Why Choosing A Target Audience Is Crucial

Before you can start marketing to prospects, you have to know who you’re marketing to. That means uncovering the types of people that are inclined to buy your service, what their motivations are for buying, and why they might buy from you or your competitors.

At any given point, only a small percentage of the population will have a need for your services. As a licensed real estate agent, you’ll have to narrow that down further to doing business in the states you are licensed. But simply picking a geographic area isn’t specific enough in most cases.

I once talked with an agent who was trying to decide who to target. He lived about an hour away from two major metropolitan areas - one with 1 million people, another with 750,000. The small town he lived in between the two had about 3000. Like many agents starting out, he wanted to “cast as wide a net as possible” without excluding anyone - and that meant he was overwhelmed. Where would he start? How could he, as a new agent with a minimal budget, reach almost 2 million people continuously?

The short answer is that he couldn’t. Unless you have hundreds of thousands of dollars set aside for marketing and advertising, targeting 2 million people is impossible. For the purposes of simplification, let’s assume that on average there are 4 people per household, so 500,000 homes in the area. If he was to send out postcards to each home at the current USPS postcard rate of $.24, that’s $120,000 in postage alone!

And that wouldn’t take into consideration any of the production costs of creating the postcard

• The time it takes to design the postcard and write the copy (and the cost of hiring a designer or copywriter)
• The printing including paper and ink
• The mailing costs besides postage such as labels or any other charges your printer has

Perhaps you might get your unit cost per postcard with printing down to $.27 per postcard, but that’s still $135,000 to reach each of the 500,000 households once with a 4×6 postcard. Let’s now say that the average price in that area is $300,000 and you receive 1.5% for each client. That’s $4500 per client. In order to simply break even on investment on that mailing, you’d have to generate 30 new clients.

There have been numerous marketing studies that found that it usually takes 5-7 contacts with a prospect before they even start to remember who you are. Rarely is one type of marketing technique effective on its own, and while you’ll probably get a few inquires by sending out your postcard to that many households, it won’t be nearly as cost effective as if you chose a subset of those people and frequently marketed to them.