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Marketing Secrets From A Multi-Billion Dollar Producer

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That’s Right! Over 10,000 Homes Sold with Billions of Dollars in Volume over Chad’s 25+ year career in Real Estate! In 2021, his Team sold 896 homes with $276 Million in Volume! Chad’s highly profitable real estate machine is indeed, one of the best in the world. Chad Schwendeman leads the #1 real estate team in all of Central Minnesota. Jason and Chad discuss 3 of the 29 Marketing Mistakes That Real Estate Agents Can’t Afford to Make. They have a fun yet painful conversation on mistakes that have cost them huge profits. They also discuss If and When crypto currency will be utilized in real estate transactions, mainstream. Chad is a massive entrepreneur and they discuss how Chad has integrated multiple real estate pillars into his real estate business to deliver a “Disney like” experience for his clients while optimizing revenue and profit growth. Chad is an innovator in the Minnesota market with specialized programs that differentiate and add massive value to his external and internal clients.

They take a deep dive into Chapter 9 of The Ultimate Real Estate Machine: Huge Mistakes That Cost Huge Profits

Marketing Mistake #4 Not Articulating & Differentiating Your Preeminence Preemptively

Marketing Mistake #10 Not Leveraging the Power of Endorsements

Marketing Mistake #23 Stuck Doing What Works (Not Optimizing)

You’ll be shocked by several of Chad’s answers. Truly perspective-shifting.

Watch the episode here:

Listen to the podcast here:


Marketing Secrets From A Multi-Billion Dollar Producer

Chad Schwendeman Sells Over 10,000 Homes Through Strategic Marketing

I got another special guest. He is the Owner and the Team Leader of the Chad Schwendeman Real Estate Group with Exit Realty. He won Exit Realty International’s Group Top Agent Award and received the Tri-Real-A-Thon Award four years in a row. His tagline is indeed correct, “No one sells more homes in Central Minnesota than Chad Schwendeman.” He is known as one of North America’s top real estate agents. He is highly respected by the highest level of producers in the world. He masterminds, mentors, and brainstorms with the best in the world.

Thank you for joining us, Mr. Chad. How are you doing?

I am great, Jason. Thanks for the invite.

It has been a long time since I have seen you in person with all the COVID-19 stuff.

It has been a while, but we follow each other on social media, and we will get back to normal here before too long.

I have seen on your Facebook about crypto mining. What are you doing with that? If you do not mind me asking.

I have teamed up with some gentlemen. We are doing Bitcoin minings and the Antminer S17 Pro. We got 300 miners up and running, and it has been a lot of fun. Hopefully, the Bitcoin price keeps going up and not down. We are confident in the long-term that this is going to be a heck of a good investment.

Where do you think crypto is going to tie into real estate sales? Probably not, but when it does, how soon do you see that becoming more rampant in our business?

Smart contracts and technology are going to hit real estate in the next 3 to 5 years. We have built some spec houses. We are willing to take Bitcoin as currency on the spec houses, and you are seeing more of that. Bitcoin is gold 2.0. It is digital gold, and you have got the political system that is printing money like it is going out of style. It is a great hedge against inflation. We have seen real estate values go crazy, like in Miami, up 56% in 18 months. That is what we have seen in our market as well. I’m a big believer in Bitcoin and cryptocurrency. In the long term, it is going to be a fun ride.

How long did you become a believer in crypto? Was it immediately or did it take a while for it to catch on for you?

My IT guy at that time called me. He was in my office and he was like, “You need to buy this Bitcoin.” I said, “Show me what it is.” “It is digital money.” I’m like, “If I’m going to buy a coin, I want to see the coin.” He goes, “It is digital money and a mathematical equation. You should put in some money.” That was when Bitcoin was at $13. I did end up buying some at $300 and bought a lot more when it was at $1,500. If I had a do-over, that would be my one do-over. I should have bought quite a bit at $13.

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Marketing Secrets: Hopefully that Bitcoin price keeps going up and not down, but we’re confident long-term, it’s going to be a heck of a good investment.

 

The operation you have going there looks very high level, and it is not any of my business what it costs to put something like that up. I can tell that it was not cheap to have all that done. I’m excited for you. It is cool.

Anytime you are in Minnesota, I will give you a tour. It is impressive, and they are liquid cool. The computers are in a liquid. We can get the hash rate up. One thing with crypto mining is it takes a lot of energy. A lot of times, those machines put off a ton of heat. When you go into our facility, it is at 72 degrees. It is a different concept, but we are getting higher hash rates and it is more efficient and pretty neat.

