If the ads you run don't earn you more than you spend, you shouldn't run these ads.
Sounds logical, doesn't it? But in the day-to-day operation of their businesses, the truth is that many agents have no idea how much their ads really cost.
They know how much they invested to run their ads online, in the newspaper or on a postcard – in other words, they know the media cost – but they have no idea how much profit the ad returned to them (i.e. the ROI or Return on Investment) or whether it even paid back the money they invested at all.
The mistake many agents make is in looking at their advertising dollars as a fixed expense of their business, like rent or salaries
, and they hope with a blind faith that this investment is furthering their business.
When I put it this way, I'm sure you can see the error of this way of operating, but, as is so often the case in life, knowing and doing are two different things.
Blind faith (or blind resignation) is NOT an acceptable way of running your business. Instead, you should think of each ad as if it were one of your salespeople or employees. If this person never earned you a dollar, or if you had no way of knowing whether they were making you any money, what would you do? Well, you'd fire them and find someone to replace them.
It's the same with your advertising. Your ad is just like one of your salespeople. However, your ad can be a lot more, because it's like a thousand salespeople. Ten thousand sales people. This salesperson in print is your "Exponential Salesperson". One little ad, if well-conceived and executed, is like having thousands of salespeople going out into your prospects' homes telling your story.
Clearly you want to make sure that these thousands of salespeople are telling your prospects the most compelling story they can, one that will motivate prospects more than any other. Without testing, you have no way of knowing what this story should be. The only way you can test and measure your marketing efforts is if every piece you run has a direct response component to it (i.e. a trackable 800# or unique domain name.)
It is very important that you have a way to statistically measure the response to every one of your ads. Your 800# service or website provider should be able to give you automatic and accurate test results of your ads in real time. You should be monitoring these tracking reports every day. Consistent analysis will allow you to know immediately what worked best and what didn't work as well (or at all). Knowledge is power, and this kind of knowledge gives you the ability to adjust your future marketing programs. Here’s an important point: it is, in effect, your prospects who are directly giving you this feedback because they are the ones who are either responding to or not responding to your ads.
You should test not just which
ads to run, but also where, which days, time of day, positioning, frequency, headline, offer, target market,
etc. In addition, you have to look at a number of factors together in order to get a full and accurate picture: media cost, # of responses and quality of responses (i.e. how many of the prospects from this ad actually converted into paying clients.)
For example, take a look at the three different scenarios in Figure 1. Here are a few observations:
- Your cheapest ad turned out to be your most expensive ad. Because Ads 2 and 3 made you money, they actually didn’t cost you anything.
- At first glance, you might conclude that you should run more of Ad 3 because it made you the most money. However, if Ad 2 consistently returned you the same result, spending $2,000 on ten Ad 2's would actually be a better use of your advertising dollars since you'd make 12.5X your money ($200 x 12.5 = $25,000) vs. 2.5X your money ($2,000 x 2.5 = $5,000) for Ad 3.
You don't need to become a financial wizard to do this kind of analysis. It's really very straightforward. What’s most important is that you're aware of the implications of what you're doing so you can make informed and financially profitable decisions about the ads you run.
invented his real estate success system during his own, highly successful 22 year Real Estate career right here in Canada. While an active agent (not a broker), Craig consistently sold over 500 homes a year for annual GCI of almost $4 Million. In fact, for 6 years straight, no one listed or sold more homes in the Greater Toronto Area than Craig Proctor (Source: TREB Statistics
). Experience matters! Craig successfully battled in the trenches just like you. He understands the challenges that real estate agents face and he believes because he better understands you that he can better help you. Known within the industry as Real Estate’s Millionaire-Agent-Maker, Craig has created more Millionaire Agents than any other real estate coach or trainer in the world. To request a free business consultation that will show you how Craig’s system can transform your real estate business into a highly lucrative enterprise that will earn you millions without high lifestyle costs, visit: www.NeverColdCallAgainSystem.com. To learn about Free Half Day Craig Proctor Discovery Days in your area, visit www.CanadianSummit.com