ROI Marketing Real Estate

When talking marketing there is one acronym that is the most misunderstood acronym in the book and that is ROI or for those who do not know that one “Return On Investment”. Too often when people talk about marketing they talk about the costs and mention things like that is too expensive. If you are looking at marketing this way it is time to listen up and listen well. Why when spending money on bringing in customers would it ever be “too expensive” unless in fact it was not working?

This is where keeping detailed records of everything comes into place. Some of the records you would want to keep is the cost, the number of leads, the number of conversions, the conversion rate, and then the average earnings per new gained client. The best way to keep all these is by using an advanced CRM system or to work with a marketing company that tracks these records and gives you on demand reports. You should be checking these reports on the regular and if you have a team each member should be tracked individually to ensure you are not wasting money, time, or leads on someone who is not producing.

Marketing Return On Investment

If you think like this, I spend $500 a month on leads which buys me 10 new leads which converts to one new customer that spends on average $300,000 on a home then the commission equals $7500 then this example has a 15x return on investment. Now that you know that you should continue to ramp this marketing up as fast as possible and sustainable all while watching your numbers. On the contrary if you are spending $2000 a month getting 10 leads which lead to less than one client a year you may want to look at this program and remove it. The return on investment even if that program gave you 1 client a year would be .31 which means you give them a dollar for 31 cents back.


In the future when you are buying advertising it is crucial that you learn what ROI means and how it can work for you. Every company has different margins they must work on and the math with tell you if it works. For a broker buying leads for a real estate agent they need to equate in the split they are taking with the agent to ensure the numbers are correct, For my business in order to buy leads for agents we must see a 3x or above ROI or it is not profitable but for agents to buy their own leads all they need is a 2X ROI and it is worth it. If you find an advertising program that is working learn to shift money towards it until you see ROI drop and be willing to change course quickly since there is nothing worse than waste ad dollars.