Managing expenses is a crucial part of your job as a real estate entrepreneur. While it may not be your area of expertise, having a clear understanding of how to spend and manage marketing budgets can make a big difference in the success of your campaigns and the overall health of your business. This is especially true in the real estate industry, where high-ticket sales can provide a good return on investment for marketing expenses.
By strategically managing your marketing expenses, you can avoid potential pitfalls and ensure that your campaigns are practical and successful. It’s important to take the time to understand how to manage your realtor marketing expenses to achieve the best results.
What real estate marketing expenses include
Real estate marketing expenses can be extensive and cover various activities. Traditionally, these expenses may include employee salaries, printing and production of marketing materials, television and print advertisements, branding efforts, and travel.
However, in today’s digital world, real estate marketing expenses also include costs associated with online marketing strategies, such as search engine optimization (SEO), website development and management, social media marketing, and paid search advertisements on platforms like Google. Other potential marketing expenses for real estate businesses may include influencer marketing, brand collaborations, and hosting events.
Using various marketing tactics helps real estate professionals and businesses improve their reputations and reach more potential clients. However, it’s important to carefully plan and manage marketing expenses to avoid overspending and ensure that your campaigns are effective and successful.
Types of real estate marketing expenses
When managing marketing expenses for a real estate business, it’s important to understand the different types of costs you may incur. This can help you plan your marketing budget and allocate funds in a way that is effective and efficient.
One type of real estate marketing expense is known as establishment expenses. These are essential costs for setting up a business and its marketing efforts. They may include investments in marketing and sales systems, branding, and customer acquisition and management tools.
These expenses are typically considered one-time or infrequent and may only need to be updated every few years.
Examples of establishment expenses for a real estate business may include:
- Real estate website development and design
- Branding and logo design
- Marketing and sales software
- Customer relationship management (CRM) system
- Marketing and advertising materials, such as business cards and brochures
Content creation and production expenses
Content creation is costly for many marketing departments in today’s digital landscape. To produce engaging and effective marketing materials, you may spend money on creating a variety of content for your real estate business, including:
- Vlogs and product videos
- Designs, infographics, property brochures, and flyers
- Blogs, how-to guides, market updates, and news articles
- Landing pages for ad campaigns
- Drone and 3D virtual videos of properties
These materials can help attract and engage potential clients, showcase your listings and service, and build your real estate brand. Investing in content creation can create valuable assets you can use in various real estate marketing campaigns and channels.
Advertisement expenses are an ongoing cost to promote your listings and services and drive better returns on investment. These expenses may include the following:
- TV, radio, and in-print advertisements
- Google and other search engine ads
- Social media advertisement expenses
- SEO expenses
- Social media accounts and website management
- Local media and new website advertisements
By carefully managing your marketing expenses and implementing effective advertising campaigns, you can increase your visibility and reach more potential customers.
Best practices for managing realtor marketing expenses
As a real estate professional, a marketing plan is essential for the long-term sustainability of your business. However, marketing comes with expenses, and it’s important to have a strong strategy for managing these costs. This means knowing how much marketing you need, how much you will spend, and where the money is going. A strategic approach ensures that your marketing budget is used effectively and beneficially for your business.
To develop a strong marketing strategy, consider the following steps:
Identify your target audience and understand their needs and preferences
To create an effective marketing strategy and budget, deeply understanding your target audience and their needs and preferences is essential. We call this your ideal client profile “ICP,” also known as a client persona. This is a fictional representation of your ideal customer based on accurate data and research. It can help you better understand your target audience and tailor your marketing efforts to their specific characteristics and needs.
To create your ICP, you can research and gather data on customer demographics, such as age, language, location, income, interests, stages of life, and marital status. Most importantly, you want a clear understanding of their pains, fears, dreams, and desires. You can use our PFDD framework to do this.
This information can help you create a detailed and accurate picture of your ideal customer, guiding your marketing efforts and ensuring that they are relevant and practical.
Determine which marketing channels and tactics you will use to reach your audience
Once you’ve identified your target audience, you’ll want to research and compare different marketing channels and tactics to determine the most effective for reaching them. We recommend you leverage a mix of paid and organic tactics for the best results. You can check this article out for our favorite tactics and the advantages and disadvantages of each.
Establish clear, quantifiable marketing goals
Having a clear, specific marketing goal can significantly improve the chances of success for your marketing endeavors. Research shows that businesses that proactively plan their marketing efforts with definitive goals are three times more likely to achieve them.
By establishing a marketing goal and basing all of your decisions on it, you can better allocate the necessary financial resources and manage them effectively. This will also help you focus on using your resources optimally to achieve your desired outcome.
When setting marketing goals, it’s important to ensure they are specific, measurable, attainable, relevant, and time-bound (SMART). This means that your goals should:
- Be specific and clearly state what you want to achieve, such as “Increase the organic traffic to our website by 10% every week.”
- Be measurable and quantifiable to track progress and determine whether you are achieving your goals. For example, “Increase the organic traffic by 10% from the previous month.”
- Be attainable and realistic based on your resources, capabilities, and past performance. For example, “Based on our previous experience and the trend of our organic traffic, we believe we can increase it by 10+% by publishing 4-7 blogs a week instead of our current 2-3 blogs per week.”
- Be relevant and aligned with your business objectives and strategy. For example, “The increased organic traffic will help us improve the number of quality leads, brand awareness, and sales.”
