It’s November, the beginning of budgeting and planning for a successful 2016. WAV Group studies the online effectiveness of many of today’s leading brokers and provides audits and advisory services on optimizing these programs. The true measure of online effectiveness is closing a transaction. Unfortunately, we have observed that closing a transaction is coincidental to online marketing and not a direct correlation.
The relationship between an agent and a consumer is akin to dating. Both parties must be attracted to one another. There needs to be a connection and the development of things like trust and confidence. It’s a dating game where decisions are based upon emotion rather than facts and numbers. If I were to build a lead conversion team for a real estate brokerage today I would start by doing a personality profile to find the types of agents who are easiest to like and trust. Smoke that in your lead management pipeline. Obviously this does not work for real estate because of the democracy of a brokerage culture. We are all equally qualified, right?
If you agree that you cannot force a relationship between a willing buyer and a random agent who gets a lead, then you can position the process of online marketing differently. Online Marketing is for Sellers, Recruiting, and Retention.
Online marketing is for sellers. During a listing presentation, the agent explains that buyers always use the Internet in the process of looking for property. Your firm will place the property on all of those popular-kid sites. This is so easy to do and say that I doubt any seller would be “like-wow! That’s amazing.” So you need to do something different than blast listing syndication because everyone does that. Heck, it’s a free service from every MLS in the nation. That is why I am so bullish on Buyside – it allows the agent to tell a seller how many buyers they are working with today who is looking for a home like theirs. If I am hungry to sell my house, I would choose the agent who has 10 buyers in their hand over an agent that plans to go shake the bush to find one. Show results from online marketing, not your online marketing plan. Tell the seller “every agent you interview is going to tell you about how they are going to plaster your home all over the Internet. I will be the only agent who tells you how many buyers our firm has shopping for your home today. Sign this listing agreement today and we will begin showings and fielding offers.” Ask Fox and Roach or Elliman how this is working for them.
Online Marketing is for Recruiting. Real estate agents know which broker does the best job of online marketing in a given area. Ask them. We have. It’s funny. What real estate agents “know” about online marketing is a perception, not a fact. Forget about targeting your online marketing to consumers on Facebook. Target the agents you want to recruit with ads that look like consumer ads. They will see you doing something that their broker is not doing and want to join your firm. If you are not showing your web stats when recruiting, you are doing it wrong. The nation’s top brokerages are hiring agents because they have more leads than agents to work with buyers and sellers.
Online Marketing is for Retention. WAV Group works with large firms. By their very nature, they have more website traffic and more leads because they have more agents and more listings. It is not a coincidence – size begets size. Brokers who publish reports about the number of website visits, volume of leads, and the effectiveness of online advertising will have an advantage at retention. What agent wants to walk away from all of those leads?
There are many pricing models for buying consumer facing advertising online. The truth is that every publisher considers the value of his or her audience differently. For example, one might expect that a consumer on a property search portal who is looking at property is more valuable than a consumer reading about the housing market on the Wall Street Journal. So publishers set prices.
Generally speaking, if you are paying more than $35 per lead generated, you are paying too much. (This is called CPA – Cost per action).
Generally speaking, if you are paying more than $.35 per click, you are paying too much. (This is called CPC – cost per click).
Do not ever benchmark on cost per impression. It’s meaningless unless you are a new brand that is trying to build brand recognition. (This is called CPM because cost per impression advertising is priced by 1000 views – so CPM would be cost per 1000 views). You really don’t care how many people look at your online marketing unless they see it and do something like visit your website (CPC) or inquire (CPA). Most online advertising like Google ad words is priced by CPM, but you need to measure your advertising effectiveness in terms of CPC or CPA – website visits and leads.
Your lead source ranking should look something like this:
- Phone – Sign calls are the #1 lead source. Get an 800 number and capture these leads. The data is valuable to the broker to do stuff like Buyside even when you are just passing the lead to the listing agent.
- Broker and Agent Websites
- Asset management – Fannie/Freddie
- Corporate relocation
- Listing Syndication.
- Online Marketing (CPC or CPA)
- SEO
Remember – your online marketing is for your listing presentation, recruiting presentation, and agent retention.
If you need help, contact Victor Lund, partner at WAV Group: victor@wavgroup.com
Things we will need you to provide:
- Your monthly budget for online marketing
- Access to your Google Analytics
- Lead reports
- Listing presentation
- Recruiting presentation
- Company report on online marketing.
The audit is a flat fee of $2500. We will provide benchmarks of like-sized firms. If your monthly budget is less than $5000 per month, please do not inquire. You are too small to benefit from consulting.
