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Real Estate Marketing

Pareto’s Principle: What a dead old guy can do for your business today

(MARKETING) Realtors are no different than any other type of company and can use Pareto’s Principle to expand their business – same rules apply.

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Let’s talk Pareto

Pareto is many things. To start with, he is, or was, an extremely smart Italian dude. Vilfredo Federico Damaso Pareto (I have name envy) was an eminent economist, sociologist, philosopher and political scientist of the early 20th century. He has a rich and interesting legacy that I won’t get into here; suffice to say that in whatever afterlife awaits Italian economists, he’s probably a bit miffed that his prime legacy is a single simple rule.

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On the other hand, another of his legacies is that his work was a key influence on the economics of Fascism, so maybe he’s good with the rule thing.

Pareto’s principle

Which is good, because it’s a good rule, even for us non-Fascists. I assume you’re not a Fascist. If you’re a Fascist, beat it. The rule, Pareto’s Principle, is simplicity itself:

roughly 80 percent of effects in a given system come from roughly 20 percent of causes.

He came up with it after noting that 20 percent of the pea pods in his garden contained about 80 percent of the peas, then doing an in-depth survey and discovering that in the Italy of his time about 20 percent of people owned about 80 percent of land.

Peas?? What?

First, let me note that discovering peas were integral to the invention of modern economics as well as genetics has left me somewhat unsettled. What else do peas know that we don’t? If you’re a pea, write in. I have questions.
Second, a principle that applies with equal accuracy to peas and land ownership is either a) an enormous coincidence or b) a very big deal indeed.

It’s not a coincidence.

Pareto’s principle holds true in a genuinely scary number of situations. Corporations have started using Pareto as a rule of thumb, forecasting on the basis that 80 percent of sales come from 20 percent of customers. They’re almost always right. Tech folks expect around 80 percent of usage from about 20 percent of features. Again, usually right, and leads neatly to 80 percent of failures coming from 20 percent of bugs and 80 percent of complaints coming from 20 percent of users. Pareto is everywhere.

Obviously, real work is not an economics textbook.

Numbers are rarely that neat. But Pareto is right enough often enough that one group in particular can benefit from making it an a priori rule of thumb: salespeople.

Realtors above all benefit from a fast dose of Pareto

It all started with peas and land, remember? The Pareto principle was literally made for real estate. The American Genius has already addressed how Pareto applies to sales leads, but if anything it’s even more relevant to time management and legwork. The secret to real estate success isn’t scoring those golden Glengarry leads. It’s identifying your 20 percent.
It’s almost laughably easy to do, and very, very easy to neglect. Go over your numbers and see:

  • Who’s bought most?
  • Who’s bought most expensively?
  • Who’s bought most recently?

Find the overlap, the candy core of the Venn diagram. That’s your 20 percent. It may not be 20 percent. It might be 50 (right on!) or 5 (better hustle!). But either way, it’s where your money lives. Pareto at its worst – well, I covered the Fascism thing. But at its best, Pareto is Occam’s Razor, monetized. It cuts straight to where your money actually comes from, and where your effort is therefore best spent.

Go forth and count peas.

#Peas

Matt Salter is a writer and former fundraising and communications officer for nonprofit organizations, including Volunteers of America and PICO National Network. He’s excited to put his knowledge of fundraising, marketing, and all things digital to work for your reading enjoyment. When not writing about himself in the third person, Matt enjoys horror movies and tabletop gaming, and can usually be found somewhere in the DFW Metroplex with WiFi and a good all-day breakfast.

Real Estate Marketing

Dark data may be the key to your locked potential

(MARKETING NEWS) The key to a solid marketing campaign could be dark data if anyone can figure out how to actually use it.

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One trend that marketers and entrepreneurs alike are trying to utilize is the mining of dark data from social media. It may sound like something a supervillain in a made-for-TV movie may use to “hack the mainframe,” but it may be the crux of your next marketing strategy.

Research firm Gartner defines dark data as “information assets organizations collect, process and store during regular business activities, but generally fail to use for other purposes.”

This data is frequently unstructured, making it difficult to utilize effectively. Structured data is easy to analyze, it populates spreadsheets after a customer enters their information on your website and other clear roads of analysis.

Unstructured data, in contrast, is information that may be collected but its not utilized effectively. Almost 90 percent of unstructured dark data falls through the cracks and is never put to use. One big source of unstructured data is social media posts.

Customers will share insights into your business and brand through their posts about their purchasing habits. This is frequently done through not just through the selfie, but the captions associated with the photo as well.

A picture can tell a lot of information to people (what times of items you sell, their quality, and their overall experience) but the caption can help you understand more what their attitude towards those events are.

A picture may show an attractively plated meal, but the caption may talk about how there was a long wait for the food as well as poor customer service. These captions, and subsequent comments, can offer a keen insight into what people like and dislike about your brand called sentiment analysis.

