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Calculating Your ROI on Marketing Costs

Calculating Your ROI on Marketing Costs

 

If you’re in real estate, you know that you need to advertise. But knowing how much to spend and where to spend it can be very confusing. It’s easy to see that the big real estate offices and mega-agents have a large presence with print, media, internet and local advertising, but if your budget is more modest, the only way to determine the effectiveness of your marketing spend is through calculating your return-on-investment (ROI).

Think in Percentages

There is an old adage that says, “you have to spend money to make money.” If you spent $1000 for every home you sold, would that seem like an expensive cost? But what if every home you sold paid you $25,000 in commission? Then that $1000 results in a 25x return on investment. Not bad, right?

Quantify Results

Another great way to understand the ROI of your marketing is to quantify your results. For instance, if you spend $2000 on a mailing campaign, how many new leads did that bring you? Another example would be a pay-per-click internet ad campaign. How many click-throughs did it produces?

Spending money on advertising should not be a random effort, hoping it brings results. By understanding your specific goals for the marketing, you can determine if the ROI is worth the cost.

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