Do you like to throw money at different marketing channels, don’t get any results and don’t know why you didn’t get the results you expected?
Well, me neither.
But this is actually what happens when you have a list of different marketing channels that you planned to use based on your real estate marketing plan but don’t track anything (real estate marketing kpis) at all.
And if something is not working as expected and you don’t see it as a testing experiment that takes a longer time, you just switch to the next one and then rinse and repeat.
By not tracking anything I mean specific key performance indicators that will happen on a regular basis.
That’s why this article will discuss the 7 most important real estate marketing KPIs you can track and by doing so, increase your chances of turning an unprofitable campaign profitable.
But it also will help you make better decisions so you can ditch a marketing channel that doesn’t make sense at all anymore performance-wise.
What Are Real Estate Marketing KPIs and Their Benefits?
You may have heard the saying “What you can’t measure, can’t be managed.”
This quote comes from the management thinker Peter Drucker and there is a lot of truth to it.
This is where so-called key performance indicators, “KPIs” for short, come in.
They are measurable values that can show you how well or not so well you are reaching a real estate business goal.
When it comes to marketing or real estate marketing, these values or metrics are related to the goals of a particular marketing campaign or several marketing campaigns for your real estate business.
Another one of their benefits is that they will help you in iterating through and testing different real estate marketing channels.
They help you to find out which marketing channel to throw out and which one to keep and to focus on or to scale.
They are always important, but even more so when you are starting with a new real estate marketing channel and still have a long way of testing ahead of you.
Without them, you will fly blind and probably spend more money than you want to.
The 7 Most Important Real Estate Marketing KPIs to Track
There are many types of different KPIs in the world of business and the only type relevant for real estate marketing will be the quantitative indicators.
These are indicators that can be represented with a number.
There are many others out there and for the sake of a complete article, I will mention them shortly below.
These are the other types of key performance indicators there are besides the quantitative ones (discussed in this article):
- Leading indicators predicting the outcome of a process
- Input indicators that determine the amount of resources necessary to generate an outcome
- Lagging indicators that help you find successes and failures after an event
- Output indicators that measure the results of certain process activities
- Directional indicators that show you if an organization is getting better or not.
- Financial indicators
- Qualitative indicators that can’t be shown as a number.
Now, let’s come to the important marketing KPIs to track.
1) Real Estate Website Traffic Volume
This important marketing key performance indicator is a huge one in itself.
It’s one of the reasons Google Analytics exists.
There are many different subgroups of how you can track website traffic.
I discussed how you can do that already in my article about Google Analytics for real estate.
The amount of traffic you get to your real estate website is important to know.
Firstly, because without traffic, you won’t be able to generate that many leads at least in the digital world.
You will be able to see how your traffic is behaving and if it even arrives at your different contact forms you might have on your property listing pages or on different landing pages from where you want to generate your leads.
One of the important things to track here is the number of unique visitors, the page views, the devices (mobile or desktop) they use to visit your website, and especially where they come from.
The latter will give you clues which marketing campaigns that you run bring in the largest share of traffic (e.g. Google Ads, Facebook Ads, LinkedIn Ads, DirectMail, content marketing (SEO), etc.).
Or, if you realize that 80% of the traffic comes from mobile devices but your real estate website uses IDX property pages with “mobile-unfriendly” iframes, you might leave money on the table by not improving this situation.
2) Click-Through Rates (CTR)
The click-through rate is an important key performance indicator to determine how well you persuade visitors to click on what you are offering.
This content can be made of ads you are running on different platforms, content in general, different web pages of your real estate website and also search results you appear on in search engines such as Google.
It is calculated by dividing the number of clicks you get by the number of impressions (ads shown, organic rankings shown, etc.).
In paid digital advertising, a high click-through rate usually also means lower costs per click.
And in terms of Google organic rankings, it means that you have better chances to improve your rankings.
Because it’s an indirect ranking signal for Google (source).
You can also measure the CTRs of paid digital advertising campaigns against different averages in the industry to find out how well you are doing.
If, for example, your Facebook Ads get a CTR of 0.6%, you will learn that this is below the industry average.
The average CTR of real estate ads on Facebook is 0.98% (source).
3) Costs per Click (CPC)
The cost per click indicator is an easy one to understand, but it doesn’t give that much helpful information for decision-making.
You can just track over time how a particular digital advertising campaign performs in terms of costs.
It shouldn’t be used alone to make decisions on which marketing channel to choose or to focus on.
The next indicators I will mention are way better for that.
But what you can see with it is if you manage to reduce your costs per click over time by increasing your click-through rates of a particular campaign.
4) Conversion Rates (Form, Listings, Landing Pages)
This marketing key performance indicator measures how many visitors complete your determined goal.
And the goals can be many and different ones.
It can be an email list sign-up, a contact to schedule a showing for a specific property, or a contact to schedule a pre-visit for a potential seller.
In e-commerce, it can also be a sale of a product that was done on a website.
The goal for a real estate website is usually to generate a buyer or seller lead by using some sort of contact form.
Conversion rates are calculated by dividing the number of conversions by the number of total ad or website interactions over a period of time.
For example, if you can see that your property listing page contact form was interacted with 200 times during one month and 10 potential buyers contacted you from there, you have a conversion rate of 5% (10 divided by 200).
