During 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.
Are you a newer agent: You need a solid business planning template–a start-up plan. See it at Up and Running in Real Estate.
Watch my Complimentary Business Planning Webinar
During this fast-paced webinar you’ll see:
- Why your plan probably didn’t work for you—and what to do about it
- How to definitely find out what will work for YOU (not someone else’s plan!)
- How to anticipate market shifts (!)
- What to STOP doing in 2017
- What one thing will assure your business plan works
- Bonus: 10 Creative Marketing Ideas for your plan
- The strategic planning process created exclusively for real estate professionals by Carla Cross
- Review: Your best sources of business
Click here to see the webinar and grab the handouts.
Here’s to a great 2017 with your polished business plan!
Need a comprehensive business planning system that is designed specifically for seasoned agents? Most planning systems don’t cover the specific areas you need to address.
Check out Beyond the Basics of Business Planning.