Re-defining ROI in the age of social media.

By
Real Estate Agent with Kimberly Howell Properties (210) 646-HOME

The Investment Building in Washington, D.C. sometimes between 1910-1920.

1910-1920 photo of the Investment Building in Washington, D.C. courtesy of NCinDC

What's the return on your investments?

After attending, the SABOR Town Hall Meeting and listening to Sean Wood and Rich Teplitsky of KGBTexas speak on the topic of social media, I've been doing a lot of thinking about some of the things I noticed while I was there as well as some of the snippets of conversation that my ears overheard from other people's small groups as they were gathering and getting ready to go.  Some of the audience was there to get an idea of what social media was, some were there to get more out of it, some where there just to see what the craze is all about.

Return on investment (ROI), is the ratio of gain or loss on an investment relative to the money invested.  In real estate, you often hear the term ROI being referred to around the hours and/or money we spend on any particular activity in order to generate business.  In terms of social media, I have heard many people question what the ROI is on it.  Whether it be blogging, Facebook, Twitter, Flickr, or even ActiveRain itself, social media is all around us, but there has been some serious conflicts over the quantifying of the actual returns of using it based on the investment you put into it.  There are plenty of success stories of transactions closed thanks to the many different forms of social media, but I think there's something else to look at.

Interaction.

As agents we spend much of our time looking to get in front of people.  To talk to them, to share our experiences, to tell them what we do, and to hopefully make them our clients (or at least a great referral source).  Agents are doing this all day long.  The girl at the grocery store, the guy pumping gas, the small business owner that you know through BNI - no matter where we go, we're interacting and building relationships which we work to turn into business.  Occasionally, the business falls in our lap - "You're a Realtor®?  I have a house I need to sell, can you stop over tomorrow?"  Other days, it takes a growth process of going from "that agent guy" to "my Realtor®."  We hear the word cultivation a lot when referring to the people we meet.  Cultivate the relationship, build the trust, get the business.

Social media is really no different.  Strangers will talk to you, friends will tell others about you, and building a sphere of influence is the name of the game.  As many people discuss over and over again, the trick is not to sell.  I definitely believe this to be the case, but this is not the point of this post.

So what is the ROI on social media?

First off, most social media activities is free.  So let's toss out the money part of the equation.  Let's talk about time.  Most people dabble in social media for a few minutes a day and get a little something out of it here and there.  Others dive in head first and are the proud flag-bearers of the "new wave" of the web 2.0 world.  I see why people get discouraged when the jump into social media.  You jump in say "hello world" and no one answers back.  Not at first at least.  It is a slow growth process that requires a little more time than showing up at the latest mixer and handing out your business card.

The difference between the mixer and social media?  The mixer ends at 8PM, social media never sleeps.  When you start putting those conversations out into the cyber-world they last - in many cases for eternity.  You might do something at 8AM, but someone may not interact with you on it until 10PM the next day.  It allows for a conversation to last, to stick around, and to be discovered by others at any given time.  Your conversation doesn't end when you get in your car and drive home.

Let's look at an example.

Let's talk Twitter for a few moments.  Some of you love it, some of you hate it, and some don't get it.  I try to get on Twitter quite a bit.  I use it for a couple of different purposes as well.  I have conversations with locals, agents, and friends all over the world, but I also use it as a news source, a feed reader of sorts, and a way to track stories I want to know more about.  I've also used it to get direct access to information about specific posts I'd like to make (if your local news is on Twitter, make friends with them - best source for Localism posts ever).  It serves me well, but I'd like to give a few specific examples:

Getting to know your neighbors - I have got to know quite a few of my local San Antonio neighbors.  And in getting to know them, I have built friendships (and everyone remembers their friends a bit more than a stranger, right?).  I have built a source of contacts from several different industries.  Need a programmer who runs circles around my head?  I know a few.  Want nutrition and fitness advice and training?  If my guy can't do it, no one can.  Need PR/advertising?  I got the guy for you.  Need a roofer?  Got him.  Want to know what restaurant has the best beer in town (and some awesome food)?  I can give your directions and tell you who to ask for when you get there.  Much like many of us maintain some sort business to business directory, Twitter is just that for me.  Expect I know these people and talk with them about normal everyday things too.  They're my friends, not just names in a database.

