itself. We'll probably get referrals and we'll probably grow.” That's happened. I think it makes life a lot more simple when you focus on just the cause and let the effect take care of itself. Hopefully, that gives you guys a little bit of an overview of high-hanging fruit. With that, I will shut up and we'll open it up to any questions or clarifications that anyone might have.