Marketing costs of real estate agents – what is enough?

If you asked any leading agent how they have achieved their business success, I can assure you the answer would be ‘with a lot of hard work.’

If you pried a little deeper you would also hear about how they spend considerable time, energy and money building their personal brand both on and offline. It is the cumulative impact of their personal marketing and the sales results they drive for their clients, that fuels their reputation and ongoing success.

To put it bluntly, all the top agents I know right across the industry have a solid personal marketing budget, and without this, their career success would not have been as strong.

We know that homeowners only invite 1-2 agents in for an appraisal. Why? Because they have pretty much decided who they are going to use to sell their property. They have selected their agent/s of choice as a result of how strong the agent’s personal brand is.

As many of you would know, the top agents with a strong personal brand are those agents who aren’t just focused on the quick wins or people who are looking at selling immediately. They have a long-term game plan that ensures they have prospects and clients at all stages of the sales funnel.

But what should a real estate agent’s marketing and advertising plan include?

Awareness building to establish and reinforce the agent’s personal real estate brand. If you work within a franchise or part of an established brand is still important you have a strong individual brand. People more often than not choose an agent to sell their property, not a brand so ensuring you have strong individual brand awareness and are considered as a thought leader in the local area is important for your reputation and success.

Create a strong digital footprint for engagement and lead identification – nearly every potential seller searches online before inviting an agent in for an appraisal. Homeowners use this as an easy way to compare agents. So, making sure you can be found online and ensuring what is found represents you in the right way, is critical to your success.

To build a strong presence online you need a constant flow digital content from; video, audio, written, images/infographics and perhaps soon you’ll need to add virtual reality into the mix. Having a consistent flow of different types of content will help ensure you:

• Are found on search engines when people are looking for an agent in your area
• Have fresh content you can add to your social media channels
• Leverage social media advertising targeting local homeowners and investors
• Have content you can share with your database in a newsletter
• Are able to drive traffic back to your website or your agent page
• Are positioned as a thought leader and a trusted source of local real estate information
• Able to compete with your competitors so they don’t dominate any online channel
• Stand out from other real estate agents and real estate business
• Generate inbound leads so you can nurture these relationships over the longer term

Nurture programs – only about 3% of homeowners are looking at selling at any given time, which really isn’t a lot! So, ensuring your marketing program is designed not only to capture hot leads, but also to engage and nurture prospects is critically important to your long-term success. The best agents do a great job here. If you do this well it is a key way to differentiate yourself in a competitive market.

But how much do you need to spend to create an impact in your local market, what are the costs involved?

Let’s have a look at what you can get.:

Less than $2000 per year

You won’t get much for this spend unless you are happy to do a lot of the work yourself.

• You can build your own website using a real estate themed template on WordPress or Squarespace or similar
• Set yourself up on Social Media and post on your timeline (you won’t be able to boost or advertise any posts)
• Hire a professional copywriter to write your agent bio
• Professional photographer to take your profile shots
• Subscription to a client review website such as ratemyagent or Realsatisfied

$5000 – $8000 marketing budget

This still isn’t a lot of money but it’s a little bit better.

In addition to the promotional elements above you could also afford:

• • A professionally shot agent bio video for social media and your website

Hire a freelance digital marketer to set your social media accounts up eg Facebook & Instagram

Subscribe to a digital content / social media training program. Each social media channel is slightly different so knowing how to use them and post relevant content is important

With this budget you will still need to manage all your social posting, blog writing and image building yourself.

$10,000 marketing budget

This may sound like a lot of more, but it is still at the lower end. A budget this size would enable you to:

• Have a professional website designer build a customised agent website that is optimised for mobile and search engines
• Commence a paid advertising campaign. Whilst you may think your website looks amazing, very few people will find it unless you start to promote it. With this budget you would have some money for Google Adwords and some money for Facebook and Instagram advertisement….not a lot but some.
• Using Canva, a free graphic design platform, you could create drop cards and flyers and have a small run printed for you to distribute to your neighbourhood.
• The good news is once the website is set up, apart from annual hosting fees and the maintenance as required, you can shift your budget over to advertising your services and promoting you and your reputation.