I know very little about crypto. We are not going to make the interview about crypto but we are going to get in some cool marketing things because you are one of the best in the world in the real estate space and marketing. We will dive into some of that, but I have some good friends of mine that I have made in Miami. They are from the San Francisco Area, Palo Alto, the Silicon Valley, or whatnot.

They are venture capitalists and became friends of mine. They bought the patent for this windmill machine. It will end up replacing the traditional windmills that generate energy. It kills fewer birds, and they are more effective and efficient, but somehow they have tied it into the crypto space too. The reason why they come here is Miami has become the crypto capital of America type of thing.

Their mayor has been super progressive and taking some of his salaries in Bitcoin. I will be down in Miami on the first weekend in April 2022 for the big Bitcoin conference. That is a pretty big event.

How long have you been in the real estate industry?

I started in 1999. It is a little while. We have seen the good, the bad, the ugly.

How many homes have you sold through the years in approximate volume?

I would say over 10,000 homes. I have not thought about the volume. In 2021, we helped 896 families and made $267 million. It was a good year.

Where did that compare to 2020’s numbers?

We were flat. What was interesting is it is pretty even. The sales were down a touch, but our average sales increased. Like everywhere in the country, we are having inventory challenges. We are in a pretty small market. Brainerd towards the North of Minneapolis, and we go 60 miles in any direction. Our marketplace is under 100,000 people we serve.

The show is about the book, and it takes a deeper dive into the book. It is about building a machine that works harder for you versus you having to work harder for it. What does your machine look like as far as in regards to what is your setup? You have listing agents, buyer agents, staff, ISAs, no ISAs, etc.

Develop the passion about building things, businesses and diversification. Click To Tweet

We have four listing agents that only work with sellers. We have 12 buyer’s agents, 5 admins, 3 full-time ISAs in-house, a full-time photographer, and an acquisition specialist that we do a lot of buy it now. He’ll go out and meet with the sellers.

One of the cast members on my TV show that I’m mentoring and hosting, Agents on Fire, asked me the question. We are trying to outsource the ISA, which has never worked for me, but there is more than one way to skin a cat. I believe in being in-house. They are on staff and the payroll as well. What is your take on inside sales agents that are outsourced versus having them in-house?

I had had the same experiences you had had when we outsourced it. We got that Minnesota accent. Sometimes when they are from a different country, it does not resonate. They are set up immediately in our marketplace. The other thing, too, is managing the ISAs in-house has been beneficial for us to have those daily meetings, powwows, face-to-face, belly-to-belly, coaching and roleplaying, and all those things. I have had success keeping it in-house, whereas I have struggled to have it outsourced. That is my experience.

What made you decide to build a team to begin with?

I got to a point, as the independent agent, I could not keep up. In my best year as an agent, I did over 200 deals, and it about killed me. I did not have the capacity to do anything anymore and I didn’t have a home life. It was insane.

You did 200 deals by yourself in one year. You didn’t have a life, did you?

It was seven days a week and it was wake to faint. I have a very supportive wife and, at that time, two young kids. That is what I had to do to get where I wanted to go, and it got so big. I’m like, “I can’t support it myself.” I started bringing on the buyer’s agents. The next thing was a listing partner and admin along the way.

You have done an amazing job. Two hundred deals independently were the most that I have heard of. How many agents are in your market?

We are not a huge market, but both 600 agents.

How many agents do you have on your team?

Sixteen.

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Marketing Secrets: Blockchain technology is going to hit real estate probably in the next three years.

 

You have done a wonderful job. It is one of the best that I have seen of top producers in North America in creating specialized, innovative programs that are differentiated for the external client being the home seller and the home buyer. You probably have internalized special programs for your internal clients as well being your agents and staff. Would you mind telling us about some of that stuff that you do?

For our sellers, we have four different programs. The first one is the traditional method, which 90% of our clients use. We are going to market and get them top dollar. Our second program, which has gained a lot of traction, is our Buy It Now. We will make it Buy It Now, cash as-is offer, and the seller gets to pick the closing dates. They can leave and take what they want. We are going to buy it as is. That has been very well received in our marketplace.

The third thing is the guaranteed sale, which is if the home does not sell in 99 days, we will buy it at the agreed-upon price. In this market, things are selling in under a month, but for some people, in a market that is more buyers to sellers, this has been nice. For example, it is a $300,000 house and our guaranteed sales price is $260,000. If it sells for $290,000, they get to keep the difference.

