In business, when a company performs well, every competitor takes notice. Soon, everyone in the market tries to do what the market leader does, because all of them are after market dominance. And if the method that allowed a company to dominate their market is easy to replicate, the top dog won’t dominate their market for long.
That being said, copying others is not the best way to develop a business plan for your real estate investing business. If that was the best way to dominate a real estate market, then those who are able to throw more money at the problem would remain on top at all times. Thankfully, online marketing changed the industry and it now allows real estate investors to compete with big companies. However, online marketing works for real estate investors only if done right, meaning you’ll need to use a method that’s hard to replicate.
We’ll help you out by sharing the proper way to do SEO for real estate investors, but first, let’s discuss the Red Queen effect to illustrate why it’s important to stay away from shortcuts in online marketing.
The Red Queen is a character in Alice in Wonderland, which is why it might sound familiar, particularly because a model in evolutionary biology was named after her (more on that below). Dan talked about the Red Queen in a podcast episode dedicated to SEO tips, so let’s see what this fascinating idea is all about and why it’s relevant for your online presence.
One of the many weird adventures of Alice is a scene where she runs into the Red Queen. As soon as they meet, the Red Queen takes Alice by the hand and tells her they both need to run. As you might know, the author of the book, Lewis Carroll, is known for integrating deep ideas (and even complex mathematical problems) within the storyline, while still creating a story primarily aimed toward children, so let’s see the significance behind this character.
So, there’s a description of how both Alice and the Red Queen run (they run as fast as they can, they are panting) and when they finally stop, the Queen says:
Here in my kingdom, the world moves so quickly that we need to sprint just to stay in one place.
Obviously, the basic idea is that you need to try and work hard just to keep up with your environment. It’s as if someone showed Carroll how the internet would look like, because real estate investors (or their marketers) today need to put a lot of effort and money to simply stay at their starting position. This is also reflected in the eye watering amounts of traffic, both personal and professional, that is generated on social media, so it’s fairly easy for us to relate to the Red Queen and Alice who run to exhaustion only to remain in the same spot.
Speaking of environments, let’s discuss the Red Queen Effect for a moment. Evolutionary biologists have noted that in the natural environment, predatory species and prey species co-evolve. It will be much clearer if we speak about specific species.
Let’s take foxes and rabbits who cohabit the same forest as an example. Foxes prey on the rabbits in order to survive. If some of the rabbits are able to run faster than the foxes, these rabbits might avoid being captured for a while. But once the stock of slow running rabbits is depleted, the foxes will have to learn how to catch the fast-running rabbits if they want to secure their survival.
Consequently, the rabbits (the prey) develop an evolutionary adaptation that allows them to avoid capture (running faster), while the foxes (the predator) develop a matching evolutionary adaptation (running faster) to continue catching rabbits.
This coevolution pattern for pairs of predators and their prey was called the Red Queen Effect because it’s a natural mechanism that restores the balance in the environment. It’s an essential part of having a stable ecosystem. After all, if the prey evolves at a faster rate the predator will soon be extinct (a forest full of fast running rabbits and no foxes), and if the predator evolves at a faster rate the whole food chain will be disrupted, because fast-running foxes will start attacking other animals once the slow running rabbits are extinct.
This type of balance is good for natural environments – it allows for species to continue living in the same space. Like the Red Queen and Alice, the pair of predator and prey change in lockstep, (the pair is in an arms race of sorts) and the result is an environment that stays virtually the same for a long period of time. Running to stay in the same place.
So, how is this related to real estate?
While balance is required in the natural environment, where things need to stay the same (or change over long periods of time), in business it’s completely opposite to that. If your company is not growing, then you might as well close shop.
Take a good look at the position of your real estate investing business in the market. If you are doing your best only to stay in place, you need to change something.
When real estate investors use the same techniques to dominate their market through online marketing, they create Red Queen environments, regardless whether they are aware of it or not. Here’s how Dan puts it:
SEO for real estate investors is a Red Queen environment, meaning that, by default, what investors are doing is running, and competing, and spending, and all they are doing is standing still, because whatever they do that is easy to do, their competitors also do.
