What makes your phone ring?

Measure your marketing’s effectiveness and increase your business.

by Ward Lowe   Nobody claims that marketing is an exact science, but this survey data still blows the mind: Accenture, a worldwide consulting company, last year asked 175 senior marketing executives from the U.S. and United Kingdom if they could track a marketing campaign’s effectiveness. Nearly 70% of these marketing "experts" responded that they could not measure a marketing campaign’s return on investment.

As discouraging as those results may seem, marketing specialists who work with REALTORS® contend that you can determine if your marketing efforts work. "One of the biggest misconceptions about marketing is that it’s an elusive thing and can’t be measured," says marketing consultant and former real estate broker Wanda Loskot, owner of Success Connection in Sarasota, Florida. She and other marketing professionals agree that with some planning and a little effort on the front end, your marketing campaign can show if you’re wasting your money on those newspaper ads.

The face that launched 1,000 brochures

Before you set up your marketing materials for easy tracking, first make sure you’re using effective marketing techniques. Marketing professionals familiar with real estate emphasize that many agents waste money because they ignore the principles of good advertising.

Define your target audience before you spend money on advertising. Do you specialize in first-time buyers? Then don’t run ads featuring vacation homes. Focus on what you do best, market that message to your intended audience, and pay attention to what they want. Keep in mind that you may not be part of your target market.

Stephanie Kruse, president of KPS|3, an advertising, marketing, and public-relations agency in Reno, Nevada, bluntly advises, "You may not like your marketing. You may not like your sales approach, but it may not make any difference because you may not be your target audience."

Offer consumers a specific benefit that makes them want to pick up the phone and call you—not just a picture of yourself. Advertise your services and your brand, but avoid trumpeting only what a wonderful agent you are and how many millions of dollars you’ve closed. Tell customers what you can do for them today.

"I see a lot of REALTORS® running ego-driven ads without an offer or a specific call to action," Kruse says. "Even if someone sees your ad, there’s no reason to call you. You need to show them a specific offer that is a value-added component of their contact with you."

Kruse gives an example of a REALTOR® who always sends postcards to neighbors of a recently sold home, reporting the selling price and offering a free "mini-evaluation" of their home, if they call. This effective direct-mail campaign targets a specific group and offers a simple, enticing service to homeowners.

Loskot also believes in marketing that prompts a consumer response. "Consumers are being attacked by all types of marketing all day long. A pretty, colorful ad that says, ‘call me if you need me’ won’t work." Instead, compel them to call by offering your knowledge rather than throwing a listing in their face. This type of marketing encourages building relationships with consumers, which is much more effective.

The same, yet different

A targeted marketing plan, consisting of dazzling ads, postcards, and brochures, may generate lots of calls. But do you know if consumers are responding to the postcards or the newspaper ads? Toni Stewart, vice president of marketing and public relations for Keller Williams, reports that even the top producers in her office often don’t know what’s working for them. "The biggest weakness we have as an industry is that we don’t track our leads and we don’t track our marketing."

Encourage consumers to contact you different ways, such as via e-mail or toll-free numbers. For example, print only your e-mail address or Web site in your newspaper ads and include only your telephone number on a postcard. Or, advertise one toll-free number in the newspaper and use a different one for the radio. If you have only a single phone line, use your cell number for one ad and your office phone for the other.

Carolyn Lowe, senior marketing manager for a large computer corporation, suggests employing codes in different printed marketing materials (e.g., "TR1" for Texas REALTOR®). This is especially helpful when your ads urge the consumer to take action, such as contacting you for a free report. "Whether the customer calls on the phone or sends an e-mail, if your ad tells them to use a code to receive a special offer, then you know where they saw your ad."

To compare the effectiveness of your customer offers and calls to action, ask for a large-circulation publication to do a split run. "You run two ads, identical except for your offer to the consumer and code, in the same issue," advises Lowe. "Put one ad in half of the issues and substitute the other in the remaining half. That way you eliminate the variables and can really compare results."

If you advertise in publications that don’t offer split runs, alternate your ads by issue for a short period to test their effectiveness. Or run two ads with different codes and offers in the same issue.

