Do you know where your marketing dollars went last year? Only about 20% of agents do. But, isn’t it important?
During November and December, I’m writing about business planning, to inspire you to get your business plan done for next year. Managers, see Management in a Minute for managers’ business planning tips.
Today, real estate agents capture much more of the gross commission dollar than ever before. At the same time, they must become real business people, because they must allocate some of these dollars to marketing—to increase their business. But, how do you know how to spend those marketing dollars?
Here are two basic principles of marketing dollar allocation
Principle One. Spend a proportional amount on your best source (s) of business—it will beget more business (your best source of business is from your past clients and people who know and trust you).
Most Agents are Not Spending Their Marketing Dollars Right
A recent study showed that agents spent the largest amount of their marketing dollars on direct mail, advertising, and the Internet. Yet, the majority of their business came from traditional ‘people to people’ sources
•IVR Technology (interactive voice response)–the only ‘technological’ lead generating source
Do you know how much you spent on your best source of business last year?
Only about one percent of the agents do. That means they aren’t treating that group of people as a ‘target market’. You must segregate your best source and allocate funds directly to marketing to them. You must make a marketing plan directly to these people, and attach a budget to this best source.
How much Money Should You Spend?
Principle Two. Spend between 5 and 10% of your projected income on marketing to your best source of business.
Example: If you were to project for next year that you will get 20 sales from your past clients, and that income would be $4000 per ‘revenue unit’ or $80,000, you would allocate $4000 to $8000 to marketing to that source.
Does Your Business Planning System Cover all the Bases?
Want to see more on business planning? Check out my online program Beyond the Basics of Business Planning. All the instructional webinars and documents are online, and very easy to complete and implement. This is a program created exclusively for real estate owners and managers. And, when you purchase the manager’s package, you also get access to all the agent’s planning videos and documents. Click here for more information.