Marketing vs Prospecting – Where Should You Be Spending Your Time and Money?

Aren’t Marketing and Prospecting The Same Thing?

This seems like a weird post title. I mean, aren’t marketing and prospecting the same thing? NO! They actually only have 1 major thing in common… Both are used for lead generation. Other than that, they work very different and should be used in different proportions at different points of your career.

I travel around the country talking to thousands of real estate agents, mortgage brokers and lead generators from a number of other industries and one of the biggest mistakes I hear over and over again is when people use the words “marketing” and “prospecting” interchangeably. Let’s have a closer look at each.

What Is Marketing?

Most of us can give examples of marketing but not really define it. Here is my definition and thoughts on marketing. Marketing is a passive way of getting a message out to the masses. Here are some examples of marketing….

Advantages and Disadvantages

There are several reasons why lead generators are so partial to marketing. First and foremost, it’s pretty easy to do. You create a message, decide who you want to send it to, how you want to send it to them, pay for the delivery (usually) and let it fly. Neat and simple. No one to talk to, no one to say “no” to you or even hang up on you. Just a quick delivery and you sit back and wait for your phone to start ringing. Right? Well…… in theory, that’s true. However, there are also some disadvantages to marketing that you need to consider. Two of the largest disadvantages are that marketing is usually very expensive and that is amplified by by the fact it takes a very long time to show a return on your investment.

The 2 words I try to remind everyone of when they are about to kick off a marketing campaign are “Patience and Consistency”. You will spend a lot of money waiting for the marketing to gain traction, and then you will wait even longer for that traction to turn into incoming phone calls. The truth is that most people give up on marketing long before it can ever become effective.

What I’m really saying here is this:

Don’t start any marketing campaigns until you are financially solvent enough to pay out for several months (maybe even years) with no money coming in on the marketing campaign.

Prospecting

Prospecting is another form of lead generation, and to be honest, it’s much more efficient than marketing, especially if you are new or don’t have a big budget. Why? Because it is action oriented. The best way to explain what I mean is to look at some forms of prospecting. Notice that each of these activities focus on the prospector to be actively looking for business by being face-to-face or voice-to-voice with everyone we are prospecting to.

Calling, door knocking and networking are the hallmarks of prospecting. If forces the lead generator to get out there and talk to people. The goal is to ask the magic question… “Who do you know that is looking to buy, sell, or refinance a home?” The answer will almost always be “no one” but that’s OK. We don’t do this to get leads, we do this to get “Top of mind” (Click here to find out what Top of Mind is).

Here’s another really important factor when thinking about prospecting. In almost every example above (except for the parties) it is substantially less expensive than marketing.

What Are the Negatives of Prospecting?

There are only a couple of downsides to prospecting. The first one is rather obvious… It takes considerably longer to prospect than it takes to market. After all, marketing allows you to send a message to hundreds or even millions of people in moments, but prospecting makes you do it one-at-a-time. Prospecting definitely saves you money but it costs you time! The other negative of prospecting is it’s uncomfortable for a LOT of lead generators. You have to get use to hearing the word “no” a LOT! (Click here for more on the power of the word “no”)

OK, So When Do I Prospect and When Do I Market?

Good Question. After all, this is probably why you’re reading this post so let’s get to it…. Check out the image below. It does a great job of showing the differences between marketing and prospecting. A quick look at the list will show you that marketing saves time but costs money, and prospecting saves money but costs time. Furthermore, prospecting shows a faster return on your investment, which means you will start earning money faster. Marketing, however, is a lot more comfortable for people because there is no “one-on-one” activity.

Like the answers to most of the questions we cover on this website, it is kind of obvious once you break it all down.

If you are a new agent, or an agent who is not making a lot of money and has more time than money you should absolutely certainly focus almost 100% on prospecting! Why? Well, look again. It takes longer to prospect, which shouldn’t be a problem because you probably have more time than money at this point in your career. it also gets you paid faster, and I’m sure you don’t need me to tell you why that is important. It also helps you move forward in the industry without having a spend a lot of money that you aren’t making yet.

Finally, it’s a lot easier to get over the discomfort of having to hear “No” over and over when you compare it to not being able to pay your bills.

As time goes on, and the prospecting starts to pay off (and if you do it consistently it WILL pay off), you will begin to work more and more marketing into your lead generation. It’s a great way to leverage your time and spend small amounts of the money you earn. (Remember to always use “stop and go” spending techniques… Click here to learn more about “stop and go” spending)

If you have twice as much time as money, do twice as much prospecting. If you have twice as much money as time then do twice as much marketing.

If you have any questions or comments, please leave them below.

Marketing vs Prospecting – Where Should You Be Spending Your Time and Money?