The Phoenix residential real estate market represents a great opportunity to individuals, families, and investors who are weary about the stock market and are realizing that their investment portfolios are too exposed to fluctuations in Wall Street. By now, the reality has sunk in with most people – the stock market’s decline has hit 401K and other retirement investments hard. As a result, this is a critical time to for individuals, families, and investors to rethink diversification of their portfolios again. Portfolios need to be more highly diversified than ever before.And it’s time to rethink real estate as one component of your diversification in the future in addition to stocks, bonds, commodities, international investment, and low-risk savings instruments, to name a few.Wall Street, Main Street, and My Street, and Real EstateThere is no doubt that the goings-on in the real estate industry are intermingled with the market challenges that Wall Street is facing, which in turn impacts Main Street and “My Street.” But the issues with real estate largely emanated from the many corporations that make up Wall Street combined with lack of government oversight and inaction. Lack of personal discretion also contributed to the problem.Having said that, here is why real estate should be a component in your investment portfolio once again, and why the Phoenix real estate market is an excellent choice for investment to help you diversify that portfolio.First, due to the wave of foreclosure-related properties, prices have declined to 2004 and even 2003 pricing levels. This is pricing that is pre-run up. Though there is a risk that prices may drop further, the extent of a further decline may be limited in the short term while the long term outlook gradually gets stronger.Second, real estate can prove to be a more reliable investment in a normal market environment. Prior to the run-up in home valuations in the second half of 2004 through 2005, annual home appreciation in the Phoenix residential real estate market averaged 5%-6% . Playing the long game as investors should, holding a property for 5-20 years could yield a solid return.Long term is key here. The investor has to be committed to a lower but steady return on their investment when it comes to real estate. The Phoenix housing market will not likely experience a meteoric rise in valuations like it did again. That’s not to say that there won’t be some opportunities to turn properties fast (whether through acquisition at a foreclosure auction or wholesale, or a flip), but this model will have the high risk that most investors will and should shy away from.One note here. At least in the Phoenix area, investors have to weigh the merits of investments in homes and real estate by several components to get a true picture of the return on a property. These factors are growth in appreciation, rental income and offsets, tax benefits, and equity paydown and buildup.Third, real estate is real. You can see it. You can touch it. You can check up on it (if you buy locally). And it will always hold some intrinsic value no matter what happens. If you have a home in Chandler, it is easy to get across the Phoenix area, to check up on an investment property in Glendale. Or, perhaps the investment property you choose is right next door to your home in Tempe.Fourth, under certain circumstances, real estate taxation on capital gains growth can be minimal. The same cannot be said of many other investment vehicles.Fifth, an investor has much more control in determining the value of the property. Smart improvements and renovations combined with effective property management can increase the value of the property substantially.Sixth, the Phoenix area continues to grow. The Valley saw a 2.8% increase in the number of residents here last year. This trend will continue as Phoenix and surrounding areas are perceived as a stable, optimum climate to live and to work. With the decline in real estate prices, this perception will also be reinforced by a sense that Phoenix and surrounding areas are once again affordable.Finally, real estate can serve a dual investment/personal objective. For instance, an investment in real estate can serve as a later gift for children. Or, it can be utilized as a sort of savings plan for children’s college tuition as a complement to 529s and Coverdell plans. The investment could be a retirement property for later in life. Real estate investments can also be used to create income streams to live off of (when rents and equity buildup eventually turn the property cash-flow positive).There are numerous reasons to invest in real estate even beyond this list.Real Estate Has A Role to Play in Your Investment PortfolioThe difficult truth about the stock market is that over the past eight years, the U.S. economy has seen two major disruptions or recessions that were severe enough to have rippling effects for all Americans as seen by the decline in 401K and other retirement savings values. As a result, further diversification of investment portfolios is needed across many different asset classes with a regional focus as well.Real estate should be one of those classes. Given real estate has seen real substantial pricing declines over the last three years to levels seen before the run-up period, one has to consider that there are real deals in the marketplace for real estate. Coupled with the right long-term outlook and commitment to investment fundamentals, real estate can have a more effectual, countervailing purpose in investment portfolios that can help Americans better weather substantial market disruptions in the future. For investors looking for specific markets that may be worthwhile to investigate, real estate in the Phoenix area is a compelling choice.
