56 ideas to beat the recession

The overseas property industry got rich on the back of the dreams of the British middle classes. The dream is over. Well, for now anyway. The teachers, policemen, plumbers and electricians are reining in their discretionary spending and overseas property is the ultimate discretionary purchase.

By now I’m sure you will have cut overheads and tried to diversify your business away from the UK middle market but is there more you can you do to ensure you’re one of businesses that survives the shake-out?

Here are 56 ideas, tips and general principles to help guide you through the choppy waters ahead. Thanks to everyone who helped with our research.

Strategy

1. Work out which customer segments you are targeting. There are still people buying overseas property but their profile and their needs have changed.

2. Diversification is all very well but if you are not playing to your strengths it is extremely risky. Always try and match opportunities to your strengths. A good example is Burgundy4U. They have a good branch network and local knowledge of Burgundy and owner Benjamin Haas spends much of his time promoting this expertise to buyers and potential partners in Germany, Holland and Denmark.

3. Be careful not to over-estimate your own strengths. This is common (I’ve done it) and is often the foundation for huge strategic cock-ups. See also point 29. A strength is something that you have that is valuable to customers that your competitors don’t have. If you have two, you are doing well; if you have three, you’ve probably got it wrong.

4. Identify potentially fatal weaknesses. The opposite definition to above. Do your best to address them but if you can’t, make sure your strategy doesn’t play to them. Common weaknesses are lack of budget and scale relative to larger competitors. If you suffer from this make sure you define the niche you work in very carefully.

5. Play your strengths to your competitors’ weaknesses. High-profile London estate market Foxtons has just moved into the area where I live in southeast London with a huge direct marketing budget and a no commission initial offering. The market leader, Streets Ahead has responded by communicating their local heritage and expertise on flyers they hand out to commuters at the train station. Both are excellent examples of playing strengths to competitor weaknesses. If you play tennis, Winning Ugly applies this principle brilliantly.

6. Always consider the opportunity costs of your actions and decisions. What you don’t do is as important as what you do.

7. If you are changing strategy, take your time and seek advice from people you trust to be honest. Strategy can be extremely difficult but always appears simple with hindsight!

Remember the scarcity principle

8. Profit comes from scarcity power. Your ability to build barriers to entry will ultimately determine how financially successful you are. It’s your brand, your networks, your databases and your branch network that competitors find it hard to copy. The cliché “location, location, location” is derived from this principle.

Pricing

9. For resale agents, hold commission rates as high as you can. High commissions are even more important in low volume markets especially if you sell in the UK where commission rates are low. If you sell in the US, Spain or France where rates are around 5-6% there is obviously more scope to trade price against volume.

10. Show evidence of price reductions. It’s a buyers market and everyone’s looking for a deal.

11. Lead with your most competitively priced and attractive properties in all marketing activity.

12. Source and package new-build and off-plan property with low deposits and guaranteed returns. There’s still plenty of demand for these types of products according to Nick Marr, CEO of HomeGoFast.com.

Flexibility

13. Derek Charles Denham, owner of Catalunya estate agent MondeProperty, survived the 1990s recession. He says “the key to survival is flexibility on the side of the seller, agent and the buyer”. Do everything you can to encourage buyers to make an offer and sellers to reduce their prices.

Steal ideas from the competition

14. David Stanley Redfern states “you should invest in being the best or you might as well give up”. You can’t be the best without applying and improving on the best ideas of your peers. He mystery shops five or six competitors a week. “I can do the voice of a man or woman, so I have an advantage,” he says. “If you get a call from someone that sounds half-Indian, half-Welsh, it’s probably me. I can’t do accents.”

People

15. The highest value activities in business are building relationships (sales and marketing) and building/sourcing products that are valued by customers. Identify, recruit, motivate and create opportunities for people who are good at these things.

16. Employ people that are better than you. This isn’t always possible but it’s an important principle, especially when they fit into either of the categories above.

17. Minimise the wage bill for anyone who does not fit into these categories. Derek Charles Denham from MondeProperty says all his staff have to be 100% sales orientated, “…even the cleaner”. All his sales staff do their own admin.

18. Create systems that allow you to minimise admin and therefore reduce overhead.

19. Understand the local labour market for the skills you need and be flexible. David Stanley Redfern employs educated and talented people on high basics because his team need to deal with sophisticated investors. Your overall business strategy and segment choice should inform your judgement in this area.

20. Create performance culture. Reward exceptional performance publicly. If you are a large enough company, create quarterly awards that people really want to win.

