Strategy for overtaking entrenched competitors

When a competitor is entrenched in a given market what strategy(s) would you recommend for taking market share? -AZBroker

What entrenches them? Where are they weak? Where are you strong? What is the current attitude of the "given market"? What beliefs do you share with the "given market"? Who is going to take the leadership role in "taking" market share?

Combined with adaptability, your strategy exists in answer to those questions. -Gary Boye

We resale residential real estate so I'll use that as an example.

There are some neighborhoods within the community where a given real estate agent has dominant market share. The market is currently hot so listings are selling very well and sellers are happy campers and spreading the word. This word of mouth advertising combined with an aggressive marketing campaign has proven difficult for many agents to overcome when trying to crack the market.

Any ideas? -AZBroker

None.

I see how they are entrenched, and you've revealed the happy camper attitude of the market. Their strengths appear to be a compounding budget for advertising and a word-of mouth residual benefit from an increasing client base.

Where is their weakness? What beliefs do you share with that market? And who will lead a campaign to grab some of their market share? Will it be you?

If you are really intent on formulating a plan to go after them, I think it would be impossible to be successful without assessing all of the areas I mentioned. Right now, that strong competitor seems to have a lot of momentum. I promise you that they can only lose that momentum as a result of their own vulnerability--not because of something you do.

I don't know the real estate business, but I will guess that the weakness of the competitor will be found somewhere in the experience they create for their customers. It is very rare to find it any place else. -Gary Boye

I don't currently perceive a weakness. Of course, they do not offer discounted fees. That could be perceived as a weakness I guess.

As for shared beliefs, what beliefs are you referring to?

Individual agents are responsible for their own production. Each agent would have to head his/her own campaign for building market share. -AZBroker

How many individual agents are you responsible for--or have a vested interest in?

What shared beliefs? Start any place you want--as long as they are not trivial. I'm serious. But--back to my question--how many agents? The answer has to be either just you--or--more. I don't care about the number--it's not my business. -Gary Boye

Because I work for the brokerage I have a vested interested in all of the employees.

I'm not sure I understand. I'm sure that the the market and the agents share the belief that the real estate industry is still booming. Is that the kind of belief you're referring to? -AZBroker

[quote=AZBroker]Because I work for the brokerage I have a vested interested in all of the employees.
QUOTE]

Then either you will lead or someone above you will lead--not the agents. Who do you prefer to lead--you or someone above? The answer will be one more of the five factors that will determine your success. Either is acceptable--but you need to think about it and choose who is best.

We'll address the shared beliefs later--so hold that thought. I've got two appointments. Believe it or not--I sell too. -Gary Boye

Gary, the real estate agents at our brokerage are independent businessmen and businesswomen. They call their own shots. -AZBroker

Then you are in no position to formulate a strategy for them. They can do that by themselves, but inasmuch as they will all probably use different strategies as independents, making significant advances in market share against such a strong competitor would be almost impossible unless that competitor makes some horrendous mistakes. An exception would be if one of these independent agents creates a strong infrastructure for his/herself and is able to take a strong leadership role in pursuit of market share. But, we're talking about an unknown, possibly nonexistent, entity when we assume such a person exists.

I'll bow out of this one. I don't see any components here for overtaking anybody. -Gary Boye

In practice the majority of agents that I've known who faced this situation ended up finding greener pastures.

It would great to be able to provide the agents with a plan of action (strategy) when facing this scenario. My quest continues. :) -AZBroker

I suppose if an agent is willing to put in the time, effort and expense most neighborhoods could be penetrated.

If it was me I would make the campaign very personal. Go and see the people... be Visible. Set up camp in the neighborhood... go door knocking nightly and really get to know the homeowners, attend HOA meetings, hold dazzling open houses with invitations and refreshments, automobile advertising, weekly mail pieces, door hangers... the works! Every time they turn around they bump into your smiling face. :) -SalesGuy

I just had to jump in here :) .

What if, instead of concentrating on beating the competitor at their own game, you redefined the game?

Your definition of the market, as described in the posts in this thread, is based on geography. What if you based your market on something else--here are some examples:

• seniors looking to downsize -- you could focus your marketing efforts at places seniors in your area hang out, such as a senior center, volunteer groups, etc.
  
• couples going through divorce. This would take some special skills in negotiation -- and I'd bet you could get other real estate agents who don't want to deal with the hassle, to give you referrals! You could perhaps reach folks like this through divorce attorneys...

I don't pretend to understand real estate, so these ideas may be far-fetched...but perhaps you can come up with a different target market segment that would work? -Terri Zwierzynski

Thank you for your input Terri. You've described what I believe Tom Hopkins calls "people farming." :) -AZBroker

I'm not familiar with that term! Probably because I'm not usually in the "sales training" universe. I found his site but nothing about people farming. -Terri Zwierzynski

I just looked and I was mistaken. It was Danielle Kennedy in her book, "How to List and Sell Real Estate in the 90's" who mentions "People Farms".

The pages [59-60] are missing from my copy so I can't provide a quote but as I remember it the concept was agents could target individuals (people farms) or communities (house farms). -AZBroker

Me neither. Being in the marketing universe, I call it demographic targeting. ;)

I like terriz's idea. Also, if you spend a little time looking at the demographics of the families living in (moving to) the houses the competitor handles and the demographics of those living in (moving to) the houses others besides the entrenched competitor have managed to list, maybe you can find some patterns - both where they've been most successful and where they've been least successful. If so, then you can start building recognition with the demographic group(s) the competition seems to be weaker in listing.

You could also take the opposite approach (not sure if the following actually makes sense in practice...I am not in real estate either)...if you represent the buyer, you don't need to even worry about listing the house. Figure out what that competitor is really good at selling and let them do half the work....

They can go ahead and get the sellers' listings. YOU figure out which other neighborhoods people are likely to move from when they move into your competitor's neighborhood. Focus on finding buyers that are likely to want to buy the houses your competitor lists. When your buyers buy, you get a commission just the same as if you'd listed the house (right?). Plus, over time more and more homeowners will be "yours" in that neighborhood - in the sense that you were their agent when they bought the house. So, if they move again - or if neighbors ask them for advice - your name is more likely to come up. -Bobette Kyle

That sounds a little more politically correct. :)

There have been some great ideas posted on this subject. Thank you everyone for the input.

I am surprised that there are no known strategies for uprooting an entrenched competitor in general. I'm sure many, if not most, industries face this type of challenge in one form or another. -AZBroker

When all else fails... PUNT! :D -WobblyBox