Due to a plethora of marketing media options available to every real estate agent, it is becoming increasingly difficult to accurately measure the return on investment (ROI) on each one.
As a result, most real estate agents are likely to:
- Not measure ROI at all, or
- Measure everything together (collective ROI)
It is quite obvious that not measuring your ROI is a wrong choice to make so we won’t talk about that. However, real estate agents who are in the habit of measuring their ROI together are wasting time and money.
Understanding the individual effectiveness of your real estate marketing efforts is critical to the success of your business.
How is ROI calculated?
ROI is calculated by finding out how much you spend on a particular marketing effort (social media, blogging, paid ad) and how much money you make from that effort (leads generated and conversion rate of each). The higher the ROI, the more profitable and effective your use of media is.
Framework for Understanding Marketing Effectiveness
Measure ROI individually and not collectively
One of the reasons why it is essential to measure each marketing channel is because you can easily know which is working and which isn’t. By knowing which of your media channels is bringing high ROI, you can focus more on it and maximize it while on the other hand you can stop wasting money on channels not producing results.
Measure Effectiveness Based on Reasonable Timeframe
Because most real estate transactions take some time before being completed – sometimes up to a month – it is advisable to set a reasonable, but specific, timeframe to track an advertisement before determine its effectiveness.
Measure ROI based on Quantifiable Metrics
Once you’ve determined the timeframe needed before measuring the effectiveness of your campaign, decide how you will measure its effectiveness.
You might decide to measure the leads your campaign generated or the number of deals you closed as a result of the leads generated. Whichever you decide, just make sure your metrics are realistic.
In order to measure the media effectiveness in your real estate marketing, you need data. Lead generation is usually done with a lead capture form that collects the personal information of your prospect. But you need more than that for measuring ROI.
Ask leads who call, email or visit your office where they learned about your services or listings.
Depending on your marketing budget, some of the media channels available to you for marketing your real estate business are:
- Pay per Click Ads (PPC)
- Social Media Ads
- Content Marketing
- Search Engines (SEO)
Once the timeframe you have set for media effectiveness has been reached, compile all your data and measure your results according to the metrics you’ve decided upon.
You are to calculate the total cost of the advertising campaign you are investigating as well as the total number of leads and sales you’ve made through this campaign.
Compare your results to each other. Which of your channels brought in more ROI? Which didn’t? Use these results to fine-tune your next campaign in order to make informed decisions.
Did we miss anything? Share your thoughts in the comments section.