Becoming the "go to" for people - Although it's always difficult to tread the boundaries of what you can and can't say to someone who is not your client, you'll find you become a great referral source for information.  I often get questions asked that I have written posts about or recently had a conversation online about.  I can easily point someone in the right direction.  If I haven't done it, I probably know someone who has spoken about it - so I become an informational referral source.  And what does that do?  It creates a sense of trust and value.

Knowledge.  Plain and simple - I entered the real estate business on the down side.  Instead of twiddling my thumbs, I dove into blogs and conversations and learned as much as I could.  I asked questions and got answers.  Agents are much more eager to help a new agent than I ever dreamed.  I have learned some great bits and pieces from people I think are the best and brightest.

Want to see your name in lights? - Ok, you may not get your name on the marquee at Madison Square Garden, but the internet does provide a certain level of fame.  Think of some of the names in real estate you see everyday on the internet.  The other great way to "get noticed" is by the press.  As I've witnessed first hand, the press and our associations are out there and they're watching and reading.  To tie two examples together, a guy I know only via Twitter once recommended me to the local news who had put out a tweet looking for agents for a piece they were putting together.  I didn't get the spot, because they had already found someone, but a guy I've never met tried to get my name out there for me.  Powerful, right?

Recurring Online Interaction.

That's my new way of viewing ROI.  Everyday a conversation starts that I can be a part of or not.  Everyday, snippets from a conversation I had a few days ago comes back to me and we pick it up from there.  The interactions begins to build who you are, not just what you do.  Last night I answered a tweet of someone I've spoken to here and there.  It wasn't real estate related at all, but within a few tweets, she made a joke about me finding her a "cheap" home.  Soon we were discussing the thought behind it.  I have never said "hello, I'm a real estate agent" to her, but she knows and made the reference to it in our conversation.  Will she buy a house with someday?  I sure hope so, but in the meantime, I think she's funny, interesting, and a nice few moments of conversation once in awhile.  What I know for a fact though, is that she knows what I do, enjoys talking to me, and would probably think of me for her real estate needs...because I am there all the time.  In front of her, on her screen, and top of mind.  I don't have to send her a fridge magnet once a month to remind her that I'm out here.  She already knows it.

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Rainmaker
504,688
Teral McDowell
Referral Patners LLC - Murphy, TX

Matt, I found your post full of good information and the comments from others interesting as well. I enjoy the social media and plan to keep at it.

Jun 20, 2009 05:07 PM #17
Rainer
13,241
Julie Boyd-Elrod
Keller Williams Realty - Orlando, FL
Realtor®, Broker Associate, and Investor

Matt, well thought out post and very informative.  The more we utilize programs to post once and populate all the social media sites we are members of, the better use of our time in getting our message and communication out there.  Anymore, it doesn't have to take lots of time for the effective use of social media so the ROI is improving.

Keep your great posts coming.

 

Jun 21, 2009 01:02 AM #19
Rainmaker
272,035
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Mike - I had a feeling you'd agree with this.  You're one of several people who really helped me get this perspective as I went along.  Spending time trying to quantify some things just doesn't work if you ask me.  Sure you can see results, but can you really connect all the dots and say that "in exactly 13 tweets, which took me 12 minutes to write, I gained a new client?"  In some cases, I'm sure it's possible, but overall social media's benefits are a bit more hidden than that.  How many people read those tweet and follow those links, but don't directly interact with you?

Sheldon - I'm definitely not advocating social media as the be all, end all.  I don't think anything is.  Well-rounded is a god way to put it.  Little of this, little of that - mix them all together and let them work their magic.  I do find comfort important in any method you choose to "prospect" or "advertise" or "make yourself available."  If you're not comfortable it shows.