Your Web site’s tracking reports can also facilitate measuring your marketing, according to Loskot. Post free online information on three of your site’s pages. Then advertise this consumer benefit with three different forms of marketing, each pointing to one of the pages. The number of views each page receives reveals which marketing methods generate the most interest.

Of course, for any of these tracking methods to be effective, you need to commit to recording the data. Depending on your preference, you can track calls on an index card, date book, Excel spreadsheet, or PDA. All that matters is you collect the data. Loskot reminds her clients, "Tracking is not very complicated, but it takes a good setup and some diligence."

Are you threatening me?

In a perfect world, your carefully planned marketing would result in a neat spreadsheet, indicating where every customer contact originated. But let’s step back to reality, where some consumers seem to contact you without rhyme or reason. How do you determine where those people heard about you? Ask.

Kruse admits this is basic stuff, but says few agents do it effectively. "Ask clear, non-threatening questions when a consumer calls. Probe gently." She realizes that on a very busy day, it’s difficult to take time to ask these questions, but it can pay off. "If done right, these questions can not only track your marketing, but also help the sales process by making that initial, friendly connection with the customer."

Stewart emphasizes keeping the customer at the center of the conversation when asking tracking questions. "Always answer their questions first, but then say, ‘To give better service to you and to future customers, may I ask how you happened to call?’ They want to be a part of that process."

This method of tracking can be effective, if you faithfully record the data. "REALTORS® have to want to know where their business is coming from," Stewart says. "They have to maintain their objectivity and write down if the call came from their sign, Web site, or direct mail."

And the winner is …

Eventually, your carefully tracked marketing data will reveal a breakdown of where your calls come from. Stewart says, "Look at your statistics. Go and spend your money in marketing where people are seeing you." If 80% of your customer contacts come from direct-mail postcards, then spending 75% of your marketing budget on newspaper ads doesn’t make a whole lot of sense.

In addition, you can extrapolate from the data your cost per lead and, over time, determine your return on investment. If a 1,000-postcard direct mailing costs $250 and generates 30 phone calls (an average direct-mail return rate), then your cost per lead is just over $8. Keeping this kind of data for all your marketing efforts produces concrete numbers that you can directly compare to each other.

For a more in-depth analysis, record how many transactions result from your initial contacts. Comparing the commission you earn to the cost of the marketing campaign that generated the commission shows your return on investment. While that statistic ignores the hours you probably invested in the transaction, it provides a real measurement of what your marketing bought you.

Don’t fret if your marketing campaign at first doesn’t generate attractive numbers. Tom Womack, president of The Industrial Revolution Advertising & Public Relations in Dallas, says be patient. "Most small-business owners don’t realize the time and expense necessary to create a good marketing campaign."

And consider other factors, such as a soft economy or poor ad placement, that may influence your lack-of-response rate. "Overnight advertising on a radio station is cheap and appeals to your bottom line, but no one is listening,"says Womack.

Loskot also preaches patience. "Don’t give up because one ad didn’t work. Maybe it was the headline. Maybe the offer wasn’t clear. Maybe you need a toll-free number. Change one thing and track the result. Many REALTORS® will try new marketing, track it, see poor results, and say it didn’t work. Then they go back to their old way of marketing, which isn’t a good idea."

Even once you find a successful approach, your work is still not done. Both Kruse and Lowe say that you need to ensure your marketing efforts don’t outlive their shelf life and lose their draw. "If you implement an effective ad in March, track it over time," Kruse advises. "If there’s a fall off in responses, try something new."

I didn’t hear you the other 26 times

Whenever you change your advertising or implement a new marketing strategy, don’t expect immediate results—don’t even expect results anytime soon. Research has shown that a consumer must be exposed to your marketing nine times for it to be effective. However, on average, that same consumer sees only one of every three attempts you make to market to him.

That means you may need to put your marketing in a consumer’s face 27 times before he’ll contact you. But if you target the proper audience, offer those consumers a reason to call, and test and track your results, your 27 attempts will be money well spent.

Then you can call those 175 senior marketing executives who participated in the Accenture study and explain to them how to track their marketing.

Photo © PictureQuest.

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