- Be time-bound and have a specific deadline for achieving the goal. For example, “By the end of this month, we will grow our website’s weekly organic traffic by 10%.”
Here is an example SMART goal based on the information above:
“By the end of this month, we’ll improve our website’s organic traffic by 10% every week by publishing 4-7 blogs a week instead of the current 2-3 blogs per week.”
A SMART goal allows you to focus all your decisions and actions on the desired outcome you’ve established.
Create a marketing budget
A well-defined marketing budget is essential for managing your marketing expenses and ensuring that you have sufficient funds to market your services and products effectively.
Creating a marketing budget is a time-intensive process that requires careful planning and consideration of all aspects of your marketing efforts. A clear marketing goal and a supporting strategy will help you create a budget that covers all the necessary elements.
Before you start formulating your budget, it’s essential to conduct thorough market research to gather insights and create a realistic budget based on data and market trends. Before you begin, make sure you understand the following factors that can impact your marketing budget:
The current trend in the real estate industry
To stay up-to-date with the latest trends in the real estate industry, you can take the following actions:
- Keep yourself informed by regularly reading industry news and reports.
- Follow industry influencers and influential publications to stay informed about the latest trends and developments.
- Use tools and systems, such as market research and analysis, to gain insights into industry trends.
- Create a network of industry-leading professionals to exchange ideas, share knowledge, and learn from each other.
- Listen to feedback from your customers to understand their needs and preferences and how they are evolving.
- Be open to change and actively embrace new ideas and approaches as the real estate industry constantly evolves and adapts to new developments.
Observing and learning from your competitors can be a valuable way to understand the current trends in the real estate industry. While it may be difficult to track the behavior of millions of customers, it is often easier to track and analyze a few key competitors. To do this, you can take the following actions:
- Regularly visit your competitors’ websites to see what they are offering and how they are positioning themselves in the market.
- Read customer reviews of your competitors on Google and other review platforms to gain insights into their strengths and weaknesses.
- Follow your competitors’ social media handles to see how they engage with their customers and promote their services.
- Keep track of your competitors’ promotional efforts, such as discounts, offers, and marketing campaigns, to see what they are doing to attract customers.
- Analyze your competitors’ blog posting strategy to see what topics they are covering, how often they post, and how they engage with their audience.
The cost of each campaign type
A marketing budget is not a set of rigid rules you must always follow. Instead, it provides information and guidance on allocating your financial resources effectively to achieve your marketing goals.
To create a realistic marketing budget, it’s crucial to thoroughly understand how much money you need to spend on different marketing campaigns. Here’s how you can do this:
- Research the real estate industry with experts and consult with marketing agencies to gather insights and quotes on the costs of different marketing channels and tactics.
- Collect and analyze real estate reports and follow real estate publications to stay up-to-date with industry trends and best practices.
- Keep yourself updated with the latest trends and developments in real estate marketing to ensure you’re basing your budget on current information.
With this information, you can determine how much money you need to spend each week, month, and quarter to achieve your marketing goals. Then, you can plan your budget based on your marketing goal and strategy and your resource allocation plan.
Update your budget to understand your spending
Creating a detailed and realistic annual marketing budget can be challenging, and it’s equally important to keep it updated. An updated budget will help you understand your marketing spending for the past week or month and how it compares to your original plan.
Your budget is a reference point for how much you will spend on marketing in the coming weeks and months. Regularly updating it can provide valuable insights into your marketing efforts. By analyzing your expenses, you can determine whether you are allocating your funds effectively and make adjustments as needed.
Reviewing and updating your budget on a weekly or monthly basis will give you the best understanding of your marketing performance. You can compare your expenses against your lead generation and conversion rates and allocate resources to the platforms that are delivering the best results to maximize your return on investment.
Analyze marketing campaigns and change accordingly
Not every marketing campaign will achieve the desired results, and you may have different goals for different campaigns. For example, you may run one campaign to increase website traffic and another to generate leads.
Because you can also run campaigns on different platforms, such as social media and YouTube, it can take time to determine which campaigns are most effective. You can identify which campaigns deliver the best results by analyzing your data and results and allocating your budget accordingly.
Data generated from your ads can also help you make informed decisions about your ad spending. By understanding what causes conversion clicks and the timestamps of these clicks, you can optimize your ad schedule to maximize the value of the money you spend on ads.
Find the right mix for marketing expenses, and keep revising it
As a real estate agent, it may be intimidating to spend considerable amounts of money on marketing in the beginning. If you are an established realtor, you may have solid insights and an understanding of the industry and thus understand how much you need to spend on marketing.
A flexible spending strategy is beneficial for your business. The preferences and choices of customers change every other day, so you must be able to adapt.
Consider how much you will expense on the following:
- Social media
- Video production
- Search advertisement
- Organizing events and expos
- Physical prints and collateral
You should test each of these for a while to determine their ideal expenses. With the data you’ve collected at the end of the testing phase, you can understand which platform performs the best based on your goals. You will then be able to allocate financial resources for the best value.
Depending on the trend and industry situations, you may also change your marketing spending from time to time. Start with a limited budget and then scale it as you see fit.
The bottom line
Marketing is integral to your growth as a real estate agent, and effectively managing your marketing expenses will ensure you achieve the best ROI. You can set yourself up for success by setting clear, quantifiable goals, creating a solid marketing strategy to capture your target audience’s attention, staying up to date with industry trends, and constantly testing, learning, and refining your campaigns.