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Real Estate Marketing Techniques: The Numbers Never Lie

By Than Merrill

Real Estate Marketing Tips – The Power of Marketing Systems

When evaluating the bare essentials of the real estate investing business, one cannot ever overlook marketing. Marketing is the root of all your business. Ninety-five percent of leads come from your marketing efforts- everything except those kick back referrals that a business cannot rely on.

In your initial marketing stages, the most important thing you can do is the proper research. It may sound tedious, but extensive research in addition to meticulous tracking will send your marketing into the next level, and not to mention bring you all the leads you can handle and more.

Real Estate Marketing Technique #1 – Choose Your Marketing Strategy

First, do some preliminary research to determine what marketing techniques you want to use – i.e. Direct mail, outdoor signage, print media, traditional broadcast marketing, etc. Next, target a certain demographic in your area that these marketing techniques will be directed at. Begin running your ads, sending out your letters, or putting up your signs then wait for the phone to ring. When leads come in, ask how they got your company’s name and keep track of all the different answers. They should be in accordance with the different techniques you decided to implement.

The records that you have tracked will be the numbers that will never lie to you. After you have gone through at least one marketing cycle, it is crucial to go back and evaluate every aspect of your marketing numbers. There are four numbers you should use to evaluate your marketing efforts.

To help you better understand what these numbers mean, I will use a real example of one of my marketing plans. These are my numbers for my door hanging campaign. I print up door hangers- which look like the ‘Do Not Disturb’ signs on your door at hotels- explaining what my company does and how I can help them. Then I hire people to walk the neighborhoods I have identified as my target demographic and leave them on the front door.

Real Estate Marketing Technique #2 – Determine Your Total Campaign Cost

This is the cost of everything from the design to the moment the door hangers are on the door.

Design Cost + Printing Cost + Labor Cost = Total Campaign Cost

$100 + $650 + $1,250 = $2,000

Real Estate Marketing Technique #3 – Figure Out Your Cost per Lead

After I completed my door hanger campaign, I went back and counted up all the calls that came in because people saw or read my door hangers. This is the total number of leads brought in by door hangers. I then divide my Total Campaign Cost by my total number of leads to calculate my Cost per Lead.

Total Campaign Cost / Total # of Leads = Cost per Lead

$2,000 / 20 leads = $100

Real Estate Marketing Technique #4 – Determine Your Cost per Deal

Next, I dig deeper into the numbers to determine how many properties I actually bought because of an initial call from a door hanger. Then I divide my Total Campaign Cost by the number of properties I bought to establish my Cost per Deal.

Total Campaign Cost / # of Properties Bought = Cost per Deal

$2,000 / 1 Property = $2,000

Real Estate Marketing Technique #5 – Figure Out Your Conversion Ratio

The last number of importance indicates how many quality leads I am getting from my door hanging marketing efforts. It tells me what percentage of the leads I bring in from door hanging that I am converting into money for my company. It is derived by dividing how many properties you bought by how many leads came in.

1 Property / 20 leads = 5% Conversion Ratio

Keep in mind that your numbers will increase and decrease with the magnitude of your marketing tactics. For example, your numbers will be much higher if you run a three month television marketing campaign than they would be for a three month bandit sign campaign. However, if all is done right the proportion of leads will reflect the change in budget. That is why, as a very general guideline, I like to say if we are at $100 or less per lead then we are doing an excellent job. Anything from a .05% – 1% conversion rate is good enough as long as you’re getting enough leads. On the other hand, if you only get 3 leads then your chances of converting at 1% are minimal and it may be time to try a different marketing technique.

Like in anything, the more you put into your marketing efforts the more you will get out of it. Work hard and pay attention to detail. Keep a close eye on your numbers and you won’t get in over your head on your marketing overhead.


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