Facebook and Real Estate / Property Sales
Posted on Wed, Nov 10, 2010
Is Facebook a bandwagon?
In 1848, Dan Rice, a famous American circus clown of the time, used his band-on-a-wagon and their music to garner support for his political campaigns. As he became more successful, other politicians desired a seat on his bandwagon, hoping to be associated with his success and the term “jump on the bandwagon” became immortalized in history.
Until recently a Face was something you saw in the mirror, a Book was something you paged through and Tweet was what canaries did. FACEBOOK and TWITTER however, are SA’s best known and used social media platforms. Used daily by millions, worldwide, it comes as no surprise that estate agents have quickly moved to use these mediums to advertise property.
However, has jumping on this bandwagon been successful? That depends on which wheel you are looking at.
In logic, an argumentum ad populum ("Appeal to the people") is a fallacy that argues that something is true simply because many people believe it. From which one could draw the conclusion: many property professionals are advertising on Facebook therefore it must be a fantastic selling tool.
Indeed, hundreds of estate agencies joined Facebook this past year and thousands of estate agents market their listings on their pages. Yet property sales in South Africa are not exactly booming. Latest data out from the South African Property Transfer Guide (SAPTG) reveals a 6% decline in sectional title sales and a modest 11% increase in full title sales in the year ending July 2010 compared to the previous year. The data is revealing. While single digit rises in both average and median property values are encouraging, they are beginning to taper off from their highs in Q2 of 2010. We cannot, however, blame TwitFace for this. Despite modest rate cuts, our fragile economy remains in recovery mode, constrained by debt deleveraging and tight lending criteria.
Another angle: in microeconomics, the bandwagon effect defines the interactions of demand and preference. This effect arises when people's preference for an item increases as an increasing number of people buy it. Relatively pricey yet wildly popular commodities such as iPhones and X-Box consoles are typical examples. Real-estate, on the other hand, is not. It is subject to third-party influence, notably the state of the economy and the (un)willingness to extend credit by financial institutions. The bandwagon effect can disturb the normal theory of supply and demand, which assumes that consumers make buying decisions solely based on price and/or personal preference.
So can social-media really help create demand and sell more properties? The answer is YES! Yet only a handful of agents are seeing positive results. Slapping 20 house listings on your Facebook page and waiting for the fish to bite is not going to net you the kind of commission you may be after.
Internet psychologist Graham Jones explains: "The psychology of sales involves a part of our brain known as the prefrontal cortex. Brain scans show that when someone is in the “I’m going to buy this” mode of thinking, their prefrontal cortex is lit up like a Christmas tree. When you have buyers sitting in your office, smiling and about to sign the sale contract, you can be sure that their prefrontal cortex will be firing on all cylinders.”
Jones further asks some intriguing questions: “So, what can you do online to get a house-buyer’s brain into 'buying mode', and stimulate their prefrontal cortex? Studies confirm that if you talk about your clients and their interests, rather than your company’s history, prestige or service, then a sale is more likely. So, if focusing on the house buyer achieves more sales in the 'offline world', why is it that most estate agents do the exact reverse, online?".
Clearly, it is social media abuse to load property listings on your Facebook page or invite all your ‘friends’ to every show-house event. You may soon destroy the very fan base you so eagerly seek. Clients know where to go for listings – an estate agency’s website! Rather, what is needed is something more human, more appealing. Listen to your clients, ‘eavesdrop’ on Twitter and Facebook conversations about property buying, listen to their needs and experiences, then join in and offer specific advice and information. Guess what? You will light up their prefrontal cortex, making them more receptive to your sales pitch.
To summarize: Social media should not be limited to advertising property listings or estate agency’s services – instead, treat the social media bandwagon like a customer service and public relations tool that allows for building a loyal following of clients who appreciate your regular engagement with them. Use it to be a change catalyst – someone who refashions the public’s negative perceptions of estate agents, one person at a time by your professional work ethic. Use it to change the way you think about selling property!
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And here are some tips to riding the wagon:
• Keep it Simple (no space for FarmVille)
• Be Authentic (less pushy, more engaging)
• Build Relationships (it takes time)
• Relevant content (current and consistent)
• Keep business and private pages separate
• Monitor traffic daily (adjust, adjust, adjust)
Dieter Deppisch
Business Insights R&D
Knowledge Factory