Marketing Allocation - How Much of Net Income

[Kyle Cabral]

Hi BP community,

I have a general question.  For those who are planning out their marketing attack for 2016 right now, how much of your net worth do you allocate for marketing for any given year, month, quarter, whatever.  I'm curious to hear other's systems for marketing plans.

I'm playing around with the idea of having a variable system based on quarter.

I.E. Let's say company net assets in bank is $40,000.00 creating a system quarterly that will utilize 20% of that towards marketing.

So 

January, February, March - $8,000.00 total between Direct Mail campaigns and other forms of marketing.  If no deals get closed, then it turns into 20% of $32,000.00 for April, May, June, and fluctuates based on closings that happen in the quarters, etc.

Curious to hear others thoughts.

Kyle

[Matt Lefebvre]

From a real estate agent's perspective, I've found that every piece of marketing should have a 10x ROI. So if you spend a thousand dollars a month on direct mail, you should be receiving at least $10,000 worth of business per month back from that campaign. If you're not receiving that, then you need to make tweaks to your market or you need to think about using a different strategy. With that being said, don't immediately make changes if you don't see results immediately... however if the ROI is consistently low, then you should be figuring out a way to improve the marketing.