21. Never employ your family, friends or partner unless you are absolutely sure they are the best person for the job. It can work, but nepotism is potentially corrosive to performance culture.

22. Felix Dennis advises that external staff should be at least 30% better than internal candidates for you to consider recruiting externally. This seems like a great rule of thumb. It encourages performance culture and keeps knowledge in-house.

23. Put new staff on six-month probationary periods. It can take a long time to realise how bad some people really are.

24. Recruit people that compensate for your own weaknesses. Luckily I don’t have any!

25. Play to people’s strengths. People are generally much more productive doing things they are good at rather than compensating for their weaknesses.

Finance

26. Never let your IT Manager get a large doner kebab through on expenses. It happened at one of previous employers and they went into administration. To suggest there is a causal relationship is admittedly tenuous, but it was the thin end of the wedge.

27. Set an example to staff by taking public transport rather than taxis.

28. Always try and secure funding BEFORE you need it. Cash flow problems weaken any negotiation position.

29. Always make mistakes with someone else’s money.

Get people to talk about you

30. Word of mouth is the most effective form of marketing. Be careful about over-promising and under-delivering. If you can, manage expectations then over-deliver on them. This is especially important where you have repeat buyers, for example if you are targeting professional investors.

31. Incentivise customers to refer business. The MRI customer referral scheme accounts for a large percentage of their sales.

Generating leads from your website

32. Write down all the objections to a sale you have ever come across. Look at your website. Do you address these objections? Your website is effectively another sales person. The more objections you overcome, the more leads you will generate. Waiting for your Cat to Bark is great book on this subject.

33. The biggest objection to overcome is, why should I use you when there are thousands of agents out there doing a similar thing? Make this obvious on your homepage and if you can in your page titles. Homes Overseas do this well.

34. Appearances can be deceptive. I know a multi-millionaire who chose a well known overseas agent because they had an impressive website. As it turned out, he chose poorly, but there’s a lesson in this. Invest in web design and look professional to build trust and generate leads.

35. Get someone to advise you on SEO BEFORE you build your website. Building your site incorrectly can severely inhibit your ability to rank on Google.

36. Read Don’t Make Me Think before you next design your website. It will take about an hour and applying the lessons should radically improve your conversion rates.

37. Create hundreds of pages using your database. For example, combine fields like <apartment> and <villa> with words such as <for sale> in the locations you sell in, like <cape verde>. If you do this correctly, you’ll get relevant natural search traffic with very few links. Insist on your web design company doing this as part of the price.

38. If you are serous about targeting new markets, invest in translation services and technology. This is especially important when targeting Russians.

Link building & PR

39. Always remember links are an exchange of value. What are you offering in return for the link? (money, content, credibility, etc).

40. Buy links in quality directories. See our Link of the Week feature.

41. Become a media slag. Build relationships with as many blogs and media people as you can. Offer editors interesting stories. If you don’t have time to do this yourself, employ a PR agency.

42. Submit your press releases to PR Web but make sure you have an interesting and newsworthy angle or you might as well burn $299.

43. Offer to write articles on blogs and media sites in return for a link.

44. Get someone famous to buy one of your properties or endorse your brand.

45. Interview someone well known in your field. For example, interview a local mayor and email the story to local bloggers and journalists.

46. Get sued. Not a great strategy on the face of it but the upside is you should get you a few links out of it.

47. Refuse to pay your bills after six months of polite requests.

48. Buy old property websites with good link profiles that are relevant to your business. Re-direct the pages that have inbound links.

Paid search

49. Make sure you email the Google Adwords tracking code to your web company/person. Ask them to put this on your “thank you for your enquiry” page. Without this you won’t know what is working and what is not.

50. If you manage your own campaigns, watch this video. It takes you through how to set up campaigns properly and gives some great tips.

51. Target geographically. Burgundy4U have generated four sales this year from advertising on Google Adwords in English to buyers in Denmark.

Property portals

52. Spend money only on portals that your customers are likely to use. This tends to those that rank well on Google for relevant phrases and/or have a strong brand. Search our independent profiles of property portals.

53. Test new portals for a minimum of three months with a small budget to see if they work.

54. Try upping spending on the most effective portals by buying featured advertising and property positions.

55. Shift budget from print into property portals and online advertising. The right portals can be effective at building local profile and brand awareness and it’s usually much cheaper than print.

Philosophy

56. Enjoy what you do and be passionate about it. Life’s too short and to paraphrase John Maynard Keynes: “In the long run, we are all dead anyway”.

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