I recently took part in the most amazing panel on Internet marketing ever. Two other panelists and I spoke on Internet marketing, Web site optimization, and social media at a fantastic conference on distressed properties. Well, that was supposed to be the topic of the panel, at least.
The other two panelists decided that the more interesting topic was how to run a brokerage focused on selling bank-owned properties (REOs), and I spent most of my time trying to make the point that marketing shouldn’t be an afterthought. I have no idea how successful I was in trying to get that message across.
But I did learn some new things, which I confess doesn’t happen all that often at conferences.
For example, I learned that all you need to do for success in Internet marketing in the REO space is to get a ton of listings from banks — which you would get by physically knocking on bank officers’ doors — and then pricing them really low and throwing all of them on a Web site. I also learned that you can get your Web site developed for free, and the Web marketing (including all social media) conducted for free by using unpaid interns.
I also learned that marketing analytics is completely useless in the REO business. "Analytics, schmanalytics," said my esteemed co-panelist, who opined that most REO-centric brokers and agents he knew were far too busy dealing with the business of getting things done to spend time looking at boring statistics.
I have already written Adobe to let them know that they wasted a colossal amount of money acquiring Omniture, a Web analytics company, for $1.8 billion. And, of course, I’ve contacted the appropriate authorities to let them know that Bentley, which offers a master’s of science degree in marketing analytics, ought to lose its accreditation.
Doing vs. doing for a reason
Snark aside, let me advocate for analytics — even for the busy professional.
I understand that professionals working in the distressed properties arena may be up to their eyeballs in work. I understand that banks can be capricious, that buyers may have unrealistic expectations, and that each transaction requires a ton of hand-holding. So yes, if you’re so overwhelmed with leads, with inquiries, and with demand for your REO properties, by all means don’t bother with analytics.
By the same token, don’t bother with marketing, either. Putting listings on a Web site is technically marketing, of course; but it is the equivalent of putting toys on the shelf during the Christmas shopping season.
Real marketing requires thought. It demands consideration of the product, the competition, the market conditions, distribution channels, and advertising strategies. True marketing is an art requiring insight into the human psyche and a science demanding that guesswork be replaced with knowledge as much as possible.
Analytics is the foundation of the science part. Without analytics there can be no knowledge. And without knowledge there can be no doing things for a reason; merely doing things to do them. …CONTINUED
Consider your Web site. When was the last time you looked at your traffic stats? When was the last time you went beyond the simple trio of "uniques," "visits" and "time on site"? If your traffic and lead count have stayed flat for the past six months but you haven’t pulled your analytics to see what’s going on, and yet you kept doing the same thing for six months running … were you expecting a different result?
A definition of insanity is doing the same thing over and over again and expecting a different result. To me, that’s what "marketing" without analytics is: insanity.
Put another way, marketing without analytics is doing for the sake of doing something. With analytics, marketing can become doing something for a reason.
Do you want to improve your conversion rate? The analytics tell you whether what you’ve tried — maybe improving usability, or moving an inquiry form to a different place on the page, etc. — worked to achieve the goal you had in mind.
If it worked, great — if it didn’t, you try something else. Trying to drive more traffic to your site and want to see if social media works? Without analytics, you’re just trying it to try it. With analytics, you’re doing it for a reason — and substantiating it.
In all seriousness, if you’re not going to measure and analyze your marketing efforts, I’d like to recommend not bothering with marketing at all. Just throw listings on a Web page and be done with it.
What to measure
While there are dozens, perhaps hundreds, of things you can measure for one reason or another, I believe that most real estate professionals should keep track of three things:
1. Web statistics. Probably what most of you think of when you hear "analytics," and in many ways the easiest data to gather. Keep track of your Web site statistics. There are dozens of books out there on how to do this, and unless you’re a national Web site with major advertising revenues, Google Analytics will be more than enough.
Keep track of unique visitors, visits and time on site as your main three. You should be looking at this perhaps weekly, and not less than once a month. I also recommend keeping an eye on your bounce rate, top landing pages, and top exit pages.
If you have any sort of non-listings content on the site (and if you have no such content, consider folding up shop and joining a brokerage that has a good site), keep track of your top content on a semi-regular basis.
2. Lead conversion. While the emphasis here will be on your Web site again, keep in mind that you should be keeping track of all leads from all sources. Here, you will want to track the conversion rate from each step of the sales process to the next. …CONTINUED
For example, suppose you require site registration to receive e-mail newsletters, then use a call to action to initiate the sales process, then a qualification phase, then the actual sale. You want to track each step here. Say your registration rate is 5 percent, conversion is 10 percent, qualification is 60 percent and the sale is 25 percent. If you drive 10,000 unique visitors to your site in a month, that means you’re registering 500 people, converting 50, qualifying 30, and selling 7.
One key derived metric from this exercise is the cost of acquisition. If a typical customer generates $5,000 in revenue for you, and 10,000 visitors leads to seven transactions, then your cost of acquisition should be up to $3.50 ($35,000 divided by 10,000). As long as you pay less than $3.50 to create a visitor to your Web site, you make money.
Do this for every lead: telephone, newspaper, whatever. Track each step of the process, and track the conversion rate or kill rate or success rate for each step. This way, you can make changes to how you do lead management or institute a new close to see how those affect each conversion step.
3. Customer satisfaction. The final piece of marketing analytics is your customer satisfaction. In some ways, you can use your Web statistics to stay on top of your lead generation efforts, and the lead conversion statistics to gauge whether you’re translating those efforts into dollars.
To some extent, those cover the promotion and distribution components of your marketing mix. Customer satisfaction analytics can help you to evaluate your "product" and pricing for professional services.
You want to know not just if your customers were happy with your service, but also what they liked about it and why. Longtime readers of mine know about how much I like Net Promoter Score for this purpose, but frankly you should at least make a simple phone call after the closing and keep track of what they say.
If you’re a broker and you have agents, or you are an agent team leader with buyer agents, you will want to keep track of customer comments and feedback on all of your people.
Again, there are dozens of things you can keep track of and analyze every day, including financial performance, return-on-investment metrics, and so on. But unless you have a professional marketing team working for you, it might be a bit much to try to get all of the information.
The above should provide a solid foundation for understanding what you’re doing, how that’s helping or not helping achieve your goals, and what you need to adjust.
So when it comes to marketing, don’t be like Nike and "Just Do It." If you’re doing, then do it for a reason.
Robert Hahn is managing partner of 7DS Associates, a marketing, technology and strategy consultancy focusing on the real estate industry. He is also founder of The Notorious R.O.B. blog.
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