For estate and letting agents, it’s all about new leads.
When your stock is low, business slows down. But how would you like a steady flow of valuation enquiries from both landlords and vendors so your business always stays ahead of the competition?
Of course, this can’t happen without some investment. A proverbial saying rings true here: ‘speculate, you can’t accumulate if you don’t’. In other words, a degree of risk is necessary if a real gain is to be achieved. The question most agents ask us is: how much should I invest to get the leads I require?
Here’s the formula:
Amount spent on your digital marketing campaign ÷ total number of leads = average cost per lead
Everything you do in marketing should be measured, especially digital marketing. Gone are the days when no one has any idea what return a marketing campaign will bring. You can understand how effective a campaign is by tracking all the channels through which your business generates leads, including calls and enquiry forms.
A simple way to go about it is to divide the amount you spend on digital marketing by the total number of leads you got last month – the result is your cost per lead.
We recommend you allocate £60 as an average cost per lead, which is something we comfortably achieve in our campaigns.
Now, look at how many leads you require to convert one into a client. Typically, one in three is a good target. So, for every three leads you get, one becomes a client.
If we assume your cost per lead is £60 and that you convert one in every three leads, your cost per conversion is £180.
For every new client you wish to sign up, you will need to invest £180.
At this point, it’s helpful to identify the average value of a client, which can be significant in the property world.
A sales commission of 1% on a property worth £100,000 would generate £1,000, so investing £180 to make £1,000 represents a good return. If you are based in London, where property prices start from £250,000, your return will be far greater.
Now, this is where it becomes interesting. What is your monthly target? How many new clients can you comfortably handle? If you need 10 new clients, this means you need to generate 30 new leads every month.
If you want 10 new clients, simply multiply 10 x £180 = £1,800. This is the budget you need to allocate each month to generate your 10 new clients.
Of course, these figures are just examples, and the results from your campaigns will vary from month to month and year to year.
As you will be aware, there are many external factors which influence the property market, and in turn how many people look to sell or let their properties. But if you get your formula right and put it in motion, your agency will never suffer from lack of business.
Tags: Conversion campaigns, Digital Marketing, Estate Agency, Estate and Letting Agents, PPC, SEO