Advertising 101 (Part 7)



In this final installment I’m going to give you the key that will make you money: knowing how to test your results.  If you can’t test and measure your results, you can never make an intelligent and informed decision about various advertising ideas that come your way.

In the 1980s when Lee Iacocca was CEO of Chrysler Corporation, he was asked about the millions of dollars that the company spent every year on advertising.  He said that he was convinced that half the money they spent on advertising was wasted.  Then he went on to say, “The trouble is I don’t know which half.”

leeiacoccatimecoverThat pretty well sums up the frustration many of us experience when we see our hard-earned advertising dollars go out and see very little come back in the way of business.  Sure, it was well intentioned, but as the saying goes, “The road to hell is paved with good intentions.”  So is the road to poverty.

“Okay, Matt, how am I supposed to know where my money is being spent well?”  Now you’re asking the right question, and there are ways to measure.  I’ll show you what I mean.  First we need to make sure we have the right equipment, so to speak.  Then we need to know how to do the math.  You’ll see just how easy it is.

First let’s talk about equipment.  Not only do you need to be able to account for the costs of the ads — remember, both hard costs and soft costs — but you also need an accurate measure of the number of leads produced over a given period of time.  That is where it gets tricky for most agents, so they go with their gut feeling.

Not so for me.  I know exactly how many leads I’ve received in the last month, or week, or whatever time period.  No guess work.  The reason I do is that they all automatically come into my client manager tagged with the source of that lead.  How cool is that?

In the last week I’ve received 53 inbound leads, and all were through the LCM on my website.  I am currently not advertising using my LCM phone gateway, but if I were, I would know exactly how many came through that as well.  And I would also know exactly how many leads each advertisement was producing.

For me there is no guess work.  No wondering.  And the really cool thing is that I didn’t spend a dime on advertising.  And I’m not alone.  There are lots of agents who use our LCM technology and don’t spend money on expensive ads and still generate all the business they want with nothing but free advertising.

Now that you’ve calculated the total number of web inquiries and phone calls you’ve received over a given period of time, let’s say one month, now total up how much the cost was for each type of advertising.  Then you divide the total cost by the number of leads produced and you have your cost per lead.

Lead Source

Number of Leads

Total Cost

Cost per Lead

Homes Magazine

53

$500

$9.43

Google Pay per Click

40

$210

$5.25

Craigslist Ad

63

$0

$0

Not only do you know where every lead came from, but you know which ideas are the best value.  Using the example above, let’s say your business plan said you needed to generate 130 leads per month to hit your goals.  (If you would like know how to take income goals and turn them into the number of leads you need, use my free calculator at http://lcmsuccess.com/?page_id=7090.)

Now if we only need 130 leads per month, then a prudent businessman or woman would start with Craigslist and generate as many leads as possible there.  When you reached the maximum capacity from Craigslist you would then move on to Google Pay-per-Click advertising, and then Homes Magazines, and so on.

In the example above, I would probably just double the number of ads I was running on Craigslist and I would probably be very close to my goal without spending any money.  But that’s just me.  You might just prefer to pay for Google Adwords and forget about posting your own ads every day.  As long as the cost was within your advertising budget it would be a great solution.

Well that’s it for Advertising 101.  We’ve covered a lot in only a few short installments.  We talked about discovering the purpose of your advertising and knowing your audience, what they want and what motivates them to act.  We discussed how to decide where to advertise by understanding budget-per-lead and cost-per-lead.  We covered the art of crafting your message, both the the value proposition and the call to action.

Finally, I’d like to leave you with this:  Even the best ads won’t generate business if you have an ineffective lead capture.  How much business did your website generate last year? Or your call capture hotline?  Last month?  If you’re like most agents the answer is very little.  It doesn’t have to be that way.  Using the right tools you can capture lots of business.

I’d like you to check out my Ultimate Website.  It comes complete with the latest generation LCM technology both for web and for phone, a client manager, and everything you need keep your advertising costs to a minimum.  You’ll be amazed at how much you get for so little.

 

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Matt

I give away about 99% of all my technology and digital training content, completely free of charge, because I want to see other agents have the same kind of success that I've had. But one thing I charge for is my Ultimate Website technology. This is the web technology I created for myself that turned my real estate practice around overnight, and now I license it agents everywhere. But right now it's too popular and is currently waitlisted. Click here to get on the website as soon as possible and I'll notify you as soon as new invitations become available.

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