Creating a real estate marketing plan can be one of the most important things you do for your real estate business, if you don’t want to fly blindly.
It can give you direction and help you reach your revenue and profit goals.
But what is a real estate marketing plan and how do you create one?
A real estate marketing plan describes your advertising strategy to reach your business goals, how you generate leads and how you reach your target market and potential customers.
To create one, you need to determine your business goals, your value proposition and unique selling proposition, which, in turn, inform the marketing channels you will use.
By using a concrete practical example, I will discuss in this article how this is done and further clarify what a real estate marketing plan is.
What is a Real Estate Marketing Plan?
The term ‘marketing plan’ is basically a synonym for ‘marketing strategy’.
The reason for this is because it is based on the marketing strategies you plan to apply.
So, a real estate marketing plan is a document that describes what kind of advertising strategy you as a real estate professional or real estate business will use to reach your business goals, generate leads, and reach your target market with your respective customers.
It also lines out which campaigns will be carried out over a certain period of time. But that’s not all.
It defines how those campaigns will be measured, so you can determine if your real estate marketing activities are successful or not and what your USP (unique selling proposition) and value proposition are.
Then, it also determines which marketing activities you will carry out on a weekly, monthly, quarterly and/or annual basis.
Important questions to ask for your real estate marketing plan are:
- What are your business goals?
- What results did you get from your market research, and who are your target customers?
- What is your value proposition?
- What is your unique selling proposition (USP)?
- How will you reach your target audience and potential customers depending on geographics and demographics (with regards to real estate demographics, this article of mine could be interesting to read too)?
- Which marketing channels are you going to use to reach your potential customers?
- With which metrics will you measure your advertising results?
Why Would You Want a Real Estate Marketing Plan in the First Place?
After having defined what a real estate marketing plan is, many of the reasons for creating one may be already obvious.
I think the question of why you might want to create one is best answered by describing what happens when you don’t have one.
Without a real estate marketing plan, you will basically be flying blind or shooting a target with closed eyes and hope that for some miraculous reason you will generate buyer or seller leads.
You won’t know what your target market is and thus, not know who your target customers are.
This will lead to you not knowing your value proposition and unique selling proposition.
By the way, the value proposition outlines what benefits you, as a real estate business, can deliver to your customers.
The unique selling proposition (USP) is how you do this differently than your competitors.
So you see, both are based on knowing your target market with your target customers.
This all is defined and outlined in your real estate marketing plan and without it, it’s more like gambling and your odds of success with your marketing campaigns will be reduced significantly.
How to Create a Real Estate Marketing Plan
Now that you know what a real estate marketing plan is and why it’s better to have one, you can create one.
To make it a bit more concrete, let’s use some numbers with an example real estate business.
What Are Your Real Estate Business Goals?
Suppose you want to generate a profit of $150,000 per year for your real estate business.
In order to get this profit, we need also to take into consideration the taxes you will have to pay.
Assuming the corporate tax rate of 21% in the U.S., you will have to generate revenue of $189,873 ($150,000 divided by 0.79).
So, your revenue goal per year is $189, 873 which means $15,822 per month and roughly $4,000 per week.
If you are a realtor, we can assume a commission of 3% per sale on a median home price of $320,000, which is $9,600, meaning that you would need to sell 1.6 homes ($15,822 divided by $9,600) per month.
To not overcomplicate this, we rounded the number to 2 homes per month.
Next, you would need to determine how many leads you will need to generate to be able to sell 2 homes per month.
As stated by the National Association of Realtors, a buyer visits on average 10 houses before making a decision.
We can convert that into a showing to sales ratio of 10%.
If this is correct, you would need 10 buyer leads that take a tour of the home you are trying to sell before you have a sale.
This great article from the Online Real Estate Agent is more optimistic in this matter and mentions that out of 3 home buyers doing a property tour, one buys which would lead us to a showing to sales ratio of 33%.
