There are a handful of real estate groups on Facebook where agents ask for feedback on products.
What should they spend their money on?
What products do they recommend?
One product wasn’t converting, what do they recommend instead?
It can be great to participate in any one of these groups and solicit feedback.
The problem is you have dozens of agents and vendors recommending dozens of different solutions so it’s easy to want to spend money on a variety of different things that might work.
Reverse Engineer Your Financial Goal
Before you start investing in a bunch of different tools and lead generation campaigns you need to set a financial goal for yourself.
Then, you can reverse engineer your numbers.
For example, the average sales price of a home in Irvine is $724,875. A 3% commission on that sale is $21,746.25. That means that if I want to make $300,000 in commissions this year I would need to close approximately 14 transactions.
On average, you should expect to close 1 deal for every 35 leads that you generate. That’s assuming you have an effective sales follow up process in place.
That means you would have to generate about 40 leads per month in order to hit your financial goal for the year.
Figure Out Your Business Essentials
There are certain things that I would consider business essentials. These include:
- A beautiful, mobile-responsive website
- IDX (like Diverse Solutions or IDX Broker) or a system to send listing alerts by email (like Cloud Streams)
- A way to capture seller leads (Cloud CMA has it’s own “What’s My Home Worth” landing page)
- A CRM system (like Follow Up Boss)
- An email newsletter (personally, I use Aweber)
At a minimum, these are the things I’m paying for on a monthly basis to build my presence online and reach new potential buyers and sellers.
Determine What You’re Willing To Spend
Once you’ve determined the cost of your core business essentials you can determine what you’re willing to spend to generate new leads.
Personally, I would invest in pay-per-click to generate new buyer leads and Facebook Ads to generate new seller leads.
In the past, a good PPC campaign converted at roughly 9 – 10% for us. That means that for every $100 we would spend, we’d generate 9 – 10 new buyer leads (via our IDX).
So if my own organic efforts are only generating 10 leads per month but I need to generate a total of 40 to hit my year-end goal, I should invest roughly $300 in a pay-per-click campaign to make up the difference.
Recommended Listening: Why PPC Should Be A Part of Your Online Marketing Strategy
You should only start to invest in different tools and different lead generation campaigns once you’ve figured out your core business expenses and once you’ve figured out your financial goal and the numbers you need to hit to reach that goal.
Investing in anything before you’ve taken these steps is a waste of money.
What’s Your Revenue Goal for the Year?
So, what’s your revenue goal for the year? Where tools and campaigns are you making an investment in in 2016?