Is that something that you added to the guaranteed sale program or is that a part of what you learned to guarantee to sell to BS?

That is what we added too. It is very attractive. The worst-case scenario is they know in 99 days it is going to sell for this, but the best case is if it sells quicker and for more money, they get to keep the difference. The last one we rolled out in 2022 with the Buy It Now is starting a construction company. We have nine employees in our construction company, but we will do construction for our clients and do up to $10,000 worth of repairs.

They can take advantage and get that profit. We get paid at closing. We did one in a small town and had about $12,000 into it. They turned around and had almost 3% ROI on that. They made a $20,000 profit. We sold it in two days, and everybody was happy. In that way, they can capitalize on the fixing and flipping.

It took me a while to grasp real estate. It did because I had come from other industries prior, but it is easy to get stuck in this industry of focusing on making income from the sale of real estate versus having multiple revenue pillars. Not only revenue pillars, but the right pillars should give your clients a higher level of service.

I would like to call it a white glove-type service and their additional pillars within the business because we go to real estate. Who acquires the client in real estate? 99.9 infinity of the time, it is the real estate agent, mortgage, title, construction company, or remodeling company. I have a friend in Wyoming that owns her own home warranty company. She does great at that as well. Are there any suggestions that you have as far as multiple revenue pillars?

We do all those things. I have a property management company. I have a partner in that, and he has been a licensed broker for many years like myself. We have worked and owned a different company. We teamed up and managed 425 properties. We have an insurance company and a title company. We tried and did a little bit of everything and then started a storage unit facility. We built 208 units.

I have seen that and I love that about you. You are a flat-out entrepreneur. Where did you get a love for that at? Where in life did you acquire that?

I have always had a passion while building things, businesses, and also diversification. I was here in 2008 when everything crashed. It was pretty bleak and ugly to be an agent at that time. I thought, “I can’t put all my eggs in just the hustle of selling houses. I need to diversify and do some other things.”

We want to bring more agents but it's not about quantity. It's about quality. Click To Tweet

I wanted to hop into Chapter 9 of The Ultimate Real Estate Machine, The Huge Mistakes That Cost Huge Profits. Within that chapter, there are 29 marketing mistakes that real estate agents and team leaders can’t afford to make. I wanted to dive into 2 or 3 of them. One that I have is marketing mistake number four, not articulating and differentiating your preeminence preemptively.

Being that, I could tell by even looking at your website that Chad bleeds preeminence in the marketplace, being that he is the number one, most trusted go-to agent in the market in Central Minnesota. Also, you preemptively market that you are that. What are your thoughts on that and how is that a mistake if you are not doing that?

It is funny how the business has changed for many years. For us, it is establishing that relationship with the client but also understanding the importance of a good reputation and strong reviews. We talked a lot about reviews. What is funny is you can go to Amazon, and your mom can refer to this vacuum. She will say, “Jason, this is the best vacuum in the world. This thing is mind-blowing.” You got to get one. You go to Amazon and see it got a one-star review.

Are you going to buy that vacuum? Not. Your mom referred to it. She believes in it so much, but it is a one-star review. You are going to call mom back. For us, it is understanding that the consumers are more sophisticated than they were several years ago. Now they are doing their homework on you before they even reach out to you. It is having a strong presence on Zillow and Google and understanding the power of those reviews, having stories, and those referrals.

That is one of the things that I have the Agents On Fire contestants working on their reviews, not just quality but the quantity of reviews. If Chad Schwendeman has 500,000 to 800,000 reviews and I have 300,000, who will someone go with? It is also the reviews and video testimonials because I have always believed in the power of social proof.

One of my favorite marketing books on human psychology is called Influence by Robert Cialdini. It talks about the six principles of influence. In his next book, Pre-Suasion, he adds another principle which is called Unity. 1 of the 7 principles is Social Proof. The testimonial videos are powerful because they are the king of content.

Once you get the video content, you can repurpose it back into many different mediums, like written and audio, because you captured and got the video. It is also by building that library because once you have that live library, it can last for a long time because, quite honestly, the consumer forgets that they heard that one testimonial on the radio or seen it on your social media. You can plug that back in 6 or 12 months later.

I know we had one testimonial where we sold an expired home that had been listed 3 or 4 separate times. It was on the market for over 1,000 or 1,200 days and captured that testimonial where we sold the home in 70 days. It was a different property. We had to be true marketers, not expect the MLS to sell the home. I love testimonials.

