Is there a general amount that should be spent on advertising each listing?
Does it depend on the quality of listing or the price of the listing?
Some people have said that you should average 1% of the commission per listing.
Also, is there a rule of thumb in terms of how many listings you should have at any given time or does it matter?
Any thoughts or ideas would be greatly appreciated
What you spend advertising is not a per listing cost as much as it a budget item. Whatever your advertising budget, make sure you hold it accountable.
If you're thinking about a budget for each listing, you're off the track. But don't feel bad, most real estate people never figure this out. The major problem is that the only tangible "inventory" we have is ourselves. Those listings are nothing more than a gamble that we can beat the clock, getting them sold before our client gets tired of us.
You need a gross advertising/marketing budget to promote your services. The sales components of your services are listings and sales. You stick them in there as fluff, if you want to know the truth. Your primary goal is to get potential clients to call you rather than your competition.
When you figure out how much revenue your co-op sales bring to you, and how much revenue your listings bring to you (your listing-your sale), you'll then see what percentage of your revenue it took to generate those bucks.
Now with a bit of finite math, you'll be able to see what percentage of what you spent goes to each transaction. Now you'll know what types of listings -- price, location, whatever -- make you money and which ones don't.
Nick, No rule of thumb. For us it's pretty much whatever it takes... that is productive and cost effective.
Also want to thank you for taking the time to comment on the advertising piece we did today. It's much appreciated.
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