How much to invest in marketing monthly?

Question

I'm curious how much on an average would you suggest a full time agent should invest in marketing? What kind of marketing: social media, local papers, networking meetings? Expectation is to make 100k. And what challenges can I expect along the way?

Thank you!

Irene Nash · Answer

Hi Aleksandra,

I can't tell you how much you should expect to spend to make $100K because there's so much variation in the rate of return of various marketing channels and a lot depends on your area, demographic, median market price, etc.

But one thing I would recommend is to look at some less traditional forms of advertising, i.e. Facebook, Instagram, and maybe Pinterest ads - consider using lead magnets that deliver educational value to get contact info, showcase your expertise, and build relationships with buyers and sellers who may not be ready to buy or sell right this moment. (As opposed to the traditional 'buy or sell with me now' stuff - not saying that doesn't work, just saying I think things are shifting.)

And don't spend a huge amount right off the bat on something unproven, or at least don't commit to a year-long expensive contract until you're pretty sure it will more than pay for itself in sales.  I recommend NOT spending a lot of money on a logo, fancy website or IDX on your website - consider saving money there and investing it in consistent marketing.  Anyone who knows you should be reached at least monthly with something that showcases your expertise and sets you up as a trusted guide. If you're doing things on a small budget that can even be a self-printed postcard mailing.

I think one of the main challenges most agents face is falling prey to paralysis by perfectionism. Excellence is a great goal, perfection is different and by definition impossible - I think by nature we tend to be perfectionists and most agents have a slew of great marketing ideas that have remained undone for the last ten years. My two cents. I know there are people on here who know more than I do about FB ads and messenger bots, etc., maybe they will chime in. Good luck!

Joel Owens · Answer

If you are a new agent you are likely on a 50/50 or 60/40 split. If you have been around a few years then likely on a 80/20 split, 90/10, or fee per transaction model.

You need to look in MLS for residential if that is what you focus on and see what is SELLING in your area. NOT what is being listed and expires all the time. Most buyers with data are saying they do not like that product in the market.

So you should start seeing a trend with sales. You might see 75% of the sales are occurring in certain neighborhoods and that the sweet spot is 250,000 house with 4 bed and 3 bath all brick with a 2 car garage sitting on a level lot of 1/2 an acre.

If 250k sale  at 3% = 7,500 commission

If you pay just 500 transaction fee then 7,000

100,000/ 7,000 = around 14 house sales in a year. That is before taxes and business expenses. Likely if you want to net 100,000 then 150,000 commission or 150,000/7,000 = almost 22 houses in a year.

With marketing most look at the breakeven rule. If the marketing brings you in what you spend then your brand is getting out there more without losing money. Now the caveat to that is if you only have a certain amount of  money to work with then you constantly test and track which medium is giving you the highest ROI on dollars spent. Any kind of campaign or strategy you usually have to give it at least 3 to 4 months or longer to see if it is working out. The strategy could be fine but the message is not good to get a great response. Look up Craig Proctors stuff. Some things might be out of date but the marketing section has some nuggets in there. People think different sectors and say they are in an industry etc. No matter the industry we are in the MARKETING and RELATIONSHIP business. Sure we have to know our choice of career well and specialize in it but the most successful people tend to excel in marketing and relationships.

I am spending about 50,000 this year in marketing with a company that does a whole plan for each year with milestones to achieve. What I do in commercial real estate is different. On a smaller deal I can make 50,000 on 1 transaction and pay for the marketing for the year.

Good luck.

Robert Wilson · Answer

The right answer is to test small and scale with success...Invest what you can to start... it might be 200 postcard stamps for cards to the 200 houses in a subdivision with owners that have lived 10+ years in a subdivsion with high turnover. It might be $100 for facebook ads.Whatever works... and generates commission income... take 10% of that new revenue and invest more into what works.Repeat.

Angela Russo · Answer

I definitely echo Irene's comments about strategies for running Facebook ads.

It's hard (and unwise) to give exact numbers on how much you should spend for Facebook ads, since it is so specific to your goals, but generally it is very affordable as a part of your business. Running Facebook ads gives you a great ability to test different ad copy, creatives, targeting etc to make sure you are being the most effective- without spending a ton or commiting a long time to testing. Then you can easily scale your best ad as you see fit to crush your sales goals.  Feel free to PM me if you'd like to discuss more specifics & strategies for your target clients.

Biggest challenge in marketing is similar to any other part of running a business- following up and being consistent with your leads. How you sell/close is where you will make the difference and see your ROI

How much to invest in marketing monthly?

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