Welcome to part two of our series on mistakes to avoid when building your real estate team. If you missed the first big mistake, check it out here to learn about the importance of keeping your lenders accountable. The second big mistake that real estate team leaders are making is not properly tracking their real estate ROI. Real estate ROI is similar to any marketing ROI, with a few distinct features. ROI stands for Return On Investment…
Real Estate ROI Definition: Frustratingly complicated way to see how much I am getting from the marketing dollars I am spending that I really don’t have time to figure out or track.
Well, not exactly, but it can sure seem that way! Finding ways to be smarter about tracking your real estate ROI will ensure that your time and money are being put into investments that are actually working for you. The higher the ROI for any given marketing source, the more focus you should put on that source. As obvious as this may seem, the statistics on how many agents are not doing this are staggering. Read on to see how to become a marketing leader in your industry by making only a few minor changes to your strategy.
1. Don’t Throw Money Away
All real estate agents use some sort of marketing. The question is, which of your marketing sources are actually working for you? Which are empty cash traps? Not tracking your real estate ROI on a consistent basis is like buying stocks and not really keeping track of how they perform. Even checking in once a month will only give you a small glimpse at how your portfolio is performing; you need to check in much more frequently to get the whole picture. The two biggest “reasons” (read: “excuses”… that’s right, we’re calling you out!) that we hear for not tracking ROI are 1) not having enough time and 2) not having enough knowledge about how to do so accurately. Your real estate CRM should be able to help you out in both of these areas, making the calculation of your ROI for each source quick and easy. Once you have this system in place, you can then use this information to leverage your investments to increase their return. Making sure your CRM is calculating your real estate ROI automatically will take you from ROI rookie to wizard in a matter of a few simple steps.
2. Make Data Driven Decisions
To make it to the top, you should be using data to inform most if not all of the decisions you make as you build your real estate team. Calculating your real estate ROI should be no different. Using the data that your real estate ROI tracker provides you with will help you make decisions as to what marketing sources are working for you, and which ones it is maybe time to part ways with. One important piece of data that you should be mindful of is how many leads each marketing source is generating for you. And of these leads, how many end up being converted? Observing these trends will help you to make decisions for your marketing game plan. Your CRM should pay for itself many times over with this feature alone.
3. Don’t Over-Complicate Things
To most effectively reach your audience, you should be able to view your current real estate ROI at all times. Google “how to calculate marketing ROI” and you will receive a whole host of strategies that quite frankly are far more complicated and time consuming than they need to be. Use a method of tracking your ROI that provides you with visual representations of the analytics of your ROI, as well as one that updates automatically. It is important that the method that you use is simple and easy to interpret, or chances are you just won’t use it. Calculating ROI can be as complicated or as simple as your make it. The difference is in the tools that you are using. So consider relying more heavily on your CRM to do the job for you. Or, get out a pencil and paper and start calculating away. Whatever makes you happy, but consider at least giving a CRM a try. You might be surprised at how useful it really is to always have your real estate ROI at a glance.