Whether you are a $500M+ global company in a mature market, or a small startup trying to establish a market presence, marketing and advertising expenditures need to be carefully planned and carefully tracked. In my experience, the former is done 90+% of the time and tracking is done almost 0% of the time.Yet, for most companies, there are few dollars available to waste on uncertain and unprofitable ventures and radio advertising in particular is often put into this category. Why is this?Radio advertising is often misunderstood and when it is used, it is often not tracked properly and thus assumed not to be an income generator. But for many businesses, it is the best medium for generating new business.Radio is stable, personal and has an average of six distribution systems (sets) in every household.It reaches 99 percent of the people every single week. It can be heard while simultaneously doing something else. It’s in most places of employment, most homes and nearly all cars. When executed properly, radio is cost efficient, and produces excellent results for advertisers.If you were to ask a group of top advertising executives to create the ultimate medium, I believe they would say the following:”The ultimate medium would be with all of the people, all of the time. They wouldn’t be able to get away from it. It would have many forms of distribution so that it would continually be around them. It would create a personal connection with them. It would always be with them when they wanted it; they would never have to go out of their way to get it.”Cable, television, print, direct mail, billboards, and on-line services cannot meet all of the aforementioned requirements. But radio can and does.Here are the eight “must dos” for a successful radio advertising campaign, and a word about what doesn’t work:Rule 1. Know what you want to accomplish
Rule 2. Know your demographics
Rule 3. Get tracking systems in place
Rule 4. Harness the power of one
Rule 5. Sell with intimacy
Rule 6. Remember that creativity doesn’t always sell
Rule 7. Prepare NOW for future success
Rule 8. Develop a comprehensive campaignRule 1. Know what you want to accomplishIn determining to add radio to your advertising mix, the very first step is to determine what you want to accomplish. Are you prospecting? Branding your image? Promoting an event? Seeking immediate sales? The energy, style and repetition of an ad is determined by the goal. Whether you are planning a 13-week image campaign or a two-week “blitz” for a special sale or event, start with the end in mind and work back from there to develop the style of ad that will accomplish your goal.Rule 2. Know your demographicsWhat placement you buy and where you buy it depends upon your advertising objectives.Who are your customers/clients? Men? Women? Young? Old? Before you advertise, learn who they are. Radio station selection for your campaign is all about knowing your potential customer.Radio is demographically selective and retains a high degree of loyalty among its listeners. It allows an advertiser to reach specific target markets, at different times of the day with individual messages.Radio is medium-priced. Depending on your market, radio advertising can be scheduled, produced and aired without breaking your financial back.Radio advertising provides for message flexibility. You can pick out target markets, get a message to them quickly with enough repetition to generate awareness and easily change your message depending on your results.Rule 3. Get tracking systems in placeBefore you start your radio campaign, get your systems in place to track its effectiveness – just as you should with any marketing or advertising campaign. Make your staff aware of the message in your advertisements as well as where and when they are airing. When customers call or visit, ask them how they heard about you. If you have a website, ask them there. Get in the habit of surveying. As long as it is not cumbersome or time consuming, most people are glad to know a business is concerned about building relationships and developing services that are helpful to the them.Rule 4. Harness the power of oneRadio is a personal medium. Listeners tune in to hear their favorite presenters. Unlike television, most radio listening is done alone. The presenter is a friend, a companion in the home or in the car, the intimate environment where the advertising message is heard.Rule 5. Sell with intimacyIn your personal life, when you have something very important to communicate to someone, which would you prefer…to show them a picture, write a letter, or talk to them with the intimacy and emotion of the human voice? As we get less and less personal connection in our society, the sound of the human voice becomes more and more important. We remember voices and people.Saatchi and Saatchi funded a research project – The Ironing Board Survey – and found that, even after just one hearing, around one third of respondents remembered the names of the products/services they had heard advertised. Commercials on radio are consciously acknowledged and remembered.Rule 6. Remember creativity doesn’t always sell”Creative” is a relative term. But in media terms, most people think of special effects, interesting sounds and clever dialogue. All of these are commendable elements and certainly have value in the proper context.But the real question for a business owner developing an ad is, “will this piece accomplish my goal?” Remember, you are competing for attention in a noisy marketplace of messages. Creative and clever don’t matter if your message isn’t heard and more importantly remembered and acted upon.More ads would do better to apply the old adage, “less is more.” With technology so consumer friendly, almost anyone who knows computer basics can put together copy with sound effects. It takes experience and discipline to shun the easy route and instead focus on copywriting and production that SELLS, not just entertains.Rule 7. Prepare NOW for future successThe return on your advertising and marketing dollars is determined by how you treat your customers today and how organized and committed you are to your ongoing marketing plan.
Six months from now when you decide to produce a testimonial ad featuring satisfied customers – will you know who to call? When you go to determine what radio stations best address your demographic – will you know your customer demographic? When you are trying to decide what benefits of your business to highlight to future customers – will you know what benefits your current customers value?Your advertising and marketing plan requires consistent attention and follow-up. Regularly survey your customers to find out why they give you their business. Build relationships and approach satisfied customers now about providing testimonials for you whether in print or via audio.
With just a little planning you’ll be way ahead of the competition. Most companies don’t survey their customers and when the do the results are either not reviewed or not used. If they were, don’t you think you would have much better experiences with the businesses you encounter?Rule 8. Develop a comprehensive campaignHere’s the most important tip to larger returns on your advertising and marketing dollars.
With your knowledge of your industry and the feedback you receive from customers, determine the advertising mediums best suited to your business. Then develop a budget that allows you to be consistent in the deployment of your plan.Radio is a very cost-effective way to get potential customers to call or visit. But in addition to budgeting and planning for larger ticket marketing mediums, don’t forget other programs and outlets to support your media efforts.Here are a few often forgotten but effective marketing possibilities:1. Customer appreciation/incentive programs
2. Offering free seminars, consultations and demonstrations
3. Trade shows, exhibits & fairsIn addition to the basic collateral of business cards, brochures and informational web sites, these programs can be useful in developing and maintaining customer relationships.But it can’t be stressed enough, whatever marketing and advertising vehicle(s) you choose, be consistent, plan carefully and test every program for its effectiveness.A word about what doesn’t work…Often businesses first trying radio advertising will want to test it with just a short run of spots – say, 10 to 15 plays. Success in advertising is about repetition and that’s particularly true for radio advertising. It’s better to wait and save for a proper deployment (20 to 50 plays) than to rush into a campaign that will fail and cheat your business out of a valuable revenue generating tool.Are you ready to grow your business? With these rules in mind now is the time to launch your successful radio campaign.