We do a lot of testimonials with our radio ads and third-party endorsements. We team up with Barbara Corcoran from Shark Tank, Sean Hannity, and Glenn Beck. Having those third-party endorsements have been strong for us.

You must have been reading my mind because marketing mistake number ten is not leveraging the power of celebrity endorsements. You mentioned Barbara Corcoran, Sean Hannity, a couple of others, big national celebrity endorsements. I’m sure you have a lot of local personalities that recommend you too. That is great.

You are missing out if you are not leveraging endorsements, but it doesn’t have to be the super-duper expensive endorsements, either. One of our greatest endorsements was the local high school principal, where there were 4,200 students there that threw about a three-year time period. She sent us about a little over $4 million worth of business and sent an agent to our team that closed over $13 million worth of business.

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Marketing Secrets: It’s really establishing the relationship with the client, but also understanding the importance of good reputation and strong reviews.

 

I would call that a great endorsement, too, if I got $17 million worth of business from an influencer. Even if you can’t do high-level celebrity endorsements, what are your thoughts on making that mistake of not utilizing any endorsements, even if it is the principal of a high school or the mayor of a small city?

Doctors, attorneys, principals, and teachers were in the same scenario. A lot of those people are influencers at a local level. Having them as raving fans will only take your business to the next level, for sure.

They have trust in the audience that they have possibly spent millions and their whole working lifetime to build.

If we can ride on those coattails, that is a great caveat.

The next is marketing mistake number 23. I’m sure you and I have made this mistake, and it is stuck doing what works. It is working good and I’m getting a return on investment. The ROI on this particular lead source is times three, yet you are stuck with doing what works and not optimizing. Can you go back to a time in your career when you have been stuck doing what works in marketing?

It is like, “You have always done it. Why change?” For us, it is getting detailed on where that sale came from. Sometimes it is hard to do a billboard. How do you gauge if a billboard is effective or not? It is not like it is coming in from Zillow or Realtor.com. You can see it. It is all about those touches. For us, it is continuing to evolve and grow. We have always done the newspaper, and now we have pulled back because that medium is starting to die a little bit. It is doing more online and trying to track it.

It is giving it the time to see if it works. A lot of times, years passed, I was quick to stop. I give it 90 days, and now I have learned I got to give it twelve months to see if it gains traction. That comes with the school of hard knocks. You make some bad decisions and stop something too quickly, or it is working, so we are not going to fine-tune it at all, and we are going to leave it, “Hands-off, this has worked.”

I know you have wasted, as I have wasted, not intentionally but unintentionally, tons of marketing dollars on ad campaigns or marketing that you thought was going to work and did not work. Even the best marketers in the world failover 50% of the time, when you hit that one campaign that works, it is beautiful.

It is like being on a listing appointment, them telling you initially, “I’m not doing business now. There is no way in the world that I’m signing up with you, Chad. I’m interviewing 50 other agents.” You walk out there with a listing agreement. When it is over, it is better when you get that winning campaign. Can you tell me a story of one of the worst campaigns you tried over the years?

We have done a lot of different things. We did a pretty expensive mailing piece that was a big newsletter. We gave that fourteen months, and I got one call off of it. It was thousands of dollars a month, and it kept right. It has got to pay for it. For other people and markets, it certainly could be a home run, but for us, it did not work.

Having doctors, attorneys, principals of a school, teachers, who are influencers at a local level as raving fans is only going to take your business to the next level. Click To Tweet

When you love marketing, you can be a degenerate gambler sometimes, where you are like, “It can work,” and you start chasing the money. I have run down that path one time. It costs us about $120,000 in 4 months. It could have if I had have made another mistake. Luckily, I was smart enough to negotiate these contracts with the advertising or medium source. There was an out within 30 days because they tried to have me in for a year. If that had had me for a year, it would have been about $350,000 lost.

A lot of us spent a lot of money on marketing. The first people they call are realtors or team leaders because they know entrepreneurs are pretty decisive in decision-making. We are not going to, “Let’s give it a shot.” I have had that happen too, where they will bring me the new shiny object. I’m like, “Let’s try it,” and I ended up spending $100,000.

Unfortunately, I called them. They did not call me these days. I love marketing. It is fun to me. I have this quick question. Do you feel that lead generation or conversion is a bigger problem for real estate agents nowadays? Which one do you think is the harder code to crack?

