What's The ROI of Social Media & Brand Awareness?
Social media is the best marketing tool in the history of real estate (and small business in general). It can completely explode your business if you do it correctly, but so many people hesitate to invest in social because they can’t see an immediate return on investment (ROI). It’s such a common obstacle, so in this article I wanted to talk about how social media DOES generate a positive ROI and why you need it.
Real estate works differently.
Real estate works differently to most industries. In eCommerce you can run ads for $100, sell $200 of products and double your money. But since real estate has such a long buying cycle it’s very difficult to track ROI on a dollar-for-dollar basis. What’s the ROI of a letterbox drop? A phone call? A birthday card?
It’s not as black and white like other industries. Social media, brand awareness and content marketing DOES generate a positive ROI, you just track it in a different way. This also applies to other ‘high trust’ industries with a longer buying cycle.
Lead generation is easier to track than brand awareness — you can simply measure each step of the funnel, and by the end you can easily calculate how much you spent to acquire a customer vs how much a customer is worth. Here’s an example below:
Ad spend = $1000
Total leads = 25
Cost per lead = $40
Lead conversion = 10%
Cost per customer = $400
Value of customer = $5000
Return on investment = 1250%
These numbers make sense hypothetically — although it’s a bit easier said than done. If it were as simple as throwing up a Facebook ad and getting 3 - 10x your money with little effort, I’d be a billionaire real estate agent! Here’s the difference…
Compare the difference…
Think about this… on one hand you’ve got a cold lead with very little intent that opted into a freebie they saw on social media. Until this ad they had never seen you before and there is no pre-existing relationship.
On the other hand you have a hot, qualified lead who already knows and likes you, and they are coming to you as the expert they need, not you going to them and asking them to work with you. They need you. You don’t need them.
Which lead do you think is going to be higher quality? The second one! And that’s why building your brand, adding value and creating a relationship is where the real money and impact comes from.
Relationships = ROI.
In the past you could see how much you spent, and how much you made. Whilst this may still work in some scenarios (like the lead gen example), you need to focus on the invisible, long-term ROI. That comes from brand awareness and relevance. Of course you still want to generate leads - but you need to spend time and money nurturing them not just selling to them.
Not everyone is ready to buy right now. But when they are, they will come to you and not someone else if you’ve been the most relevant and consistent resource for the past 6 - 12 months.
It takes time to build trust, and you need to become the ‘go-to’ person they need. If you focus strictly on leads and immediate ROI, you just can’t win in today’s landscape and you will have limited success. But if you play the long game, you will crush everyone else who is too short sighted and desperate.
I just signed a lovely client who saw us adding value on Instagram for months. She wasn’t ready right away, but I was building a relationship through our social media. She called me (and at the point it feels like she already knew me), we had a great chat and she signed up the same day. How do I define down the dollar the ROI of that? You can’t!
On the flip side I had another client who I spoke to 10 months ago. We’d kept in touch until the timing was right and she became a client. How do I measure that? Do I calculate my hourly rate by the amount of minutes spent getting in touch, then factor in money spent on….. (you get the point).
Things that have tangible value.
Whilst it can be harder to track ROI on a dollar-for-dollar basis, there are definitely tangible things that have a lot of value online that are created by social media. Let me explain with some examples…
As a real estate agent you need to talk to and stay in front of as many people as possible. One of the easiest ways to measure this on social media is how much reach you are getting. This actually can be easily measured. If you are boosting posts, you can see how much it costs per 1000 people reached (and these people are super targeted). Good luck achieving that with a letterbox drop!
Let’s be honest — we live in a world driven by likes and social proof. If you have social media accounts with a decent number of followers and engagement, you look more credible. It’s not easy to get engagement in today’s competitive world, so posting consistently makes you look professional. Engagement aside, there is a universal expectation for any serious business to have an online presence.
If you share great content you can get featured in the press. Our client Ben Wakely was featured in Elite Agent’s top 50 influencers for his weekly live streams. I’ve been featured on Channel 7, Domain.com, Business Brainfood and lots of other media to share my input, simply because of my content.
Analytics & Insights
Every piece of feedback — whether it’s a like, comment, click or share gives you valuable insight into your audience, what captures their attention, what repels them and what drives them to take action. With social media you can test different things quickly to see what works and what doesn’t.
Useful content and blog articles can skyrocket your Google rankings. At the time of writing, Mastered Marketing ranks number 1 on Google for the term ‘social media for real estate’. That is a highly focused, high-intent keyword that brings me business, just from a super-useful blog article.
Measure it annually.
If you want to ‘try’ social media for a month or two, don’t bother. It takes time to get it rolling, and that’s not enough data to get decent information. Look at your social media investment vs return each year so you can see the impact.
You won’t have an exactly dollar or percentage figure, but you can as a whole whether social media had a positive impact on the business based on growth, customer interaction etc. Calculating ROI can be simple if you know 3 things:
What you want to achieve (e.g brand awareness)
What that metric looks like (e.g reach + engagement)
How much you’re comfortable paying for it.
Social media vs traditional.
You can’t track the exact ROI of a bus stop or a letterbox drop. Yet agents still do that, and then don’t get on social because they can’t see the ROI. What!?
Social media gives you amazing value compared to pricey offline marketing and even Google Adwords. It’s also way more targeted so you don’t waste time and money on people who aren’t prospects. And finally, it gives you data and insight like reach, engagement, clicks etc that traditional media channels can’t give you.
$500 won’t go far with print media. $500 will go a very long way on social media.
Social media is NOT a silver bullet.
I genuinely believe that absolutely every real estate agent and business in general should be on social media. One because it’s so powerful and two because…. come on it’s 2019 it’s just standard practice. BUT!
Social media does NOT replace everything. I’ve seen people who invest in social media, but then they get lazy. They stop making as many calls. They stop networking. They stop putting in effort, thinking that social media alone will carry them. This isn’t true! And your results will slip, making you think it was social media that didn’t work, but it was actually other factors.
Social media has to COMPLIMENT everything else you do. It’s like a human body — you can’t just do bicep curls and nothing else and expect to have a fully functioning, healthy body. You need to do it all. Social media is like… a personal trainer to speed up the results. (Weird analogy — I think you get what I mean!)
If you don’t do it, your competition will.
Look, the truth is - sooner or later you’re going to have to do this. If you don’t adapt, your business will die.So rather than waiting until the competition has done it and then having to invest double the amount of time and money to catch up, why not get started right now?
Hopefully this article has helped you see the value in social media and the different ways it can generate a positive return on investment. If you’d like to explore setting up your social media for real estate, get in touch with me and my team and we’d be happy to help you out.
Mitch Hills @masteredmarketing