The National Association of Realtors is growing fast: its membership has now swelled to over one million agents, from a low of 740,000 just a few years ago. Real estate’s incredible run over the last five years is attracting hundreds of thousands of new agents. Most states are being overrun with people taking the real estate test. At the same time the “churn” in real estate, which is the number of agents failing and leaving the business, has to be rising as well. It is becoming harder and harder to make a living in real estate.

On the other side, the people at the top of real estate are cashing in on a seemingly endless smorgasbord of opportunity. According to Realtor Magazine’s last list of the “Top 100” agents, the top agents on average are selling $82 million per year in sales, closing 227 transactions each. They are earning, on average, $2.4 million in gross commissions a year.

On one side, the huge influx of new agents into real estate is making it harder to make a living, and on the other side, the agents are setting sales records that a few years ago seemed unimaginable. How is this happening?

Right now I believe that real estate is undergoing a structural shift that is producing profound changes at every level of the industry. Real estate is changing from a sales-driven industry to a marketing-driven industry.

Today’s top agents understand this and have become totally focused on marketing. The problem is that real estate has been a sales industry for so long, it is hard for the industry to change. What makes things worse is that most brokers and agents lump sales and marketing together. But it is critical to understand the difference between the two.

Sales skills are the skills you need to convince somebody to buy. Sales skills are the scripts you say, the closing techniques you use when you are face to face with a prospect. But the key difference between sales-driven agents and marketing-driven agents is the way they think.

A salesperson wakes up each day and says “I need to find a prospect today so I can sell them.” They are always looking for the next person to work with, and this determines their actions. They cold call, sit open houses, take floor time, and even door-knock to find someone to close. Now don’t get me wrong -- this stuff can work. If you are disciplined to do these things every day you will make money, no doubt about it. I am sure that many agents have built businesses by doing these activities. But as the number of agents who are still being taught to approach real estate from a sales perspective increases, it is becoming less and less effective.

Marketing is the art of attracting people who are interested in doing business with you as an agent. A marketing-driven agent wakes up each day and asks, “What marketing activities do I need to put in place that will interest people in calling me as an agent?” The agents who have embraced a marketing approach to real estate are rewriting the rulebook about what is possible in real estate and how the real estate business of the future will operate. These marketing-oriented agents are doing an ever-increasing volume of business that is making it harder for sales-oriented agents to survive

One client of Hobbs/Herder, Phil Herman in Dayton Ohio, sold around 400 transactions last year. Think about what Phil Herman did to generate those 400 transactions. Just out of curiosity, how many doors did he knock on and how many cold calls do you think Phil made? How many open houses did Phil Herman hold, or how much floor time did he take?

That’s right -- Phil did not do anything that the average Realtor does -- on purpose. In fact, if Phil did any of those things, I know his business would actually go down. It would be impossible for Phil to do 400 transactions per year doing business using the traditional model of real estate sales.

Phil is leading the way into the future because he understands that his marketing is the secret to generating a steady flow of clients who want to do business with him.

I believe that your future in real estate will be in direct proportion to the effectiveness of your marketing materials. Most agents know enough about real estate to succeed, provide great service the clients they have, and are willing to work hard, but you have to remember: no matter how good you are at closing, if you don’t have a client to close, you will still fail in real estate.

So what are you going to have to do to compete effectively in the future? First and foremost, you are going to have to become a marketing-oriented agent. The first key to creating effective marketing is making sure that each and every piece of your marketing materials has a strong emotional appeal. Great marketing is emotional, not logical. Most Realtors have been brainwashed into thinking that if they put a sales presentation on paper it automatically becomes marketing. In reality, nothing could be further from the truth.

Think about Nike’s great marketing. How many Nike ads have you seen where Tiger Woods picks up a pair of shoes and says, “Let me tell you about the benefits of these shoes. The leather is first class and the stitching they use is the very best.” We know this would not sell. We see Tiger Woods having fun bouncing golf balls on his nine-iron and we want to be like him -- so we buy the shoes and the shirt and we still know it will not make us hit the golf ball any better. Nike understands great marketing is built on an emotional appeal! If you make a commitment right now to work on putting more emotional punch into your marketing, I know it will pay huge dividends for you.

Next, look at your marketing materials. Are they professional quality? Let’s say I consistently receive “Just/Listed” and “Just/Solds” in my mailbox from two different agents: one is average quality; the other is very high quality with a great design and full color. Which agent would I, as a consumer, think is a more successful agent? Which agent do I think is going to provide a higher level of service? Which agent do you think is the first agent I would call? You cannot create a full service image on discount quality marketing materials.

The bottom line is that unless you become a marketing-oriented agent, you are going to find it harder and harder to compete. Cold calling, door knocking and floor time is going to become less and less productive. Or you can embrace the future and become a marketing-oriented agent that thrives.