| The biggest challenge for most real estate agents is | | | | each advertising effort. For each ad you should be |
| generating leads. They can be elusive, hard to come | | | | able to track the leads so that you can have a clear |
| by, and downright fickle. Add in the fact that there are | | | | picture of what your cost per lead truly is. With most |
| 20, 30, 40 other agents in the area that are also | | | | mail or print advertising it can be difficult to determine |
| looking for those leads and it would seem a very | | | | how many leads are being generated. If you get a |
| daunting task to get even one. | | | | lead, that person may not remember where they saw |
| This is why many real estate agents will try almost | | | | the listing they are calling about or how they came to |
| anything, and then end up spending too much, for leads. | | | | find you. If they drive by the house and simply grab a |
| Real estate is a tough business and every dollar and | | | | flier or keep the house in mind for a later look you will |
| minute spent needs to be as productive as possible. | | | | never even know they were there. Many buyers are |
| Without knowing whether or not your advertising | | | | researching homes on the Internet these days and the |
| campaigns are generating leads within your budget, | | | | majority of agents have no way to capture those |
| you will be throwing your time and money right down | | | | leads and in turn calculate the effectiveness of their |
| the drain. | | | | sites. |
| When evaluating ad campaigns agents may determine | | | | One way an agent can track their advertising is by |
| what their cost per lead is but not what that cost | | | | using a call capture hotline. A call capture hotline will |
| should be. You need to know what your budget per | | | | allow agents to track their leads, measure their ad |
| lead is before you can determine if an ad campaign is | | | | effectiveness, calculate their cost per lead and make |
| successful. In order to figure out what your budget per | | | | sure they are staying within their budget for the leads |
| lead should be you will need to know two things - your | | | | coming in. A call capture hotline uses a toll free number |
| advertising budget per closed deal and the number of | | | | with extensions that allow agents to offer different |
| leads it takes you to get that deal. | | | | kinds of information that would be of interest to buyers |
| Industry experts say that an agent's marketing budget | | | | and/or sellers in their market - free reports, property |
| should be 20% of your Gross Commission Income. In | | | | information, special offers, etc. |
| order to figure out what that 20% translates into for | | | | When a call is placed into the call capture hotline |
| your business first take the average selling cost of the | | | | extension the details of the call are captured. This |
| homes that you are working with and multiply it by | | | | includes the extension dialed that will correspond to a |
| what your average commission side is for each sale. | | | | particular ad, the date and time of the call as well as |
| To keep things simple let's say the average sale price | | | | the caller's phone number. A name and address |
| is $200,000 and the commission is 2%. Multiplying those | | | | capture feature is usually available as well. At the end |
| together will get you $4000 of Gross Commission | | | | of the week, month or whatever interval an agent |
| Income. Now to find your marketing budget multiply | | | | chooses, reports can be run to see how the ads |
| that $4000 by 20%. In our scenario that equals $800. | | | | performed. An agent can easily run those reports and |
| This means that your marketing budget for that home | | | | see exactly how many leads were generated. Agents |
| should be $800. So now you know what your budget | | | | can get reports and see every action taken by the |
| per closed deal should be but not yet your budget per | | | | caller - what extension they entered, what they |
| lead. | | | | listened to, if they left a message or requested a fax |
| Your budget per lead will be determined by how many | | | | document. This will also help determine the quality of |
| leads you need in order to get that closed deal. The | | | | the leads. |
| national average is 24 leads before a sale. That being | | | | Once an agent knows what their budget per lead is |
| the case we can divide our budget per closed deal of | | | | they need to be able to track their advertising so they |
| $800 by 24 and get our budget per lead - $33. So in | | | | can determine what they are spending per lead for |
| our scenario, if this agent is spending more than $33 | | | | any given ad campaign. When using the call capture |
| per lead, their advertising campaign is not working for | | | | toll free number on every piece of advertising they |
| them. The leads it is producing are coming in at too | | | | have - fliers, postcards, home magazine ads, sign |
| high of a cost to make it a good ROI. | | | | riders, online listings - an agent can collect the data |
| The number of leads produced will obviously increase | | | | they need to make sure they are running advertising |
| or decrease the cost per lead. So it is very important | | | | campaigns that will generate leads within their budget. |
| to really know how many leads are being produced by | | | | |