29 Mar How Social Media Can Affect Your Net Worth
Our lives are so intertwined with social media it’s hard to imagine a world without it. Nearly 80% of Australians use social media every day, with 31% of us checking our accounts over 10 times a day. It’s become more than just a means of keeping in touch with friends and family though. Social media is now massively important to businesses and brands as a means of promoting awareness and engaging with customers.
Using social media wisely can have a direct positive effect on your net worth. In real estate terms, how we sell properties has been hugely influenced by social media in recent years, and the same has applied to many other businesses. Today we’re going to look at this phenomenon and why social media should be used by all businesses, not just real estate.
The Evolution of Social Media
The modern version of social media began in 1997 with a small site called Six Degrees, where you could set up profiles and share photos with friends. Although it folded just after the turn of the century, it had laid an important platform out of which the next generation of social networking would arise.
A site called ‘Friendster’ opened in 2002, and although it experienced early success it never really took off, mostly due to technical difficulties. Social media really hit its straps in 2003, when LinkedIn and MySpace both came into being. LinkedIn took the approach of being a virtual resume where you could connect with businesses and other professionals.
MySpace was the first incarnation of social media that really resonated with the youth, who were able to share images, photos, music and messages with each other. It sat on the throne for a number of years, but its popularity waned as Facebook, which launched in 2004 as a university-only application, opened to the general public.
Today Facebook is the undisputed global king of social media, supported by acts like Instagram, LinkedIn and Twitter. It benefited from huge investments from various tech moguls who saw the potential of the platform, and thanks to smart advancements, handy features and a willingness to update and adapt, Facebook has maintained its position as leader of the pack.
How Purchasing Online has Evolved
Online shopping is a juggernaut that isn’t going away. The convenience of being able to browse and make purchases from your own home, with same day delivery being available in some urban centres, is just too appealing. We buy our groceries online, as well as cars, clothes, technology and even real estate.
As online shopping has grown, so too people have been spending more and more time on social media. The two are now almost inseparable from each other, with social media heavily influencing buyers choices. According to a Sprout Social report, 89% of consumers will purchase from a brand they follow online.
84% of Facebook users follow brands and businesses. 51% of these are more likely to trust brands that positively engage with their followers, while 54% trust them if they produce regular, relevant and engaging content. It’s clear that social media, and Facebook in particular, can have a direct bearing on your business, your sales and your net worth. Use it correctly and you’ll see positive effects on all of those.
When using social media to your best advantage, it’s wise to focus on the ‘social’ aspect of it. This means giving your brand a personality, a face even. Many of the biggest brands are known for the person who put them on the map, and when people buy from the brand they feel they’re buying from that person. Think Elon Musk at Tesla, Bill Gates at Microsoft, Steve Jobs at Apple. All names so closely linked with their organisation that is hard to tell them apart (even if they no longer work together).
The point is, people would rather feel like they’re buying from a person than from a faceless organisation. Real people are the key to authentic relationships, which leads to trust and more sales. 70% of consumers say they feel more connected when a brand’s CEO is active on social.
To capitalise on social media’s positive effect on net worth, its therefore important to bring a human element to your content marketing on Facebook and other platforms.
The Evolution of Real Estate Selling
As social media and the internet have evolved, so the way in which we sell real estate in Australia has changed. In the 80’s and 90’s before online portals such as realestate.com.au and domain.com.au it was a case of walking to the real estate agency, looking at what was for sale in the window and having a chat with the agent there. It was very much focused on the human interaction leading to the sale.
In the late 90’s and 2000’s the internet portals started to gain traction, as our connections got faster and we started doing more things online. People were turning to the online world to find their next home or investment property.
These days, the main real estate portals are still very relevant, but the exponential growth of social media now has a heavy influence on buyers decisions. Consumers turn to Facebook and LinkedIn to find homes and also to find agents that they trust.
As it stands, if you don’t use social media to attract buyers when you’re selling a property, you’re missing out on a lot of exposure. When the number of people who are exposed to a property is limited, then less competition is created. If there’s less competition, the price of the home won’t be driven upwards. So if you’re selling a home and you don’t use social media, it can directly affect your net worth, because suddenly your property isn’t worth as much.
This is important to Australians in a real estate context because we have so much of our net worth sitting in our homes. This set of stats released by the Australian Bureau of Statistics. reveal that in 2018 property owning households at retirement age (at least one occupant over 65 years old) have a median net worth of $960,000. If there was still a mortgage on the home the median net worth is a bit lower at $934,900. In contrast, the net worth of non-property owning households was just $40,800. This shows a lot of our value is stored in property, so it’s in our best interest to increase that value and hence our net worth as much as we can.
