For years Brokers and agents have spent countless dollars marketing in print. The main mediums being: Local Newspaper's, Real Estate Book's, Post Cards, Flyers, Door Hangers, etc. Their main purpose has been to generate phone calls/contacts from prospective buyers/sellers and most importnatly, keep the agent's name "top of mind". As far as we are concerned - it works, right? But how do you truly KNOW?
In this article - which may turn into a series, I will break down a few myths/facts about print and web marketing. Many brokers are transitioning their marketing dollars from "ink to links", but are they doing it fast enough? And if not - why?
To do this effectively you need to know your cost-per-lead. That is the cost of your advertising, divided by the amount of leads generated. For example, a $400 postcard mailout, gets you 2 phone calls. So the CPL for that is $200 bucks. If you run an ad this week, and you receive 15 calls on a $120 ad, your cost per lead is $8. If you spend $60/month on your website and receive 35 contacts, your CPL is $1.71
So, knowing that nfo, we can work the numbers in reverse. Just think back to those days when you were a new agent making 100 calls to get 1 appointment. Take X amount of dollars per month, divide it by the CPL for ad source, should then equal "N" generated leads. So for example, if I wanted to generate 200+ leads via any of the above sources this would be the cost: x/y=n
(website) $500 / $1.71= 292 leads
(print) $1,600 / $8 = 200 leads
I know postcards have a greater value to us -because we want that "1"deal - but is that smart advertising? Most advertisers look for greater return on their dollar. However I will propose a cost effective way to manage the postcard adertising below.
First let's breakdown the specific targets of our marketing:
Buyers - Sellers - "top of mind" (i.e. keep your name out in your marketing area)
Buyers tend to be generation X/Y, echo-boomers and Boomers. Sellers tend to be more towards the echo-boomer, boomer age, for the nature of this article let's call them "civics". We can agree that we want everyone in our market area to know our names as that area's specialist.
As we have seen in the last few years, the buyers are not coming from the paper anymore. As of the 2006 NAR buyers survey, 80% of buyers begin their search online. Yet brokers on average are spending 6% of their marketing budget in this media. Does that make sense? Sort of.
First off, many of our marketing tactics on-line are free. Craigslist, postlets, etc. Do not charge or are very low cost. Furthermore the average website upkeep costs $55-$75 a month, not including set-up fees. In retrospect a just-listed postcard to 400 homeowners or targeted buyers may run you around $316. From the onset we can see that the on-line spend is going to be less than our print.
Some differences between web and print advertising:
The web-site is a 24/7 billboard for your business; a postcard is a one time shot at a deal. But we continue to do them. It does make sense to, especially considering one deal can pay for the post cards 10X over. However, do you have a website? Quite simply, if you are spending money on postcards and you don't have a website - your marketing spend is upside down and wrong. You must correct it. Once you send out that postcard with your web address on it, you can now make a broader reaching statement that will drive traffic from buyers/sellers/ and curious "stroll-ins" because of the message. What message you ask? perhaps: Log on to West Palm beach's premiere real esate information site, find recent sales, home for sale, community activities such as the girl scouts bake sale next month, and more" - Not your typical real estate site, log on and learn more! Brought to you by....Free and no personal info is required.
(I can hear the sighs and screams from here) LOL. Look folks, let get this straight - why are we losing our sellers and buyers to these lead farms? The answer: They give the consumers what they want. So if you want to stop spending hundreds of dollars a month on leads, get the info on your site and use that money to promote your site.
Sellers: They are civics, but they also use websites - we only need to look at the success of companies like Zillow, Housevalues.com etc to prove that home sellers are going on-line too. How are these companies getting our sellers? They advertise on TV, we pay them a few bucks per lead, and they give us the seller. Sellers are also echo-boomers. This group is tech-savvy and wants to do things on thier own, almost as bad as generation X/Y do. They want leveraged services, so you need to approach them from a service/value angle. You need to offer them the housevalues service, the zillow service easily from your website.
Classified ads: We all know, deep down in our hearts, we only use this to make our sellers ego's happy. We also run them to make our egos happy. But we all know that it is just "face time." But we have to do it - or do we? Sellers want to be in the papers because that's what they are used to - but as professionals, we need to enter that listing appointment, explaining to the seller that buyers no longer come from the paper. We need to build a case for our website's, our web marketing and our service after the offer. Advertising homes in print is a waste of marketing dollars. The true print classified is not dead! What you want to do is run an ad in the paper, a group ad perhaps - and redirect buyers to see more homes on your website. Instead of 5 ads for 5 houses, make one ad for your website driving buyers and sellers there. Many times the large ad will sell for less than the 5 ads together and you can get your message out more effectively. Also, the larger ad attracts more "eyeballs" than the small column ad.
PPC: Pay per click, and banner advertising: VERY essential. VERY easy. Go to Adwords check it out, I'll make a separate post this week on how to use it. BUT - Google ahs made the interfact very intuitive and it does most of the work for you. For starters, set up your account for $5-$6 bucks a day, that's only $180/month. Well worth the cost. This is equivalent to your typical classified ad but way more effective. Why you ask? Well you are getting a targeted consumer click, but most importantly - you can track EVERY click back to google and then apply a cost per lead.
Other major alternative: Trulia.com, even better than a google adwords ad. Trulia is a national real estate search engine. Most of your listings are probably on there and you don't even know. What they do is better than any other alternative out there. They take the listing and link directly back to your site. thats' it. Free. No sign up form for the buyer. no lead fee for you. You can spend a few bucks per listing and have them featured for your area. They are stilling rolling out new markets - so keep an eye on them. I will also post a future article on trulia, a company i view as a truly broker friendly, safe marketing avenue. i foresee them to be the destination for homebuyers who don't want to scour 15 sites for listings. But still go to the listing broker directly. It is a great tool for buyer's agents too.
This article is already too long. i'll flesh out some spots this week. I look forward to questions and comments.
ciao! - Pierre