You know marketing is a key driver of success for your business in commercial real estate, but do you know how to measure it?
If you haven’t figured out how to quantify your marketing efforts, you are at a massive disadvantage.
Because just like any other functional area in business, the ability to make data-driven decisions allows you to quickly figure out:
- What works
- What doesn’t work
- How to make adjustments to grow your business
The same holds true for CRE marketing. Too many companies in the industry engage in marketing activities that are in vogue and follow the herd, but sadly, only a few understand the impact those activities have on their business.
Here are 4 steps you can use to create a framework to start better quantifying your marketing efforts:
1. Decide your key objective
Every marketing effort should be tied to a clear and measurable objective. This is step one.
For most CRE companies, the objective usually is associated with lead generated. Leads (or prospects) come in may shapes and forms.
Here are a few to consider:
- Sign-ups to your database
- Contact broker
- Schedule a showing
- Request offering memorandum
- Download offering memorandum
2. Track events
Once the objective is clear, the next step is to track these events. For tracking events online, there are specialized analytics platforms like Google Analytics that can help you measure specific website activity (clicks, downloads, sign ups, etc.).
If you don’t have a way to get this data, you will not be able to gain insights on your lead activity and other key metrics.
Data is critical in so many ways, especially true if you want to make sound marketing decisions.
3. Add a value to your key objective
How much is a lead worth to you? This is a question worth answering and helps set a basis for your marketing ROI and determining if your marketing activities are profitable.
Understanding your marketing costs is easy. Understanding how to compute your lead value is a bit trickier and can vary depending on the type of lead.
Here is a simple formula you can use to understand the value of a real estate lead:
Average commission x Conversion rate = Lead value
4. Measure key success metrics
Now you are ready to start measuring the success of your efforts. You can start with “big picture” metrics like total number of leads and total lead value generated.
At any point, you should be able to ask your marketing team to pull a marketing report and tell you how much $$ worth of leads were generated last month?
You can also drill into more granular metrics and activity. Here are a few worth considering:
- Conversion rate – how many visits do I need to generate 1 lead?
- Channel performance – what channels are bringing the most leads and which ones have the best conversion rates?
- Trend analysis – how do these metrics compare to last month? to same time last year?
- Cost of acquisition – what does it cost me (fixed and variable marketing spend) to generate 1 lead?
The ability to quantify your marketing efforts is critical if you want to grow and scale your business. In order to do this, use the above framework to define clear objectives, track events, add a numerical dollar value to each lead and start measuring your success.