Glenn - I agree with you.  When I first got into social media activities, I found that most of my connections were direct with other agents and people within the industry.  As time passed, I got more interested in discovering the local side of things.  I did and I now interact with locals/agents on Twitter at about a 1:1 ratio now.  I've also introduced some of the locals to some of the agents for different reasons.  I introduced @MikeMueller and @zipvogreg to some of our local (state in this case) hockey fans during the Stanley Cup Finals.  I introduced a local writer and lover of all things social media to a friend of mine in Austin who is in the industry.  That relationship provided some results which I will be announcing soon  and also brought me closer to the loca writer.  We're having coffee this week to discuss some opportunities.

Christine - I think most computer based activities are a little harder to quantify than most human to human activities or money spending activities.  Because the internet is open 24 hours, your "investment" may be working for you while you sleep.

William - I'm no Facebook expert as I avoided it for a long time for various reasons, but a great resource for Facebook ideas and information is Mike Mueller (seen in the comments up above).

Jeff - I look at it this way.  There's a reason they chose the name "viral" for a video that spreads like wildfire across the internet.  You may be communicating with people without even knowing it.

Lane - That's the other problem with social media that I see.  When people "try" it, they enter a few words, hit send, and wait for the leads to pour in.  We all know it doesn't work like that.  I think some of social media's own hype helped create a false perception in  some people's mind that it was the cure all they had been looking for.  When it isn't they abandon it quickly.

Gary - You're right about it not being local enough...that is, until you make it more local.  Most bloggers are working ridiculously hard to bring their tiny local communities to light on the internet.  It used to be if you wanted info a a town or other small city, the info out there was pretty rough.  Now you can find info on communities with a population of 185.  The more information we generate on the internet, the more complete the modern encyclopedia of our world becomes.

Cameron - You're not making exuses.  It's a common thing for most people.  Especially when you're first starting out.  Blog posts used to take me hours to think up, write out, and then add photos, layout, etc.  Now I'm much better at them and they take less time.  I think the biggest investment in time is you initial investment.  As you get more used to it, it gets better.  Even then, there are times when you just don't have time.  Like anything we do, it's about learning to adapt to our schedule and priorities.  Real estate requires a lot of adaptation of our time and schedules.  It's all about making it work for you.

Mathias - Listening is a huge key.  Both online and off.  I mentioned the story of the girl who I know on Twitter above.  When I first started following her, she was a random local, just followed her because of her residency.  One of the first things she asked was "do I know you?"  I told her she did not, but I often pick random locals to follow to keep up on what's going on in my city.  Over time, I learned a lot about her.  Now we have conversations.  At first, I would just read the random posts she threw out there.  I might respond if it was something of interest, but mostly just sat there listening.  Now we initiate conversations with each other.  And it works both ways.  She initiates as do I.  To me that sums up how social media can and should work.

Mike - I'm not against tracking leads and where they're coming from.  I always ask people how they heard of me and what made them pick up the phone or send that initial email.  I find most people online can't be very specific though.  "I was on Google and your name came up."  That's the most frequent response that I hear.  Was it my blog, a mention on Trulia, my company's website, Google profile, Flickr, a click-ad?  No one seems to remember the details.  They just know it was on the computer.  When people do remember specifics, it's usually because they read something I wrote (ie, a specific article from my blog).  I think your basketball reference is a good fit for me.  I've been toying with computers since I can remember and when the internet came, I was there to play with that too (even at slow modem speeds).  I enjoy what I do, so it makes it comfortable for me.  And that comfort shows in my interaction with those people.  Comfort breeds more comfort and eventually (as long as there's good reason for it) trust.  If you're nervous and awkward and don't feel comfortable on the internet, it's probably not the best place to be interacting with people.

Roland - My theory has been that everything works.  It's just whether or not it works for me.  The companies that call me every five minutes looking for my monthly fee for this or that new service or product.  Their products must have some merit or they wouldn't stay afloat for 10 minutes.  Are they good products for me?  That's the question that every agent needs to answer for themselves.

