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You Must Be Selective At Choosing Your Clients To Be Successful

September 18th, 2011

Italian economist Vilfredo Pareto observed in 1906 that 80% of the land in Italy was owned by 20% of the people. It turns out that what is now known as the Pareto principle or law of the vital few, shows up in economics, in business, and in almost every aspect of human endeavor. Yup, you guessed it, it shows up in real estate and real estate photography too.

Stated for real estate agents it says: “20 percent of the agents close 80% of the transactions“. There was a NAR study back in 2004 (no longer available) that essentially confirmed this was the case. It also stated that the median income for agents who had been in the field for 2 years or less was $13,000. In 2004 the real estate market was roaring!

Anyone close to the real estate industry these days will agree that Pareto was an optimist! I’m inclined to say that 5% of the agents do 95% of the transactions. The exact percentages for my point aren’t all that important. My main point I want to make is that to be successful as a real estate photographer it’s important to understand that you really don’t want to do business with all agents. As anyone in this business will soon discover, 90+% of agents think that shooting photos with their cell phone or their point and shoot is good enough.

Here are two facts that it’s essential to understand if you want to be successful in real estate photography:

  1. When you are building your business focus on pursuing business relationships with the top 10% of listing agents. The fact these agents are successful demonstrates they have the business figured out and they are willing to do what it takes to be successful. You’ll find that most of the top 10% of agents appreciate and can afford professional photography. The bottom 90% may understand the benefits of professional photography but are not closing enough transactions to be able to afford professional photography for their listings.
  2. The bottom 90% of the real estate agents don’t have the money to pay you the per shoot price you need to charge to run a sustainable business. This encourages beginning real estate photographers to reduce their prices to $50, $60, $75 or $99 and neglect the fact that it’s not possible to run a sustainable real estate photography business buy charging these low prices. Yea sure, you can snag some extra cash for a while, but you are not recovering your fixed costs of being in business at these prices.

I go into this subject in more detail in this post and my Business of Real Estate Photography eBook includes a Cost-Of-Showing-Up spreadsheet and walks you through the process of figuring out what it costs you to show up at a shoot and how to figure out how much to charge to operate a sustainable business.

Bottom Line: To operate a successful, sustainable business you must do business with clients that are operating successful, sustainable businesses.

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7 Responses to “You Must Be Selective At Choosing Your Clients To Be Successful”

  • That is very true. Being a realtor I can say that 20% of my clients give me 80% of what I earn. The lesson here is not to stop paying attention to the 80% that only gives you 20%. The lesson is to give much more attention to the 20% that gives you the 80% without forgetting to keep in touch with the other 80%.

    Also you have to be careful, it’s not so linear. A top agent that makes thousands won’t likely hire you to shoot a lousy $50k house… it doesn’t compensate. But for example a bottom agent is willing to hire you to promote a $1million house despite the fact it won’t give you much more work in the future.
    More commission, more money, more investment.
    Of course a top agent is willing to hire you for all the houses that he promotes because that will make him more known etc even if he knowns that he won’t earn a penny from some houses that he wont sell.

    High-end houses are just a very small niche, it doesn’t appear everyday in the market. You can’t make a living out of it, unless you are very well known and your reputation is really high but that’s not the majority of the cases.
    Like the bottom line said, successful, sustainable is the key and to achieve that you have to work with agents that are willing to pay you to shoot every house they promote. Even if sometimes they just want a few cheap not so high-end non-hdr non superb photos of a very small and cheap apartment just to impress the client by bringing a photographer. That will give you that sustainability in the business.

    A thing that works great is making a contract by which you shoot X houses per month for X dollars and you get paid every month. You can make a discount! Let’s say an agent lists about 5 houses a month and pays you to shoot 5 houses per month. You can even save loads of time by shooting all the 5 houses in the same day, the agent will appreciate that too. Time is money. Just an example.
    This system works very well for me.

  • You know my view on real estate agents who take their own photographs Laz.

    They’re bad photographers who can’t make up their mind.

    That will probably bring the house down on me once again but hey, I can’t walk into churches these days because the roof cracks.

    Have a good one; Red Epic and 4K on the way.

  • Finding the top 10% of agents as your prospect client in photography can be quite challenging. However, closing a deal from this people can help to build your credibility as real estate photography.

  • Totally agree. I think it’s about 5% in this current market, which is why I don’t market specifically to Realtors. Why market to 5% of a particular demographic? And how would you ever successfully do that? And don’t forget, it’s not just a percentage of the successful agents, you need to find those agents that are primarily LISTING agents (many are very successful, but mostly work with buyers – not our customer either!)

    My philosophy is do good work, turn it around on time, show up when they want you to be there, price it fairly and use social media to get your WORK out there…. The business comes from referrals and from that 5% who SEE your work and who instantly know they need to hire you….! And the biggie? Make sure you make it VERY easy for someone to reach you when they decide they want to hire you!

  • @Bert- I can sit right here at my computer in La-La an find the top 10% listing agents in any city in the world. Agents work for brokers that have websites that list all the agents that work in their office and how many listings they have. The top agent in any office is the one that has the most listings. The ones that don’t have any listings are agents that work with buyers… ignore all those. Make a ranked list of the agents in an office ranked by how many listings they have and what the highest listing price is. Do this for all the major offices in your area. Sort all the offices together and take the top 10 percent. You’re done. Yea, it takes more than 25 minutes and I am continually amazed by the number of people that will not put in the relatively small effort it takes to do this exercise. The people that find this too hard are the ones that lower their price to get business.

  • Also don’t forget that some top agents don’t hire any photographers because they think it’s a waste of time and money. Being a “top agent” doesn’t necessarily mean they while hire more. They are not all the 20% that the article talks about. Sure they can pay and many will but just don’t forget the ones who actually hire on a systematic base being top or not.

  • I’d say its about 10% of the realtors in our market. Go after them, but also search for high end listings that have lousy photos. Contact those agents as well.

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