We have talked about this in other pieces as well: real estate investors tend to go for ready-made solutions for their website (there are plenty of options out there), but if you approach SEO in the same manner, you are likely to make a mistake.
Everybody wants to rank higher in the SERPs, however, the stakes are very high for real estate investors in particular. Search engine optimization enables your real estate investing website to get free traffic, and since you are dealing with houses, each deal has the potential to bring profit in the tens of thousands of dollars.
This combination – low lead acquisition costs through SEO and the potential for high profits from deals – makes for a very competitive environment since real estate investors are after similar keywords.
The competition for real estate investing keywords, like ‘sell my house cash fast,’ is very high, but what’s also common are the methods used by investors to rank well for these keywords. This is what creates a SEO Red Queen environment where each investor is trying to replicate what the top ranking real estate investing website does.
In this scenario, you don’t want to be the top website (not with those methods), nor do you want to be the business that will replace the competitor at the top. This kind of SEO success is short-lived. Let’s explain.
Remember what we said at the beginning: if your methods are easy to replicate, others will use them against you. Here’s how Dan put it:
If your competitor adds the keyword “sell my house fast” 10 times to his homepage and that makes him number one in your market, what is everyone else going to do? They’re going to put “sell my house fast” on their websites 11 times, right? I mean, look, that person did it 10 times. It got him number one on Google. That’s worth hundreds of thousands of dollars a year in deals for the right keyword in the right market. You think I’m not going to then put it 11 times? Of course, I am.
“Marketers ruin everything” – that’s our in-house mantra for the relationship between black hat SEO techniques and Google. When the people who design the search engine algorithm notice that a marketer is using tricks to reach the top spot, they change the ranking algorithms to allow content with genuine value to rank high.
Hence the effect of SEO trickery is short-lived, even if you nail it, but more important – you can get slapped by Google for using black hat, sometimes even gray hat SEO techniques. Let’s check one specific example.
Link building for real estate investors – backlinks are hard to obtain, yet the search engine values them to determine site authority. This is a serious temptation for investors, because low-cost link building services are easy to find, but the quality of the links is suspicious. It’s a cheap and quick fix for an issue that is way too complex for that kind of a solution. Investors get penalties for bogus backlinks.
Is there a way to avoid running on the hamster wheel for investors? To escape the Red Queen effect in your online marketing? Of course – it’s to step out of the race. As Dan puts it:
It’s about doing the things that your competitors are unwilling or unable to do, and if you can do that consistently in your SEO, you will find it very, very easy to dominate your market.
How does this translate in your day to day SEO tweaks? Well, it’s simple. If other investors buy links from dubious sources, you find backlinks the hard way. If other investors look for a ready made solution for their website and the keyword usage within the content, you create a content of value that engages visitors.
Real estate investing is not a sporting event, and you can’t dominate a market by performing harder, better, and faster. Instead, once you identify a Red Queen environment, start looking for alternative strategies to come on top.
For instance, keyword auctions in pay-per-click ads for real estate investors can also become Red Queen environments. During a bidding war, many real estate businesses place bids for a specific keyword like “how to sell my house fast in X.” If you get drawn into a bidding war without a bidding strategy, you can spend a lot of money so that your ad is shown to search engine users.
But do you like to get those leads at all cost? The higher the lead acquisition costs, the lower the profit. We recommend staying away from bidding wars, because throwing more money to secure a top spot is not sustainable in the long run.
In nature, the Red Queen effect brings balance and creates a stable environment for each species in the food chain. The survival of each of these species depends on maintaining this competitive dynamic: it’s beneficial and none of the species controls the process.
In business, the Red Queen effect can tempt you to try harder and to spend money just to keep your starting position. While in some industries throwing more money at the problem is justified, in real estate investing, where the rules of search engine results allow you to compete with bigger businesses than yours, it’s best to use methods that others aren’t willing to use, like working hard on link building and providing high-quality content. Simply focus on the long term benefits from doing what 90% of your competition isn’t willing or able to do.
Do this as soon as you identify a Red Queen environment, be it for your real estate investing SEO, for keyword auctions, or any other aspect of your business.
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