$20,000 – $25,000 marketing budget

This is a healthy budget for agents to build their personal brand and to be able to effectively nurture them. At this budget you can start to implement a strong local content marketing strategy and build up a local presence.
In addition to the elements in the $10,000 spend you could:

• Subscribe to a real estate content marketing package and receive:
  • A monthly blog written on your behalf
  • 3-4 social media advertisements
  • Content promotion plan for you to implement
• Spend more on your paid social media advertising campaign
• Subscribe to an email distribution service such as Mailchimp, have an email template designed and send emails to your database each month
• Use a graphic designer to create flyers and drop cards that can be distributed through the neighbourhood
  Even with this marketing budget, you will still be responsible for managing the uploading of your content onto your website and managing your social media channels.

$45,000 – $50,000 marketing budget

If you are looking for an expert to create a bespoke inbound marketing program this is a good budget to start with. This would allow a professional team to create:

• Local lead magnet to promote across all digital channels to identify prospects
• Customised email and social nurture program
• 1 -2 monthly blog articles
• Mix of social advertisements to drive awareness, engagement and conversion
• Budget for social advertisements
• Google AdWords budget

Whilst this may seem a lot of money, the results of implementing an inbound marketing program that is personalised to you and your neighbourhood is a powerful way to differentiate yourself from your local competitors and drive leads into your funnel.

$70,000 – $80,000 marketing budget

With this budget you can create a multi-faceted inbound marketing program and hand it over to professionals to manage it all for you. Having access to a team of experts can help supercharge your marketing and will give you access to:

• Professional blog writers to create regular articles for you, your website and emails
• Videographer to record and edit a vlog
• Inbound marketing professionals who can create a bespoke program for you including data capture and lead nurture
• Monthly newsletter creation and management to nurture leads
• Social media expert to manage the promotion across the different channels
• Google AdWords Manager to manage and optimise your search campaigns
• Strong digital advertising budget to ensure your campaigns reach the right people and make an impact.
• Continual optimisation of your campaigns

Obviously, this is a bigger budget and not an option for everyone, but we have included it here to show you what the full range of marketing options includes and what many of the elite agents across Australia are spending.

Putting the cost of advertising into perspective

Whilst these costs may look a bit scary when you see them as a lump sum on your screen, it’s worth considering the potential ROI of your marketing expenditure.

If you successfully sold only three property’s in a year as a result of your marketing and if we took the average Sydney price of $900,000 as a benchmark, this is how your ROI would look against the different marketing budgets we have detailed above:Average sale price = $900,000

Average agents fees / commission rates = 2.2%

Average agents fees / commission rates = $19,800 x 3 = $59,400

ROI on a $2,000 budget = 2970%

ROI on a $5000 budget = 1188%

ROI on a $20,000 budget = 297%

ROI on a $45,000 budget = 132%

ROI on a $80,000 budget – 74% – If you were spending this amount on marketing you would expect to generate considerably more than 3 sales so whilst this ROI is lower it isn’t really relevant.

A final word on the costs of marketing

As you know when you’re selling a house, it is critically important to the success of the campaign that there is a strong real estate advertising program to support the sale, preferably with a mix of print and digital media. It is simply a cost of selling a property, it’s not negotiable.

The same rule applies to you as an agent, unless you spend some money on the promotion of you as a brand, you will not be found by your community of sellers or investors, you won’t have a voice online and quite simply you won’t be on the shortlist of agents to be invited in for a property or rental appraisal.

If you want to be a high performing real estate agent, earning gross income above $500,000 a year, you will need to invest in your own marketing strategy.

Whilst some of these higher budgets may be more than you are expecting to pay, or are able to pay at the moment, starting small and building your digital footprint is achievable.

At Localiz we have a range of packages available to help agents and agencies build a local reputation and drive leads into their business. To connect with our team click here.