Jenny - Reviewing your analytics will always give you a good idea of what's working and what's not on a website, as you said, you know I read mine religiously (have a post coming up about something I've been noticing actually).  My traffic has grown, slow and steady.  I've been found directly through it and also through the "you're everywhere" type of search.  The last listing I took was from the "omnipresent" feeling the client got about me.  Her adviser when she was looking for an agent?  A former agent.  He told her to pick me and we talked quite a bit (him and I) about theories in real estate marketing.  It was a pleasure to see someone understand what I was doing and why that had their hand in the industry at one point in time.

Teral - You just made me happy as can be.  Why?  Because you mentioned the "comments."  I've said it a million times before, but the heart of any post is in the comments.  When the interaction there begins, it gets good.

Erica - See my comment to Jenny above about the "everywhere" vibe.  I wrote this mainly because people who can't quite quantify the ROI in social media wind up balking at the idea.  They want the cold, hard facts and although you can analyze a lot of data and get some good answers, you can never truly see what the investment was or what the exact return is when it comes to social media.  Perhaps someday someone will invent some sort of time tracker for social media and there will be some way to analyze what you're doing, but even then I don't think it will answer the question directly of what you get in return for your investment.

Jun 21, 2009 01:53 AM #20
Rainmaker
272,035
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Julie - I agree except for the part about "post once and populate."  I don't think the same information being posted everywhere is necessarily a good thing.  What I see as useful is being able to tie each piece together.  I often link from my main site (www.RErockstar.com) to posts here and on my outside blog (and vice versa), but I don't populate both with the same information.  Google doesn't like that very much and I want both blogs to be full of fresh content anyway.  I'm not sure if that's exactly what you meant, but I wanted to comment on it none the less.

Jun 21, 2009 01:57 AM #21
Ambassador
1,631,083
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

We live in a world that runs now in real time. A Tweet beats a fridge magnet, and a Facebook communication is faster than email and immediate. Your comment to Julie is also right on.

Jun 21, 2009 02:34 AM #22
Rainmaker
339,812
Ann Cummings
RE/MAX Shoreline - NH and Maine - Portsmouth, NH
Portsmouth NH Real Estate Preferrable Agent

Hi Matt - I just came across your post and did a huge double-take, as I had just seen that picture and this post about an hour ago, and I didn't think it was yours I had seen.  I realized I'd read Mike's post, and now see that it is a re-blog of your post.

Mike point in his comment about recurring interacion is huge.  And that doesn't mean the same old tweets or comments showing your latest posting on AR or your latest tweet showing up on FaceBook.  It's about REAL interaction with others, consumers and agents, etc.  The more one takes part in SOCIAL netowrking and SOCIAL media, the greater one's ROI. 

Ann

Jun 21, 2009 02:36 AM #23
Ambassador
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Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Matt.... well done.  The biggest thing that many need to understand is that it can take time. Sometimes you might be ignored when writing or trying to talk to others.  In many cases, it's when you find your voice in a blog, that people will follow... or in other ways when it comes to social media networking. I have backed off some in the last 6 months when it comes to blogging.... it takes times.  In regards to Twitter?  I still don't get it at times, and I think it works for some. Overall, it takes a lot of time to do a lot of this.  But to me, it's worth it and my return has been great after my first year.  Very good post.

jeff belonger

Jun 21, 2009 02:41 AM #24
Rainmaker
272,035
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Joe - My original definition was going to be "Real-time Online Interaction" but I decided to change it when I start thinking about the 24 hour nature of what we say and do on the internet.  It is real-time when we're there, but it can work when we're offline as well.  One of the dangers to social media that I do see is that immediate-response factor.  For instance, I have a client who prefers text messaging to every other form of communication.  He's always right on top of them and gets back to me instantly when I text him.  The other day, I didn't hear from him after asking him a question via text.  The day passed and turned into evening and still no response.  Not like him at all.  I began to worry a bit about him, knowing his usual instantaneous responses.  In the end, he been called into work and was stuck in a place where he couldn't text back.  Everything was ok, but it was a bit nerve wracking to wait.