In my opinion, this number also strongly depends on the type of market that there is.
In a buyers’ market, it might get closer to the 10% while in a sellers’ one, closer to 33%.
To not complicate our lives, let’s make an average and settle with a 21.5% showing to sales ratio.
If you want to stay conservative, you can apply the 10% from above later on.
So, to sell two homes per month, you would need 9 qualified buyer leads per month who want to do a property tour with you.
But that’s still not the final number we need to help us with the real estate marketing campaign activities.
We also need to know how many leads generated by your marketing campaigns are necessary to get to these 9 qualified buyer leads.
Your Target Customers, Value Proposition and Selling Proposition
This is the time when we have to answer the question of who your target market and target customer is for your real estate marketing plan.
What we are going to do next in our calculation depends on the answer to this question.
Suppose that by doing research in your local area and on the Internet, you decided that you want to specialize in first-time home buyers.
And now, your value proposition to this customer segment is to offer only homes slightly below the average market price with a lot of handholding, and also facilitating getting mortgages.
Your unique selling proposition is that in contrast to your competition, you have contacts and a special system that give you a much higher success rate with loan approvals of almost 95% for first-time home buyers.
Now that we have established your target market, target customers, value proposition and unique selling proposition, we can move on to the next step in our marketing calculation.
In this article, I already discussed how to market to first time home buyers.
How You Will Reach Your Target Customers
In terms of advertising for short term results, one of the best ways to reach them is by using Facebook Ads with ad placements on mobile devices, where you include interests with regards to weddings.
Using first-time home buyers in the targeting section is also a good idea.
Back To the Numbers
For Facebook Ads, we know that this marketing channel has a conversion rate of 10.68%. (source)
But that doesn’t mean that 100% of these 10.68% will want to schedule a showing appointment with you. That would be too optimistic.
The better your sales skills and follow up systems (you can read about following up in this article of mine, the higher the next number (lead to appointment conversion rate) will be.
Now, we assume that 10% (you can substitute this percentage with your numbers according to your experience) of the generated leads can be converted into appointments (our lead to appointment conversion rate).
For obvious reasons, I couldn’t find reliable statistics on that one, because not many real estate businesses like to share their internal sales performance data, without carrying out my own manual study with several hundreds of real estate businesses.
And the last number we need is the typical cost per click for Facebook ads for the real estate industry in the U.S., which is $1.81.
This number is also highly dependent on the click through rate you achieve which in turn depends on the effectiveness of your Facebook campaign and your ad creatives as outlined in this article of mine.
Let’s summarize the numbers for our real estate marketing plan calculation, to reach the goal of 9 qualified buyer leads per month to get to your revenue goal:
- Showing to sales ratio: 33%
- Facebook Ads Conversion Rate: 10.68%
- Lead to appointment conversion rate (assumed): 10%
- Facebook Ads cost per click for the real estate industry: $1.81
To get 9 qualified buyer leads that make an appointment with you, you will need to convert 90 leads per month (9 divided by 10% lead to appointment conversion rate) that you collected via the Facebook advertising campaign.
To convert these 90 monthly leads on Facebook, you need 536 clicks from your ads (90 divided by 10.68% Facebook Ads conversion rate).
Since one click costs $1.81 you would need a monthly marketing budget of $969.
This also means that your costs per closed deal would be $485 ($969 divided by your goal of 2 home sales per month).
Which Metrics Would You Need to Measure for Your Advertising Results?
In the case of the above example, you would need to keep track of the leads you generate per week, which is roughly 23 (90 divided by 4 equals 22.5).
Another one would be the showing appointments you can convert from these leads.
These numbers will help you see if you have an advertising performance or a sales performance problem.
You could include all the above elements of a real estate marketing plan in a document for your internal use and also include the numbers in an excel sheet.
And the same principle applied could also be used for other marketing channels.
In the example in this article, I chose Facebook since this would be one of the marketing channels most suitable for reaching first-time home buyers.
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