Studies have shown that marketing properties has a positive impact on the final sale price. However, knowing how much to spend and where to focus your budget is key to the amount of exposure and leads you will achieve.
Some of your home sellers may see much of your proposed real estate marketing plan and property advertising costs as an unnecessary expense, but you know that when promoting a property is done right, the money spent is nothing less than an investment, bringing in more interested parties, more competition between buyers and ideally pushing up the sale price.
There's a big difference between a marketing strategy done poorly and done well, and knowing how to create the perfect mix can help you move a property quickly.
As a general rule, it's advised that you spend at least one per cent of the value of a property on marketing.
How much should you spend on marketing?
Studies on homes put up for auction have shown that those that spend more on marketing get more inspections, so there is a definite correlation. This also translates for homes sold in a more traditional manner, with more inspections, a larger number of bids and a higher price tag.
As a general rule, it's advised that you spend at least one per cent of the value of a property on marketing. So, for houses with a market value of $500,000, that means property advertising budgets should be around $5,000.
Setting marketing goals
Before you start advertising, you need to have clearly defined goals so you can measure your success. The ultimate aim is to get a house sold, but you may have specific goals for how many people turn up at an auction, what the price ends up being or how quickly you can get the property off the market.
You should already have a guide for what to expect for different properties in different areas, and these should be used as a benchmark when you set any new clients marketing goals.
Part of achieving your goals is knowing who you’re marketing to. For example, letterbox drops are a great way of spreading the word, but they might not always reach the right people. Advertising online helps you target the right people, but that’s not to say that offline marketing doesn’t help.
At the end of your campaign you should be able to confidently say whether your marketing strategy worked, and how well it worked. The best way to do this is to measure your return on investment (ROI).
Understanding return on investment
The simplest way to measure the success of your marketing campaign is to look at your return on investment.
Simply put, this is how much extra money you make because of what you spend. For example, if the property is valued at $500,000 and your $5,000 marketing spend drives more interested parties, brings in more bidders and drives up the sale price to $550,000, you can say that your ROI was $45,000 and a 10% increase to the final sales price.
Essentially, you've spent $5,000 to earn an extra $50,000, or $45,000 profit.
While increasing your property marketing spend won't make the value of the house fall, you may hit a point when spending more doesn't mean you make any more money. The difference between spending $5k and $10k, or $40k and $50k, may not always be evident, which is where the 1% rule comes in handy.
Before going the whole hog with your marketing work, it can pay to do some preliminary work. By utilising your agency’s database of buyers, and your social media followers, you can reach out to people who may be interested in a specific property.
Start by placing the property on your own website and creating a brochure or ebook highlighting a property’s features and send it out to qualified buyers in your database. With this hook you can reel in some interested buyers for appointments, at a fraction of the cost of a full marketing campaign.
These same marketing materials can later be used in a full marketing campaign, and having a strong presence on social media sites can be a good way to distribute this to interested parties.
The shift to digital marketing
Traditional marketing methods are loved by real estate agents because they've been tried and tested over the decades, and it's clear what works and what doesn't. However, with the shift in recent years to mobile data consumption, looking at the property market, it's clear that there needs to be a shift to online marketing. Not only do people turn to online portals or mobile apps first, they often look on social media for inspiration.
Across all industries, the average company allocates 35% of its marketing allowance to its online marketing budgets. This is spread across a number of different sectors, including social media advertising, display ads, e-mail newsletters and search engine optimisation.
The more information we give sites like Facebook as individuals, the more targeted advertisers can become.
Social media marketing
The more information we give sites like Facebook as individuals, the more targeted advertisers can become. It's now possible to target people based on location, family size, income, home ownership, interests and pages liked. The more information you have on your audience, the better you can tailor your ads and the more intelligently you can use your digital marketing budget.
Another way to increase the effectiveness of your social media advertising is to install Facebook Pixel on your website. This allows you to track people who have been to your website recently, serving them specific ads when they go back to Facebook. Over time you can build your own pool of active buyers, that way you can bring these people back to your site as you list new properties and start to reduce your reliance on the portals alone.
When speaking to interested parties, ask them how they found out about the property (or include this question on forms on open days). This can show you which channels are most effective, helping you shape your future campaigns. If you're getting a great response on Facebook but not much from Instagram, it might be a sign that you should divert funding or that your ads need to be tweaked across different platforms. An attractive agent or real estate agency is one that has a large number of pre-qualified buyers ready to transact.
Who should pay?
One of the key debates in real estate circles is about vendor paid marketing. If you charge marketing costs to the seller, then you need to give them good reason to fund a decent campaign. The most compelling way to do this is with successful examples -- not just from the industry in general, but specifically from your previous work.
If you are going to foot the bill in the hope that it will increase its commission at the end of the day, it’s important that you fully fund the campaign and don’t try to skimp or cut corners. The better the advertising, the better the end result and the more sort out you’ll be by other home sellers.
Done properly, marketing can be hugely effective which is good news for you and your client. Keeping track of your campaigns -- the good and the bad -- is vital for future success, and it's one of the main reasons we've included so many advertising features in our software.
With CAMPAIGNxpress you can not only create marketing material, but make use of our automation tools, meaning you can save time on some of the more repetitive or time-sensitive tasks, meaning you can get more done and carry out a more intensive property marketing strategy.