Ann - Thanks for pointing out the re-blog, I usually don't notice when I've been reblogged unless some one mentions it or I happen to go to that person's blog (I'm a frequent visitor to Mike's blog, but hadn't yet today).  Mike is one of the few people I might actually call a social media "guru."  He is a wealth of information and if anyone is looking to further their social media interaction or understanding, he's one to follow.

Jeff - If you look around ActiveRain you can see the effects of a better housing market in the number of blog posts by its users.  It takes time, so when people get busy, it does tend to slow down.  I try to keep finding time, no matter what I'm doing, even if it means writing a few tidbits of ideas in a file I keep on my desktop.  When I first started blogging, I felt invisible.  Over time though, my site has grown and so has its readership (and results in Google as well).  It takes time, but to me time is a great investment into anything.

Jun 21, 2009 02:51 AM #25
Ambassador
749,610
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Matt....  I agree 110%...  I agree it takes time and that it is a great investment.  My outside blog, www.fhaloansfhamortgages.comis doing much better.  I only started this about 1 yr 3 months ago and it has slowly climbed up the google search of FHA loans. It's now on page 4...  and yes, even when I am busy, I try to get something out there... but sometimes, life throws us curve balls and you just can't find the time. If you have seen my most recent post or anything on facebook, I was thrown that curve ball.  Overall, I hope my first comment didn't sound opposite, but that I did agree with your whole blog.  thanks

jeff belonger

Jun 21, 2009 03:04 AM #26
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The Somers Team
The Somers Team at RE/MAX Access - Philadelphia, PA
Real People. Real Dreams. Real Estate.

Matt - Wow ! You are putting out some well-written, thought provoking blogs as can been be evidenced by the comments and the discussion in the comments.  I agree with you regarding the benefits and opportunities in social media.  I think at the end of the day, it is pretty simple... it is just another way to meet people, to make connections and build friendships.  In the service industry, that is what it is all about to build a business.  I think when a seller thinks about selling their home, they will think about contacting two people.  Social media can help Realtors step into one of those two people !  I really think Social Meida can help Realtors grow their business and build their presence in the community.  Great post !

 

Jun 21, 2009 03:57 AM #27
Rainmaker
1,431,210
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

One problem with the social media is it is constantly changing.  So are consumer taste and they way we use the Internet.  And if you try to be first on the wagon with the next great thing you may be jumping on the wrong wagon.

Jun 21, 2009 05:14 AM #28
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670,099
Rene Fabre
First American Title - Seattle, WA
Marketing in the Digital Age

Matt: Great post, I ponder social media a lot... Getting a handle on the 'asynchronous' conversation is one of the new challenges of our time. I speak to a lot of realtors about internet marketing and social media, and the ROI question comes up almost always. My reply, "I don't really have an answer for you because I am still figuring that one out for myself." But, let me put it to you this way... "What are the consequences of not participating online?"

We're in an age a tremendous change and life is redefining itself... It's OK not to know all the answers. But we'd better give a lot of thought to the questions... and you are... thanks!

Rene'

Jun 21, 2009 05:49 AM #29
Rainmaker
478,373
Lana Robbins Realtor ® Licensed Real Estate Broker
Aloha Kai Real Estate - Clearwater, FL
Florida and Washington Real Estate

It may be difficult to calculate since there are so many variables plus tangents. It also depends on what you want out of it.

Jun 21, 2009 10:51 AM #31
Rainer
14,383
Mathias Bergendahl
Pinellas Realtor(r) Organization - Clearwater, FL

Matt,

It appears many are under the impression that social media marketing will take too much time, and concern I fully understand. It doesn't have to, though.

A week or so ago I wrote an article aimed at suggesting an initial network of social media platforms. In my classes I've taught how you can set up your blog, have your website, and then syndicate your messages automatically to Twitter, FaceBook and LinkedIn. That way you save time, and you keep all your profiles updated and fresh so to say. That then leaves time to do searching - and I agree with you, Twitter search is a great tool to catch conversations.

Mathias

Here's the article I wrote. Hopefully it can benefit some who are in the process of getting started.

 

Jun 22, 2009 12:42 AM #32
Rainmaker
272,035
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Jeff - Just read your post.  Hope he's getting better day by day.  I can imagine it was a tough weekend for everyone.

