The New York City real estate game is usually of interest only to New Yorkers. Let’s limit that a bit more, restricting this interest to those New Yorkers who are actively seeking a new apartment. Of course, to those unfortunate souls forced to navigate the bureaucratic nightmare that is real estate agents, security deposits, and credit checks, there is no section of the paper read with more fascination and urgency than the one covering real estate.
But what does the competitive landscape of one city’s real estate agency have to teach us about marketing? A whole lot, in fact. Here’s Christine Haughney, covering the dramatic changes in that one city’s real estate advertising for The New York Times:
In 1989, Pamela Nichols, a broker who now works for Prudential Douglas Elliman, received an exclusive listing to sell a one-bedroom penthouse at 2 Sutton Place South for $725,000 (the equivalent of $1.275 million today). On Oct. 8, 1989, she published a single four-line advertisement and did not provide prospective buyers with photographs before they visited.
“You literally described the apartment to them on the phone,” she said. “Until you met them at the building, they didn’t see anything.”
Now she is reselling the apartment for $1.65 million. After Ms. Nichols put it on the market in April, she drafted a 10-line advertisement, hired a professional photographer, designed a full-color handout and promoted the apartment in luxury publications like a Hamptons magazine.
This change is not altogether surprising. As the dollar values of these apartments and homes have grown, the customers who are expected to spend these dollars have naturally started investing more thought and energy toward ensuring the quality of the deals they receive. But even beyond this expected trend toward greater accountability for higher-priced transactions, this is a textbook case of the continuing education of consumers. I don’t think Seth Godin had this particular industry in mind when he had this to say about the two types of marketers in the world, but he may as well have:
A few benefit when they make their customers smarter. The more the people they sell to know, the more informed, inquisitive, free-thinking and alert they are, the better they do.
And most benefit when they work to make their customers dumber. The less they know about options, the easier they are to manipulate, the more helpless they are, the better they do.
[snip]
You’ve already guessed the punchline–if just one player enters the field and works to make people smarter, the competition has a hard time responding with a dumbness offensive. They can obfuscate and run confusing ads, but sooner or later, the inevitability of information spreading works in favor of those that bet on it.
What Godin describes here is obviously a long-term strategy, and those types of strategies tend to favor marketers with the vision and the patience to execute them. But the payoff is huge. Imagine going back to the old ways in the New York real estate market. You wouldn’t sell a thing.
How are you educating your customers? And, more important, how is your business designed to appeal to an educated consumer?
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