Like other real estate leaders, I’m sure you’re on the hunt for ways to streamline your 2019 marketing budget. You know the importance of balancing costs and choosing rock-solid services for your brokerage, especially with a changing market and so many industry-disruptors upping the recruiting competition.
Before the changing market distracts you from your budget-building, fear not. Real estate economists aren’t fearing another bubble any time soon, but rather predicting a ‘leveling off’ in the market. David Dworkin, a former Treasury Department and Fannie Mae official who is now president of the National Housing Conference, says “I think we’re seeing a return to a more normal market.”
This leveling off may manifest as less-experienced agents seeing fewer closings, especially with the high saturation of real estate agents. In 2015, the National Association of Realtors reported 1.16 million licensed agents. Just two years later, that grew to nearly 1.31 million. This is a similar trend to NAR memberships back between 2005 to 2007, when the industry was also too agent-saturated for the number of transactions the U.S. was making. Experienced agents should weather the market change as long as they’re spending the time to build their pipeline. As the housing market normalizes, the recruiting market is getting more cutthroat—which means your brokerage’s marketing and technology agent services matter more than ever. Agents are searching for a brokerage that provides them with the most value, from splits to office space to services. Every piece of your agent offering is important!
As you review your budget for the coming year, this is the mantra to hold close for the coming year: Don’t make decisions (or make no decisions) based on fear. Determine your biggest weaknesses and opportunities, evaluate your options, then go all in. Whether you’ve finalized the budget numbers or are still making last-minute tweaks, you can use these five important questions to evaluate your options before going into 2019:
- What are your agents really using?
- What are your agents asking for, and why?
- What are your marketing staff’s pain points?
- Can you track ROI for your marketing budget?
- Are you still spending a large percentage of your budget on print media?
Consideration #1: What are your agents really using?
For each item on the budget, an investment is made with the anticipation that it will create positive, trackable return for the brokerage. However, sometimes we mistake perceived return for actual return.
Let’s look at an example.
Ted is the manager of a franchised real estate office. In 2018, Ted purchased a service for his agents that would post content to their Facebook page on their behalf. We would assume that every agent would take this opportunity. There is a perceived value that all agents find Facebook posts valuable, therefore the investment would be beneficial.
However, it’s now time for Ted to look ahead to 2019. He received the usage report from the vendor, and only 7 of his 100 agents have opted into the service. He hears from his team, “it’s a nice tool, just not for me.” Ted was right to consult his agents’ usage of the tool – not just the perceived value – and can make a choice to cut that service or look for a product that is easier for his agents to use.
We’ve talked before about the importance of listening to your agents. It’s not just about what we as leadership think is a “good tool” but what do our agents use and find true value in.
Consideration #2: What are your agents asking for, and why are they asking?
Agents in the field are just as qualified as leaders, and many are just as eager, to learn about new strategies that can benefit their company. But, remember to always look for the true pain point the agent is trying to solve.
Here’s another anecdote.
Margaret is a top producer for a boutique independent brokerage outside of a big metropolitan area. She approached her broker with a new CRM that has a lot of bells and whistles – but also a hefty price tag. Margaret insists the agents need this particular CRM.
Margaret’s broker has a detailed conversation with Margaret to find out what the actual pain point is. It isn’t that Margaret needs this particular CRM, but rather she just needs a CRM that allows for custom fields so that she can organize it the way she feels is best. Margaret’s broker can now find a CRM tool for her entire brokerage that fits the budget and solves this pain point for Margaret.
Consideration #3: What are your marketing staff’s pain points?
Your biggest advocates are right beside you – don’t forget to think of them when setting your 2019 budget. If you’re a brokerage with enough resources to have an administrative staff, do not underestimate the power they have to help your company succeed. Just as you should listen to your agents, you need to listen to your administrators. What are their concerns or wants – and ultimately what is the pain point they need healed?
Your budget may need to accommodate a new staff member or a new automation service to help alleviate fatigue among your staff. If you’ve been growing your company, you need to make sure your staff feel comfortable with increased workload. These are the faces your agents interact with daily, and they set the attitude for the workplace.
Do you know a Jeff at your brokerage?
Jeff works as a desktop publisher for a local agency. His job is to build the flyers and marketing pieces for each new listing. While he has templates and a great knowledge of his publishing software – he’s having trouble keeping up now that the company brought on 20 new agents this year. Jeff wishes there were more hours in the day or someone to help him.
Jeff’s broker can consider a new salaried employee in the 2019 budget – or, perhaps there’s an automated service that could eliminate some of Jeff’s repetitive tasks.
(HINT: It starts with an I and ends with a V… – sorry, couldn’t resist.)
Consideration #4: Can you track ROI for your marketing budget?
This is the most important consideration. It can’t be stressed enough.
Are you tracking any data of your marketing and technology investments? Measuring emails opened, page bounces, or social media engagement? If not, this is the time to start. I mean, truthfully, the time to start was a few years ago – but better late than never. Having the data to support your decisions will ultimately lead to less stress in the budget-setting process the following year.
Start simple. With each line item on your marketing budget identify the one factor you want to use to measure its actual value (not perceived value). Start tracking the easy stuff first just to get into the practice.
Examples of line items to start tracking.
- For your yard signs, how many are in yards versus hiding in the back of an agent’s SUV? Consider using an inventory method to track usage and turnover (so that you only purchase more when they’ve been beaten enough and need to be replaced).
- Are you paying for a mobile app separate from your mobile brokerage website? Look at your app data and decide if the number of app downloads is a significant value for the cost. If your app gives you conversion data (number of users that made an inquiry on a home via your app), even better!
Start using hard data to drive your budget decisions. If the data supports your goal, then the spend is good. If your goal was to increase brand awareness, you chose to spend $2,000 on Facebook boosts, and you increased your page following by 30% – then data would support your investment.
Consideration #5: Are you still spending a large percentage of your budget on less-effective channels like print media?
There are three sides to the print argument:
- Print is dead. My brokerage spends no money for the agents on print marketing.
- Print is alive. Brokerage spend is for specific targeted campaigns only.
- I have agents that like the newspaper, so I keep spending a portion of my budget on smudgy black and white 1-inch blocks.
Don’t forget – every brokerage is different. Newspapers and magazines on a local level may still be very important media options for building brand awareness. However, on a larger scale, it is no longer an effective medium for sharing listing information and building an agent’s pipeline. Don’t fall into the “we’ve always done it this way” mindset: Reallocate those budget dollars to services or tools that have actual value, not perceived value to your agent community.
These five considerations for a well-planned marketing budget are going to save you frustration and stress as we count down to the new year. Listen to your agents and your staff, identify their pain points that need solutions, decide what trends are best for your local market, and use data to support your decisions rather than perceptions. If the data doesn’t support your goal, then you know where to begin cutting costs or reallocating dollars to the successful strategies. Revisit Ted’s story from the first consideration about looking at usage over perceived value.
Are there additional motives and factors that drive your budget-setting process that we didn’t outline above? Keep the discussion going below in the comments or on social media. We always love to hear from leaders like you.
June Laves, Marketing Manager at Imprev, Inc
Before joining the creative minds at Imprev, June worked as the marketing specialist for a top performing independent brokerage helping over 200 agents grow their business.