What Domino’s can teach us about real estate marketing.

No serious low-carb freak should do it but sometimes nothing but pizza will satisfy.  Since there is a Dominos between my home and my office I sometimes call and order a pizza and pick it up on the way home.

The last time I did this something weird happened.  As I was into my second slice and washing it down with a glass of cold milk my attention was drawn from the magazine article I was reading.  The pizza was really good!

Much better, in fact, than what I had come to expect.  What was going on? The personnel in the store were still the same mumbling and bleary eyed guys I’d seen before making pizzas and walking from the nearby convenience store drinking from paper bags.

Later I noticed that Dominos ads were admitting that there pizza wasn’t that good and were changing the recipe and putting in better ingredients. Then I saw a tiny article on a business page that Dominos’ business had improved since the changes had been made.

All this brought back memories of a particular time.  I was an English major and have no academic marketing background and a good part of my long marketing career in banking was in product development which really means a lot of project management and procedures writing.  When I took my last job in banking as the marketing director of a regional bank I had more responsibility for promotion and pricing than I had ever had before.

Some things are best learned by teaching.

During that time I was asked to teach a marketing course by the local chapter of the BAI or the Bank Administration Institute. This involved introducing marketing concepts to ambitious bank tellers and customer service reps and getting paid a little bit to do it. But it also meant educating myself  about the concept of “the marketing mix” and integrated marketing. The BAI text  book…which is still within reach of this desk… was my introduction to the concept of the 4 Ps of Marketing, Product, Price, Place, and Promotion.

Place, of course, really refers today to the distribution system for a company’s products.

At the time, Dominos was revolutionizing the pizza industry with a very distinct distribution strategy…rapid and reliable home delivery.  For a while they guaranteed delivery within 30 minutes which was a strong strategic commitment until it became abundantly clear that encouraging already hormone stoked, lead footed teenagers to try to beat the clock was not a good idea.

Still, for my students, most of whom assumed that “marketing” was synonymous with “advertising,” it provided a good example of how a company could build its marketing strategy around doing distribution better than anyone else. Dominos pizzas were OK and its prices…not including tips to the delivery guys…were about the same as the other pizza chains.  They probably spent no more than the other chains on advertising either and kept their costs down by not maintaining sit-down restaurants. This worked for years until gradually the other chains adapted and started adding delivery services.

So now things come full circle. A rival chain that promotes “better ingredients, better pizza” is forcing everyone else to adapt.   My experience with Dominos’ improved pizza is one indication that they are shifting to a heavy Product strategy. When I picked up that last pizza I noticed that they also now have sandwiches and “pasta bowls.” I haven’t tried any of this yet…I really like pizza when I veer off the low-carb freeway…but I may in a weak moment.

Does that mean that pizza tycoons have given up on distribution strategies? Not at all. In fact, another big trend in the industry in on-line ordering. You even see some smaller chains going back to sit down stores. Amazing.

I can imagine some product planner way back in the day making a pitch with overhead transparencies (this was way before PowerPoint) to corporate leadership at Dominos to undertake this risky “delivery” strategy.  Delivery of pizza was a Mom and Pop strategy when Sal and Angela’s  kid was home from school in the world of pizza places.

Dominos adopted a  strategy that was thinking outside the (pizza) box, so to speak at the time. Residential real estate is at one of those inflection points when the old models will be turned upside down just like the pizza business was then.

My gut continues to tell me that the large real estate franchise operations will be the last to adapt and that most change will come from small companies and individual agents.

Hobbs/Herder says  “Lesson 1: You are the product; Lesson 2: Market the Product.” Well, OK, you do have to market yourself.  And that may have sufficed before the bubble burst.  But the next parallel to Dominos in real estate will come from companies and/or individuals that realize that with fewer qualified buyers you also have to market real estate…homes, shelter, communities,  not just yourself.

The 4 P’s provide a good framework for taking each listing and developing a marketing plan that will work. Developing and promoting best practices for that is what we are about here.

Writing about food is hard work.  It’s making me hungry…is it lunch time yet?

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Thanksgiving is often seen in the industry as the end of the fall season for selling homes and the beginning of the “dead season” during the winter months.

It’s not true.

I’ve often wondered whether this myth was purposely advanced by successful agents so that they could either 1) Take a little break themselves for the holidays or 2) trick their competitors into taking off the holidays so they could have an advantage soliciting listings.

There may also be a bit of self-fulfilling prophecy here as agents advise potential sellers to “not risk looking stale in the spring by marketing a home during the winter.”  There are lots of other excuses…it gets dark too early for after work showings, the holidays are just too chaotic , there’s too much Christmas advertising going on to get noticed, yada, yada, yada.

In my market the numbers do confirm that there is a sharp drop off during the colder months, on average for the last four years about 40%.  That four year period includes two pretty good years and the last two not-so-good years .But that means that there are still a number of homes sold during the winter months and the market is anything but dead.

When is the best time to put a home on the market?

The conventional wisdom is that the buyers come out in the spring. But if so many people wait  for the spring to list their homes then it simply means there is more competition among sellers during the spring. The more you dwell on the pros on cons of the different seasons the more you conclude that there are lots of exceptions to the rule.

The best time to put a home on the market is when the seller needs or wants to and when the home is ready to be marketed.

Being ready for the market is more important than timing. Apple didn’t launch the IPhone before they had crossed all the t’s and dotted all the i’s in their product development cycle.  That included hardware (really cool), software (even cooler), distribution (AT&T -not so cool), pricing (make the early adopters pay heavily before lowering the price for the masses) and promotion (start a buzz at MacWorld with Steve Jobs’ presentation and let word-of-mouth take over.)

A seller shouldn’t put a home on the market until the same level of preparation is accomplished. It’s a little different when the product is a home but the process deserves the appropriate analysis, planning and preparation. This winter too there are significant buyer incentives available from the government for both first time homebuyers and those “moving up” after 5 years in their existing home.

Winter is not a dead time in real estate. It can be very lively for those sellers who have a tightly integrated marketing plan for their home.

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The picture is of Annette Bening in the “glamorous” role of  a listing agent preparing for an open house in a vacant property in one of my favorite movies, American Beauty, where she starred with Kevin Spacey.

Almost everywhere, whether it is explicit or simply the practice, real estate agents represent either a buyer or a seller. Although there are many common elements of the real estate transaction that all agents must understand thoroughly, the services listing agents provide their clients and the optimal ways for them to attract business are quite a bit different than buyer agents.

Yet it is my impression most agents really haven’t spent much time thinking about the distinction or the consequences of approaching each role differently. In another post I mentioned that I had been involved with a company in the collectible figurine business. The “Place” or distribution system in the gift industry is dominated by “rep groups” which are companies that organize salespeople that take the product lines that the company lines up and service the gazillion gift shops and speciality stores across the landscape. This is something no small manufacturer could do by themselves. They use the marketing materials that the manufacturers provide and their skills are  primarily sales skills. They are often very successful and well paid.  But they are sales people and not marketers.

As mentioned, the companies that produce the gifts seldom deal directly with the stores that buy their products, much less the consumers that buy the figurines that we tell them to box up and store when their house goes on the market. The listing agent much more closely resembles the marketing director of the company or a hired gun from a marketing or advertising agency. They too can be very successful and make a lot of money.

My point is that they are two very different jobs. Agents that prefer being buyers’ agents may find an understanding of the 4 P’s of Marketing much less useful than a listing agent will. On the other hand, once they understand the principles, their preferance may actually change.

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