How Innovative Real Estate Agents Sell on Social Media
Statistically, in Australia your home is the biggest investment of your life. We’ve seen how much of our net worth sits in our homes, but what is it that determines the value of your home? Well, it’s this formula:
Past sales + recent sales (what’s on the market) + competition = value of your home.
The massive variable here is competition, and that can’t be really factored in until you go to market. When this happens, your home is put up on the main real estate portals, which generates a standard amount of competition. It can also be shared on social media, which creates awareness of your property, attracts more buyers than the standard real estate portals do, and increases the competition. More competition generally means a higher price achieved. Which means the net worth of your home is increased, and hence your net worth is too.
What does this indicate? Social media has a direct effect on the net worth of your home. So when you hire an agent to help you sell your property, you want to be sure you find the one who gets you the best return on your investment.
Let’s take a look at how your traditional real estate agent would sell a home. They do the minimum amount of work possible and hope for a result. And in times when the market is running hot, they can get away with it. They just list the property on realestate.com.au and domain.com.au, send a few emails and hope for the best. But would this work when the market is ticking over a bit slower, or when the property in question is more unique and appeals to a narrower niche of buyer? No, it wouldn’t. That property listing would simply stagnate on the main real estate portals over time.
An innovative agent has already thought outside the box when it comes to leveraging social media to boost their sales. They’ve built up a following for their brand and their business, regularly putting out relevant content and engaging with their followers on a daily basis. They’ve got positive online review across multiple platforms, and have built a reputation as a responsive and caring member of their online community. This following and reputation is crucial to using social media to boost your net worth. Here’s how it works.
Social media shows you ads that are relevant to you. It decides what is relevant to you by using complex algorithms to analyse your interactions on their platform and figure out what interests you. This is important to the longevity of the platform itself, because if it showed you things that weren’t relevant at all you’d soon lose interest and stop using the platform.
When a business advertises on Facebook or similar social media platforms, the algorithm first looks at the number of followers the business has, plus how highly engaged they are. Consumers would rather connect with a person than a faceless brand, which is why the engagement factor is so important. A personal brand with a lot of engaged followers is going to do very well out of both advertising and creating organic reach on the platform, because their post is going to be spread to all those people they’ve engaged with. These are targeted consumers with an interest in the real estate listing or whatever product it is, so chances are they’ll share the post on too. This can lead to an organic spread of the post, increasing exposure of a property listing exponentially.
Let’s look at it in terms of figures. A traditional agent would pay $1500 for a listing on realestate.com.au. It doesn’t matter if you use an agent or put it on the portal yourself, you’ll still be exposed to the same amount of buyers as any other property in your area that’s for sale on that portal. To reach more buyers you need to harness the power of social media.
A progressive agent might have over 10,000 followers on their highly-engaged Facebook account. If they put an ad on Facebook with a $500 spend, they might get 60 buyer enquiries through Facebook. That’s 60 buyer enquiries more than the traditional agent who only focuses on the main real estate portals. It’s also more than the agent who only has 1000 followers on their Facebook page. They can spend $500 on advertising and only get maybe 10 buyer enquiries, because their ad has reached less people.
The key is to be active, engaged and relevant on social media. This will boost exposure, increase competition and hence improve your net worth.
How to Tell if a Real Estate Agent Correctly Uses Facebook for Marketing
Looking for one who leverages social media correctly is a great place to start. Here’s how to tell if a real estate agent is using Facebook to their best advantage.
How many followers do they have?
If they’ve only got a few hundred followers it shows they haven’t been putting much effort into their content production. Effective and relevant content attracts followers, it’s as simple as that. More followers also means your listing will be put in front of many more people.
How engaged are the followers?
It’s one thing having a lot of followers, but if the followers aren’t interested in the content being put out there, it’s going to show. Go over the last 20 posts the real estate agent has put out there. IF they’ve got a big following but very few likes and engagements, something isn’t quite right and your listing probably won’t enjoy the exposure you’d expect.
Is their content relevant?
Content should be educational and informative as well as engaging. If its just a ot of spam about themselves, their own testimonials and their own listings, they haven’t put much thought into their content and their posts won’t get as much reach.
Is their content original?
It’s easy to reshare other people’s content, but its original, creative content that will get the most traction on social media.
Ask for proof.
If you’ve got an agent in mind, ask them for proof of how many buyers enquire per listing, and how many of these enquiries are through social media. If they’re using social media to its fullest potential, they should be proud to show you this information. If they’re not, chances are they’ll try keep it hidden from you.
Social media and all online sales are very closely connected these days, but it’s when you use social media to sell real estate that the biggest effect on your net worth happens. If you have any questions about how Facebook can be leverage to create exposure and competition for your home and thus drive up your net worth, please get in touch with The Henry Wong Team®.