Sentiment analysis can be utilized to understand attitudes toward your brand, and there’s multiple ways you can go about this. One method of analysis is through the building of word clouds which examine the most used words in a few days of dark data. Pro-marketers can easily pull dark data from those who like or follow a business’ social pages into software which can do the legwork for you.

Small business owners have some options that are less sophisticated but can still do sentiment analysis of dark data effectively.

The IProspect blog suggests to use “a blend of monitoring tools,” many of them free, to complete a sentiment analysis.

A better understanding of dark data means you aren’t limited to just basic social media analysis tools. With these concepts, you too can illuminate your dark data and shine some light on future prospects.

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Real Estate Marketing

NAR’s ad campaign about Realtors must be better because it’s on a roll

(MARKETING NEWS) The NAR’s Get Realtor ad campaign has been live for a few months now and though there aren’t concrete metrics, overall reception is A ++.

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The National Association of Realtors (NAR) wants you to not only just choose their members to sell you a home, but to change the public perception of who a Realtor is through their newest ad campaign. The NAR communications team says that the aim of the campaign is to “reimagine the R®” and to bring brand awareness to Millennials in particular, as the next generation of homebuyers “in today’s hyper-connected world.”

The Real Daily wrote about this advertising campaign launched in June, so we thought it would be great to check in with how the campaign is doing so far. Sara Wiskerchen, Managing Director, Media Communications at NAR told us that due to the campaign’s launch in June, the NAR does not have many hard metrics on it. However, they did say that first impressions of the campaign from Realtors and consumers alike was very positive and that there was a “significant lift in brand awareness and consumer intention to use a Realtor.”

The Real Daily reached out to several of our readers (7 Realtors, 3 brokers, and 11 consumers) and the response was extremely positive. One reader expressed that the campaign does more to modernize the Realtor and their line of work more so than “brand than any other in the past, and they were pleased with it.” A different consumer said watching them made Realtors more “relatable” instead of uptight and “unapproachably buttoned up.”

Throughout these spots, there is a theme of making the consumer aware that a Realtor is helpful for achieving the American dream of homeownership and that while homebuying is challenging, a Realtor can go above-and-beyond for making it happen.

“This campaign demonstrates how Realtors bring endless enthusiasm to the whole home buying ordeal.”

Big changes are sweeping the NAR, from the attempt to modernize their association through this campaign to the appointment of new CEO Bob Goldberg, still fresh in his first 100 days in the corner office. This trade association is committed to integrating itself into the American home buying process and is listening to the consumer to do it. “Getting Realtor” has never seemed so hip.

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Real Estate Marketing

Instagram is letting users pay for one of their most sought features

(MARKETING NEWS) Instagram is letting user pay for one of their most prized features. Can you say sketchy?

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Verification for sale

The “verified” checkmark that one finds next to the names of celebrities and public officials has become synonymous with trust. In a time of parody accounts and identity theft, it’s refreshing to know that you can look for that little blue mark and know that the profile you’re viewing is certified legit.

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So it’d be a damn shame if you were to find out that someone like, say, Instagram was allowing for the sale of verification rather than using a vetting system to ensure that those little verified checkmarks appear next to the correct names…wouldn’t it?

Check, Please

The little blue verification check is more than just a symbol of social media prowess. The perks for verification vary depending on the platform; for example, Instagram’s perks include things like higher search rankings and free promotion.

Naturally, this can create a bit of a sense of urgency for up-and-coming brands, figures, and companies that are just legitimate enough to merit a following, but (allegedly) not prestigious enough to earn the verified check mark.

The kicker is that, unlike on Twitter, one cannot request verification on Instagram—you must personally be invited to the cool kids’ club.

Pay to Play

As with any market ever, demand begets supply. In this case, however, the “supply” happens to be a black-market endeavor to purchase and sell those verified check marks for anywhere from three to five figures.

In Instagram’s case, the exclusivity of invite-only verification is exceptionally tantalizing for some, leading the average price to land far higher than pay-for-verification services on other social media accounts.

While Instagram’s official policy prohibits this kind of behavior (because of course it does), the frequency with which accounts are illegally verified is low enough that they seem to be treating it like it’s a non-issue.

Predictable Offense

Ultimately, though, paid verification is a dangerous precedent to set insofar as it gives people with money and the right circumstances an advantage over those hard-working brands that objectively deserve verification more than those paying for it—much like literally any other context in real life.

The bottom line is this: of course Instagram has a black market that sells something coveted and borderline unattainable, and of course people are going crazy for it. That’ll be the case in any market for as long as demand is a thing.

With that said, the next time you see that little blue check mark next to someone’s name on social media, treat it with a moderate dose of skepticism.

#PayToPlay

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