The conversion rate will also give you clues about how well your offer is doing and meeting the needs of your potential clients.
For example, if you get a higher conversion rate on a certain property listing than on others, it indicates that it is likely the right fit for more people and it might also be priced better.
In the context of paid traffic campaigns, you can also compare with the average industry conversion rates of that specific platform.
Google Ads, for example, give you an average conversion rate of 2.47% in the real estate industry (source).
By knowing that number, you can see how well your campaign is doing or if there is room for improvement.
5) Cost per Acquisition (CPA)
This is a marketing key performance indicator I’ve mentioned quite often on my blog.
While click-through and conversion rates already give you valuable information where you might need to improve, the cost per acquisition can better measure what it actually costs to acquire a lead or a qualified client from a certain marketing channel.
Let’s take an example to show you the difference.
When you get 200 clicks to a landing page from paid LinkedIn ads, you may pay $5.26 per click, which means total costs of $1,052 to get these clicks.
From these clicks, 10% convert into 20 leads (10% conversion rate).
Your cost to acquire one lead would be $52.60 (cost per acquisition).
Let’s assume you also have another ad campaign running on Google Ads where you get 400 clicks to your landing page and you pay $0.80 per click and have a conversion rate of 5%.
If you compare both conversion rates directly without taking the cost per acquisition into consideration, you may prematurely conclude that LinkedIn is better.
But when we calculate the cost per acquisition for the second Google AdWords campaign, we will get quite a different final conclusion.
The total cost to generate 400 clicks is $320.
We get the same amount of leads of 20 out of these clicks (5% conversion rate), and pay $16 per lead (acquisition cost).
So, when we use this performance indicator we can see that the second marketing channel (Google Ads) is actually better in terms of costs per lead, even though the conversion rate is much worse.
6) Cost per Sale
The next key performance indicator for real estate marketing you may want to track is the cost per sale.
This one is not that easy to track since it involves not only your marketing campaign activities but also your sales activities up until you close a deal.
You can calculate it by adding the costs per acquisition and the costs involved to generate one sale or a closing.
For example, if you need 5 qualified leads to generate one sale from the above LinkedIn ads example, you will have to multiply $52.60 (CPA) by 5, which is $263.
You may also have to add the costs involved to follow-up with the generated leads by using direct mail or making calls or other follow-up activities that you will see fit.
Ignoring these additional costs, the cost per sale or cost per closing would be $263.
This performance indicator is even a bit more accurate and reliable than the cost per acquisition, because it also gives you information about the quality of the leads.
Why is that?
You may need 5 qualified leads from LinkedIn and 20 from the Google Ads campaign which would mean a cost per sale for the latter of 20x $16 (CPA from Google Ads above), which is $320.
All things being equal in terms of follow-up and sales performance, it would mean that in the given examples, somehow leads from LinkedIn have a higher quality and convert better into actual closings or sales.
The performance indicator could also be used to track different agents you work with that get their leads from the same lead sources.
And you can also calculate how much money you have to spend to reach a certain revenue goal, and if it is feasible with the marketing channel you measure it with because some marketing channels won’t allow you to scale up without limits.
For example, in Google Ads, some local keywords just don’t bring enough monthly volume, and just throwing more money at it won’t make it go up.
In this case, you might know that you would either need to add another marketing channel, test with new additional keywords or expand to other geographic areas.
7) Online and Offline Marketing ROI
Generally, the Marketing ROI (return on investment) is the gross profit minus the marketing investment divided by the marketing investment.
Here is the formula:
Marketing ROI = (Gross Profit – Marketing Investment) divided by Marketing Investment
This one is even a next level up from the priorly-mentioned cost per sale.
It not only answers the question of what was the cost to generate one sale or closing, but also factors in the gross profit that was generated by a particular marketing campaign.
This information is good when you want to have a good first glance at which marketing campaigns are the most profitable ones.
But it won’t tell you much about what you might need to change to make a not-so-profitable one more profitable.
So, you won’t get much insight about the inner workings of a campaign than click-through rates, conversion rates, costs per acquisition or costs per sale will give you.
It’s the best one to look at first to get a bird’s eye view as a CEO or CEO of a Brokerage firm.
And depending on these numbers, you want to have a closer look at other ones afterward so you know where and which elements you will need to improve (the copy, the offer, etc.) in a particular real estate marketing campaign.
Bonus: KPIs in Social Media Marketing for Real Estate
In social media, it’s much easier to fall for “vanity metrics”, such as shares and likes.
Especially “Likes” can only be vanity metrics if you don’t do anything else other than collecting likes in a Like-campaign on Facebook.
But if, for example, you use the same campaign that was a like campaign before and after collecting a number of them you switch to a lead campaign, you may get your conversion rates up because of the social proof you generated with the like campaign beforehand.
And a lot of shares can also get your costs per click and overall advertising costs down.
But just blind likes or shares without being a means to an end (your paid campaign) are not of such great informational value when it comes to marketing KPIs.
So, to end this article, I will also provide you with a short list of KPIs for social media marketing relevant to real estate.
KPIs for Social Media (ordered from the most to the least important):
- Cost per lead
- Lead conversion rate (e.g. Facebook lead campaigns, or conversions on a landing page of yours from social media traffic)
- Web Traffic
- Follower Count