I do not need another twenty leads. It is about the conversion, and that continues to be a challenge. We have all seen the stats of the contact. The 7 to 12 contact is when you make the sale, and that is where the ISAs come in, nurturing those leads. Nothing is more disappointing than having a lead you nurtured for sixteen months, and they list with somebody else or buy a house to another agency. That makes my heart hurt.

Is it one of the things that your ISA does, too? Is it going back to your database and putting that client experience hat on?

With COVID-19, we did stop things, but now we are trying to do a quarterly event. This past October 2021, we did Octoberfest, free beer, had a band, and had all of our clients. We have got something coming at the end of February 2022. We are doing a mentalist and magician. We are inviting all of our clients to be at the middle school auditorium. Hopefully, we will have 600 to 700 people there and a free night to enjoy, laugh, see some magic and do things like that.

That is simply giving back to the community. What would you recommend to others that may be now where you used to be when you first started your real estate team? What is a bit of advice you would give them?

An agent told me several years ago, and he said, “If you do not have an assistant, you are the assistant.” You can hire somebody for $15 to $20 an hour to help you in your business. Your time is worth more than that. The other thing that tends to happen is once you make that commitment and you have got another family dependent on you, your commitment and work ethic go up because I got to make sure I’m paying the bills for the assistant, so I need to perform. That is number one. You start to grow your team and the next would be a buyer’s agent. A lot of times, when we are building our team, it is a group of five. It is 1 ISA, 1 listing partner, and 3 buyer’s agents. That is how we try and grow the team organically.

I imagine now that you are not working in your business and not owning your business where the amount of hours that you worked when you sold 200 homes per year as an independent agent.

Now it is more masterminding, working with my office manager, going to different events and conferences, trying to grow that way, and building and giving back to the agents to make sure they are hitting their dreams and goals.

I have been to Tony Robbins Business Mastery, and it says in the book that we are the top three highest dollar producing activities that a real estate agent can be doing. This came from Darren Hardy when he was young and sold real estate. He said that listing appointments are number 1, negotiating contracts is number 2, and prospecting is number 3.

That is working in the business of real estate and then going to working on the business in real estate. Number 1, strategy. Number 2, marketing. Number 3, innovating the top three highest dollar producing activities that you can be doing as an entrepreneur, which is what you are as a team leader. It sounds like you are in all those three buckets now.

You are not just working in and on the business. You are also working above the business and it sounds like you have a couple of joint ventures and partnerships. You have different types of companies where the hub is still the real estate company. That is working above the business and that is a freaking brilliant, wonderful job. What does the future look like for the Chad Schwendeman Real Estate Group?

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Marketing Secrets: The consumer is so much more sophisticated than they were two decades ago. Now they’re doing their homework on you before they even reach out to you.

 

We are going to continue to grow, expand and bring on more agents. Our agents average over 50 deals a year. We want to bring on more agents. It is a lot about the DISC in hiring the right people. It is not about quantity. It is about quality. I’m very selective on who you bring on. We want to make sure that they fit the culture and, more importantly, that they are going to be successful. We do a lot of DISC and interviewing. We are trying to build and grow the team and continue to increase our market share.

What is the perfect DISC look like to you?

It is funny because I have some good agents that sell over 100 deals a year, and they all have different DISC. One could be a high C and D. The other one is a higher S. For us, the economic drive is first and foremost. Their D has to be at least above 30, even higher than that. That is a bare minimum for us. On the listing side, their D has to be 90-plus. On the buy-side, it had to be under higher than 30. Economic drive above 70 for us is important. How do they interact during the interview process? How are they going to fit on the team? We all know one bad apple can spoil a whole batch.

For agents reading that may have referrals or folks looking to move to your area in Central Minnesota, how can they get in touch with you?

Visit my website at ChadSchwendeman.com or call me at (218) 831-4663. You can check out our different programs on that site as well. You can see what we are offering. It is R&D. It is not Research and Development but Rip-off and Duplicate.

I appreciate you. I know you will have a wonderful 2022.

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About Chad Schwendeman

Chad SchwendemanOwner and Team Leader of The Chad Schwendeman Real Estate Group with Exit Realty. Chad has won Exit Realty International’s Group Top Agent Award, he received the Tri-Real-A-Thon Award 4 Years in a Row!

His tagline is indeed correct,”No one Sells more homes in Central Minnesota than Chad Schwendeman”. Chad is known as one of North America’s top agents, he’s highly respected within the highest level of producers in the world.

 

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