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May 2007 |
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Dear Friends and Clients, Exasperated with the hype of today’s advertisements, I started to list the current ads that really bug me. Then it hit me… I realized they all work. They wouldn’t still be on-air if they
didn’t sell the product or service. That got me thinking. What made these ads, so
obnoxious to me, so effective in the marketplace? Below are a few of the
ads I originally listed. Can
you spot the common threads? I’m especially annoyed by the lender ads on radio and TV, maybe because I deal with loans everyday. Particularly aggravating are the ones proclaiming they have the lowest rates in town. There’s only one company with the lowest loan rate in town! Since rates often change hourly, it follows
that the company with the lowest rate in town also changes. Then there are the companies touting no loan closing costs (they get the yield up by increasing the rate, add costs onto the loan, and/or balloon, etc.) Or how about the lender offering a singularly low rate? Don’t worry. You or your circumstances don’t qualify. But they do have this other program that
would work for you… Or how about the companies that push those
debt consolidation loans? What
a great concept – convert the loan on your car (or clothes,
appliances, or whatever else you charged on your credit card) so
you can pay for them over 30 years – long after their useful
life has ended. And the company that has lenders competing for your loan? Great… the rate you pay is below the national average! Oh wait, just the average, huh? Not below the median?
Hold on, what loans are included in the average… only
loans with similar credit ratings, or all loans including C
& D paper that carries the highest interest rates? Guess that’s really
not so great after all… Especially when you consider the company originating the loan pays about the same as everyone else does for funds… but then has the extra expense of what they paid to the company doing the advertising to buy your name (lead). Of course, real estate has it’s own crew of “hypesters”. You’ve probably seen the ads that state
“your home sold in X days or we pay you $1000”. You probably already
know the ploy: inflate the fee by $1000 over what they would
normally charge and then obligingly agree to reduce their
commission by $1000 if they don’t obtain a buyer in the time
period specified. My… doesn’t that instill an air of confidence in their sales ability? Here these fine folks are willing to risk $1000 on the improbable chance they don’t manifest a sale immediately. But you didn’t really think they were going to actually pay you $1000 at the end of X days did you? Check the fine print You’ll find it comes out of the commission… if and when your home sells. Another way to look at is they charge an extra $1000 if they get lucky and your home sells quickly. Discount real estate services are an ever-popular discussion topic these days. Why pay a real estate agent when all they do is put your home in the multiple listing service (MLS)? “We at XYZ will do it for less and/or we’ll refund back part of that inflated fee!” Just like Vegas - Everybody is a winner! Oh, you mean they forgot to mention there
are now companies who will put your home in the MLS for free
just to generate phone traffic? Buy one, get one free. Really? Can I just have the free one? Coca-cola was introduced in 1886 as "a valuable brain-tonic and cure for all nervous afflictions." The examples are endless. So what do you think is going on here? To me, it’s kind of like Vegas. All come close to offering something for nothing – and all fall short of telling all the pertinent facts. People are smart, 1. Make an outrageous, sensational offer targeted at human frailties. 2. Give people a shred of hope the offer just might be the answer to their problem. 3. Reduce the perception of risk in the offer to nil. Then normal skepticism and due diligence take a holiday. I’d love to hear your thoughts. The market continues to ebb towards normalcy. No sudden spikes either way. Moderate job growth continues, and interest rates are inching upward, but only slightly. Prices continue to move slightly up, but with fewer sales. Days on market are starting to noticeably extend. Days on market (DOM) for homes in north Pierce County are double what they were for April last year. New construction DOM has more than double compared to April of last year. Builders with homes in the higher price ranges holding completed inventory are starting to reduce prices. The stats for the Federal Way and West Hill of Auburn areas are similar, although DOM hasn’t extended as much. There is little new construction activity here as the area is already mostly built out. Spring Time… Finally! Does it seem like spring was bashful? But now my field is
plowed, vegetables are in, and the sun returns. It’s a good time of
year. That “bugs on the back of the throat” insect festival has returned now that I’m back bicycling the Interurban trail. You’ll recognize me easily... I’m the one who’s huffing and puffing clawing my way back into shape while spitting out the winners. Each year it’s a little bigger mountain to climb. The marking of a milestone My nephew is graduating from high school
next month. He’s
the youngest of my sibling’s children, another generation. It goes by so quickly… I hope this finds you and your family well. Lee Mason
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