I did know you agreeed and in fact was just agreeing back with a few side thoughts.  There will always be times when blogging/social media has to be put to the side and doesn't fit into our daily routines.  I hear the "time" issue a lot from people who aren't involved in any type of social media - saying they can't justify starting because it requires time.  It's hard to get over the hump and dive in, but I've found that most people that do wind up enjoying it - both for personal and business reasons.

Chris and Stephanie - Thanks.  My head's been full of theory and thought lately, so I've just been putting it out there to see what everyone else thinks.  I hate to say it, but I think there's even an advantage for agents who just fill their days with spam-style marketing.  The biggest voice often gets recognized first, even if they don't have much to say.  I don't agree with that element of social media, but I'm sure some people will have success with it.  I'd rather be a smaller voice, but already be valued for my worth to the transaction before I even meet the potential client.  Social media allows for that.

Gene - It is ever-evolving, but that's natural.  With it being a "free" investment, there's not a lot of risk associated with being first on the scene to the latest development.  Plus, the more you do, the more natural it becomes - so when something changes, it often still seems familiar enough that you can grasp the concept of it quickly.

René - The ROI question is the root of everything in real estate.  "What's in it for me?" as they say.  While I do think it's important to receive value from everything you do, I just can't justify always needing to label everything with a price tag.  There's a difference in my eyes to value and a dollar amount.  A dollar amount is value, but value does not have to equate to a specific dollar amount.

Erica - I definitely think you do.

Lana - I think it also becomes hard because what you're actually doing is a bit more abstract.  Having a buyer in your car...that's concrete.  You spent x hours with them, drove x miles, used x gallons of gas, made x copies at x cost per copy, etc.  Where's the x variable in social media?

Mathias - I have to run out right now, so I'm going to skip your article until I can spend some real time reading it.  I do enjoy the thought of a primer for newcomers - what's good, what's garbage - the basics you need to get going.  The presentation at the SABOR Town Hall Meeting was like that, although was still meaty enough that someone who has some experience could enjoy it and walk away with something as well.

Jun 22, 2009 02:42 AM #33
Rainer
26,864
Chris Rooker
Kline May Realty - Harrisonburg, VA

I completely agree! Social Media is more than just tweeting and waiting. It pays to have a strategy in your social networking, because if you don't have a strategy, you will be wasting a lot of precious time. The more quality time you put into the relationships you build online, the more you will get out of it. It is hard to put a number to it, but I'd say social networking is priceless.

There are also ways to set up social networking so that it works for you automatically, like feeding blog posts to Twitter, or feeding Twitter updates to Facebook, or having your new listings pop up on other networks. Amazing stuff.

Thanks for this post! Very valuable information here!

Jun 22, 2009 06:33 AM #34
Rainmaker
1,526,697
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

Good post, makes you think.  How about you get out what you put in?  Hopefully more, if you're the 'go to guy'.  Realtors want instant results for everything.

Jun 22, 2009 07:15 AM #35
Rainmaker
272,035
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Chris - I'm not a huge proponent of most of the automation behind social networking, but I think if combined with real-time conversation, it can work.  I always think that people automate too much and then it just becomes robotic and boring.

Lyn - The quest for instant results is one the biggest problems agents face.  Perhaps it's the result of many years of "easy going" for agents who got used to just getting a license and watching the clients roll in.  I think everything is a you reap what you sow kind of situation in real estate.  You do nothing, you get nothing.

Jun 22, 2009 02:41 PM #36
Rainer
13,241
Julie Boyd-Elrod
Keller Williams Realty - Orlando, FL
Realtor®, Broker Associate, and Investor

Matt, point well taken.  Thanks for taking the time to comment.

 

Jun 25, 2009 01:34 AM #37
Rainmaker
272,035
Matt Stigliano
Kimberly Howell Properties (210) 646-HOME - San Antonio, TX

Julie - If there's one thing I'm good at, it's commenting.  Thanks for coming back and reading the reply, that's something I really love.

Jun 25, 2009 02:06 PM #38
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