Home Financing Ninja

The Great Debate: Discounting Commission and Building a Niche, Part Two - Plant City, Florida

Yesterday in Part one on my three part series about the Debate of Discounting Commission in Plant City, FLorida, I spoke about what I thought was the basic reasonings (arguments) of the whole discounting commission debate.  As I mentioned, it seems to be a hotly contested debate.  Some people would not do it whatsoever, others might.

To them I would say, 6 bilion coupons users, cant be wrong.  Look at Groupon.com - They have 34 million opt-in's

I did some more thinking about this, especially after doing some review about discount brokerages and Redfin.  I remember starting to read that thread a few months ago.

Let me first warn you, this is NOT Redfin.  I am not suggesting to any real estate agent that they rebate a full one percent or greater of their commission, especially if they work for a larger brokerage who is already getting part of the commissioned fees.  The highest my model will discount is $10,200 (based on a $1M listing (both buyer and selling)and a three percent commission).  Nor do I claim to know everything.  All I am giving is food for thought of something that is working for me.

Yesterday I parted with a question that after 40 view and 30 clicks, no one else seemed to dare answer (Maybe they did not get that far down in the article).  So I am going to ask it again

Would you as a realtor or loan officer being willing to give up 17% of your commission if your local insurance agent (or CPA, or divorce attorney, or Financial Planner or Title Company) that you do business with came to you with their entire database for you to market to?

Let me ask another way.  If I called you and handed you a lead with a stipulation of 17% referral fee to be paid directly to the client? (Don't try to lie, you know that you would JUMP at the chance)

Today, I will give your some pointers on database building with this concept, Discounting Your Commission - Plant City, Florida.  It is my belief that he (or she) who has the biggest database will win (as long as your are consistently following up with that database)

Would you rather want to market to a 5000 person database or to Ten 500 person databases.  It would be much quicker to do the latter, rather than build, develop, and cultivate to 5K members.

One important factor that this business model must have is being able to invite other professionals into and marketing to their databases.  Now I am not referring to the whole discount argument.  There are a surprising number of agents and professionals (insurance, stagers, mortgage, warranty, etc) that do not do this.  Do a joint video with your favorite professional with a call to action of visiting each other for thier needs.  (Such as an insurance person telling to visit the realtor for all the specific needs a realtor can fill and a realtor telling thier database to check out the insurance person - You are smart, I am sure you understand what I am saying)  This can also be done in the community with a local HOA board president, PTA person or principal for your local school, or an elected official.  Key Point Have the other person send the video / email out to their database since you are going to send it out to yours

My favorite is the local fitness center.  I offer coupons and leave a letter for members of the local fitness center and I send that same coupon (as determined by the fitness center) to my database also

This same idea can be done with other professionals - Professionals are defined as the following: Tax Preparers, Attorneys, Financial Planners, CPAs, Tax Attorneys, Bankruptcy Attorneys, Realtors, Mortgage

Others to include would be the AVON lady down the street (or any other similar type).  Your own nieghborhood and those nieghborhoods of the partners (listed above)

Now Here is where it gets fun - Offer this to a certain niche.  A local city (see Plant City Home Benefits - Plant City, Florida), the military, a certain military base (if there is one close to you that you can visit) your city's hometown heros (police, fire, first reponders). 

Most of us are members of the local chambers of commerce, BNI, Kiwanis, etc. Last but not least however, don't forget the employers in your city or state. Offer this as a Corporate Real Estate and Mortgage Benefit to your local employer.  One stop shop for buying homes, selling homes, home related services, professionals, etc

Oh no, that would never work.  I hate to say that it does.  It does not work on it's own at first - You have to tell the masses (Build it and they will come)

So lets look at the numbers of the Database

Insurance Database                                        2000 members average
CPA (working with business clients)                   5000 members average
Local Businesses (Mom and Pop)                         10 members average
Home Service Provider                                      300 members average
Local Police Dept                                              100 officers
Major Area Business                                        2000 employees

Total So Far                                                    9410 new members for you
Ratios     (One deal every 200 people)                  47 new deals

All because you offered a small amount of you commission as a discount if that company endorse you as the go to professional.

In my next article, I will cover what you need to have when rolling something like this out.

If you found this of interest, and better yet of use, please reblog this out to help with my link building.