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 2 most common questions we get asked by agents are:
We will answer both of those questions below.
When it comes to deciding how much money you need to invest in your marketing campaign, there are 5 steps you can follow:
How to plan your investment according to the level of returns you want
1. Identify your cost per lead
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.
For example, if you run a Facebook lead campaign, offering a free download, you may expect to pay between £5-£10 per lead. If you run a Google Adwords campaign, you may spend more per lead, depending on the areas you cover.
TIP: Watch the video below to learn more about the type of leads you should be attracting and the type of content you should be creating to attract those leads:
2. Identify your conversion rate - leads to sales
Now, look at how many leads you require to convert one into a client. Typically, one in five is a good target for a hot lead. So, for every five leads you get, one becomes a client.
However, a campaign which aims to attract many leads for a low cost per lead, will result in a much lower conversion rate. The conversion rate depends on the intent of the lead and where in the sales cycle they are.
3. Identify your cost per sales conversion
If we assume your cost per hot lead is £60 and that you convert one in every five leads, your cost per conversion is £300.
For every new client you wish to sign up, you will need to invest £300.
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 £200,000 would generate £2,000, so investing £300 to make £2,000 represents a good return. If you are based in London, where property prices start from £250,000, your return will be far greater.
4. Identify your conversion rate - leads to sales
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 50 new leads every month.
5. Set your budget
If you want 10 new clients, simply multiply 10 x £300 = £3,000. This is the budget you need to allocate each month to generate your 10 new instructions.
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.
Now, what are the best ways to generate leads for real estate agents?
TIP: Read our blog on 3 Different Types of Digital Marketing Campaigns that will grow your business fast!
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