How much should real estate pros be investing in their marketing?
Many real estate investors, agents, and businesses may be limiting their potential, and dampening their conversion rates by failing to invest enough in their marketing. So how much should individual professionals and property companies be spending in this area? How do you pinpoint the right figure? What should it be used for?
Frugality vs. Frivolity in Real Estate Marketing
There are classic examples of both ends of the spectrum out there. Some of the largest online real estate companies blow so much on marketing that they lose tens of millions of dollars a year on it. Then there are those that only want to do free guerilla marketing, and pinch every penny with all their might.
Then there are those that are surprised by real estate marketing costs. What happened to no money down real estate investing? Or I thought a real estate broker was going to hire me and give me a paycheck? These things are both possible. But in the vast majority of cases all independent real estate professionals are going to need to invest actual money in their marketing if they want to grow their incomes. All business owners should have a marketing budget and plan before opening their doors.
You’ll always need new business, to augment business leads, and to maintain a presence for the benefit of existing clients and partners. Don’t waste money lavishly unless there are tangible results and a positive return to be had. Yet, don’t sell yourself short and sabotage your potential by being too cheap either.
Investing, Giving Value, and Maximizing Potential
There are three ways that the most successful real estate pros think differently about this:
- They ‘invest’ in marketing, versus spending
- They know they must invest money in marketing to maximize their potential
- They understand great marketing is a form of giving and serving clients, partners, and shareholders
The biggest winners, are the biggest givers. That includes how much they give in the value of their marketing. That means quality and good content. The more marketing you do, the more returns that can be expected, providing you are putting great marketing in play. That makes marketing an investment, not an expense. There are good and bad investments in real estate, and good and bad investments in marketing. Just as with real estate going to cheap, or overpaying can be a bad thing. So how much should you be investing in real estate marketing?
Deciding on Your Real Estate Marketing Budget
There are three ways to come up with a number for your monthly marketing budget:
- Divide your startup capital by 3, 6, or 12 months
- A fixed percentage of your monthly revenues
- Decide how much you want to earn, and back out the numbers based on costs and conversion rates
5 Areas Where Many Are Not Investing Enough
- Real estate websites
- Real estate blogs
- Direct mail
The most glaring and consistent mistake that many real estate pros and brands make is that they don’t put themselves in their prospects shoes. If you were looking to buy or sell a home, and you came across your website, blog, event, or got one of your mail pieces in your mail box, would you be impressed? Would you be wowed? Would you take action?
So many could do far better if they improved the look of their website a little, put up better blog content, tried to wow a little more at events and open houses, spent a little more on mail that stands out, better wording in their email content, and consistently invested in building a brand, and brand visibility, they could be reaping far larger results.
This doesn’t necessarily mean having to spend many thousands of dollars more every month. Some do spend millions a month on real estate marketing. Yet in many cases just a few hundred extra dollars a month on each of these items could make the difference of a million dollar or more in revenues over the next year.
Look for ways to maximize what already doing with a few tweaks. Look where you can partner or tap free streams and focus your budget on other items.
A great example of this is that National Association of Realtors data shows that most agents spend more on their cars than on their websites and marketing. Perhaps that’s why most just barely make minimum wage. Now what if they invested a little extra in a great car wrap? Data actually show wraps have some of the best returns of all outdoor advertising. What if that wrap was subsidized by a strategic partner like a title company, or mortgage lender?
Are you investing enough in your real estate marketing? Is it time to revisit your marketing budget? Could investing a little more, or finding creative ways to offset marketing costs help jump your results by another seven figures or more over the next 12 months?