17 August 2018
We all know what a money pit is. It’s something that we keep having to sink money into, yet gives us very little return. For example, an old car might be considered a money-pit if you constantly need to take it in for repairs and the thing still keeps breaking down!
The opposite of a money-pit is a good investment. That’s something you put money into that consistently pays off for you. In real estate terms, that payoff could be in the form of increased real estate leads, real estate referrals, or both.
When it comes to where you invest your real estate marketing dollars, you definitely want to invest rather than just sink your budget into a money pit.
Consider the following examples.
Say you’re spending money on online leads. You’re either signing up with an online lead-gen company, or you purchase online advertising. Would that real estate marketing strategy be a money pit or an investment?
Let’s take a look.
According to studies:
- Less than 1% of online leads result in a new client or listing for anyone.
- An average of 16 agents receive the same lead.
- You need to follow up on such leads quickly, usually within an hour, to have any chance of converting them.
- Often, you’re up against teams of sales associates who are highly skilled at working these types of leads.
As you can see, sinking money into online leads is mostly a money pit. It hits your credit card regularly, usually each month. The chances of you converting enough of these leads to make your time, and the dollars you spend, worthwhile are very low.
Now let’s look at another example.
Say you’re staying in touch with past clients using an effective client referrals real estate marketing system. That system includes an eye-catching real estate newsletter packed with valuable content, real estate email marketing, real estate social media marketing, and more. And best of all, it’s primarily an automated, done-for-you system.
According to studies:
- Past clients are in a position to recommend an agent two or three times a year.
- If you stay in touch regularly with them, you’ll get the majority of those real estate referrals.
- In sharp contrast with online leads, real estate referrals have the highest likelihood of converting for you.
Would you say focusing on client referrals is an investment or a money pit? Obviously, an investment. The more you stay in touch with past clients, the greater their loyalty to you builds, and the more real estate referrals you generate.
So when deciding how to spend your marketing budget, especially if that budget is limited, make sure it’s in an investment and not in a money-pit!