According to the 2015 Real Estate Advertising Outlook by Borrell Associates, real estate agents and brokers spent $13.9B in advertising, 75% of that on digital assets. Given the industry’s proclivity to become prisoners of every shiny-new-thing movement, it should be no surprise that such unbalanced saturation in spend creates a lot of wasteful mistakes. In order to avoid many of these mistakes in your future, below are five topics which have cost many untold fortunes in time and money.
1. Trying to ‘beat’ Zillow Group (ZG)
First, acknowledge your role in real estate and remember: you can’t compete where you don’t compare. You’re not competing with ZG unless your name is Realtor.com or an extremely well funded up-and-comer.
Second, understand your competition. ZG is aligning itself with the most successful real estate professionals. These professionals are measured by advertising dollar spend capabilities relative to location and customer service performance metrics. You’re competing against them, not ZG.
Thirdly, act. Recalibrate your focus on how to better engage your contacts and turn them into happy clients. You’ll realize your unnatural disdain for ZG has been counterproductive for most and unhealthy for some.
2. Producing Content For The Sake of Producing Content
People engage over insights and opinions, so provide some! Make your work remarkable to the point it invokes emotion.
Know who your audience is and talk with them not at them. Respect your audience by researching your topics like you’re being graded for accuracy and relevancy.
If you can’t commit to the above, hire someone who can. Take pride in your work and your message.
3. Playing Beta Tester
Perception: You get to try new products before wide release and/or you like the cutting-edge feel.
Reality: You could be spending your time and money on non-dollar producing activities. As in any situation, ask why it would make a difference in your business in the long run.
4. MORE Lead Generation
The chart below represents number of existing home sales per year over the past 20 years:
Notice the trend line laying flat as can be at 5M (homes sold) despite the volatility caused by the housing market crash and its grudging recovery.
Trying to quantify the number of “leads” being sold to real estate professionals can safely be measured in the multi-billions of dollars, perpetuating an influx of even more lead generation companies and services.
However, deductive reasoning leads to believe that the same ‘new leads’ exist in numerous databases before committing to transact. And data shows most real estate professionals would rather spend money on new leads rather than commit to the processes and systems required to cultivate what they already have in their database(s).
Conclusion: Focus on lead cultivation.
5. Focusing on Cost Per Lead (CPL) Rather Than Return on Investment (ROI)
How much do your leads cost?
How many leads can you get me for $500?
Your CPL estimate is higher than Lead Machine Inc., so I’m going with them!
Do you find yourself asking these questions or making similar statements? You may suffer from OCPLD (Obsessive Cost Per Lead Disorder). It’s OK, you’re not alone and there is good news. You can break this pattern by understanding it is but one variable in a greater equation called: Return on Investment.
And it works like this: (Revenue-Cost) / Cost = ROI
Once you have calculated your ROI, you can truly begin to see the impact, or lack there of, a cost per lead has in the equation. For example, I don’t care if my CPL is $0.01 if my conversion rate is low. In that case my $0.01 leads aren’t worth a thing because I’m not converting them. On the flip side, I also don’t mind if my CPL is $5,000 as long as they generate an ROI I determine worth the time and effort to convert.
Focus on the variables you have greater control over and we can beat OCPLD once and for all! #beatOCPLD