In the last several years, ROI has become a buzzword in and of itself in the realm of new media, and why not? It’s important for any real estate aficionado to understand it and how to measure it. Although it is important to prove why any endeavor is worth exploring, ROI is also used to effectively evaluate areas of improvement as well as success.
ROI, the definition:
A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.
Let’s talk about the obvious
If you consider yourself a business, then you should have a marketing and communications strategy, and if you don’t, then get one. Also, you’ll need to evaluate what you’ll spend annually in relation to both.
Varied uses of social media
One of the problems I have with any argument around social media is how broad brushed everyone paints their questions and answers. Targeted questions to specific components get targeted answers.
A few components of social media:
- Professional networking
- Pull Marketing (the primary focus of this article)
- Customer service
Dispelling a few myths
Although the new media spaces you utilize to reach audiences are often free, social media itself is not free when you factor in the different variables that go into your online presence. A few main examples are your monthly bandwidth fees via your phone, home, and office, as well as the cost of your website initially and the costs associated with maintaining it, not to mention the electronic devices utilized to effectively use them.
Your time is also a variable and the most fluid and damning as it isn’t a controlled expense unless you manage it successfully. This is by far the biggest criticism of those within the social media space, that time seems plentiful when it is actually the highest cost associated with social media when you are a producing real estate agent already.
If you have a successful practice, spending valuable time managing your own website seems cost prohibitive as does sitting online practicing the art of engagement when time itself is a very precious commodity. Abandoning proven and successful methods makes little sense to those that have it on good authority that their market share using those methods aren’t eroding against new online techniques of lead production. If the producing agent does feel a pinch to modernize, then the most cost effective route may be to hire professionals to manage and maintain their online presence, or adding staff (or responsibilities to existing staff) to handle the new media brand relationship side of things.
The BIG misconception
The biggest misconception we’ve seen by most either within social media, or beginning in social media is the misunderstanding that a stand alone website is, in fact, a new media space. Although you would never compare your new media space in size to Facebook, LinkedIn, or Twitter, you cannot dismiss the primary value these spaces hold in relation to your own new media space, and that is consumers. Understanding the traffic value of Google, coupled with the traffic value of the big three social media spaces, it only makes sense to pull traffic to your own community known as your real estate blog, where your real estate content is the value and point of sale for your brand.
Discovering the return
Discovering your return is not black and white for any practicing real estate professional. We all have varied ideas of what needs to happen in order to make the phone ring. While some use social media solely for professional networking, that is probably one that is easiest to measure in terms of direct referrals, however, when a business and or professional is using it specifically to leverage buyers and sellers, the opportunities require a lot more fine tuning.
A few of the most obvious indirect returns are: (tangible and measurable)
- Newsletter subscriptions
- Comments to articles
- Measurable traffic from new media spaces
- How many blog articles are shared socially
Obvious direct returns: (tangible and measurable)
- Closing a transaction
- Getting direct referrals
- A phone call
- An email
- A meeting
These only make sense if the base readership within new media spaces are (controlled) actual consumers of products and not real estate professionals. Again, this is another argument by producing agents that most of what real estate professionals using social media have done are build followings of competitors rather than consumers, and we would agree. Measuring any of the above mentioned indirect returns need to be vetted properly for actual buying consumers, otherwise you’re just lying to yourself, unless again, your goal isn’t to sell real estate but something else entirely.
Using tools to measure the return
Using free tools such as Thymer to monitor your time, and Stat Counter and Google analytics to measure both normal traffic and traffic spikes for popular pages and articles, you can measure the success of headlines used to pull traffic from major social media spaces to your own as a possible return, and ultimately measure indirect (and direct) responses. Again, you must have a solidified goal in mind in which to measure your campaign, while staying aware of both good and bad side effects of your marketing tactics. For example, broadcasting a headline several times a day and tracking when the highest return is possible is crucial to understanding your audience.
Your marketing tactics should always align with a goal, otherwise you’re only blowing hot air. Tactics do not take a year to measure, unless you’re equating your new media space to an incubator. If you’re using newsletters and your blog as an incubator (or pipeline), then you should develop ways of connecting directly with these consumers within the incubator to better discover their goals. This is the power many are feeling in social media, but have yet to put their finger on, describe, or have yet discovered how to wield it- we go directly to connection via offline meet-ups.
The phase of discovery
Those that say ROI isn’t measurable aren’t really looking at what can be measured. It’s in measuring the obvious that you begin to see how to build outward through channels. Channels could either be a specific listing, or a specific category you’re building out as a niche such as ‘Foreclosure’, and another channel might be ‘Home buyer tax credit secrets’ and measuring both Google results as well as pulled traffic from new media spaces around those niched headlines, and better optimizing invitation (capture) mechanisms for those categories- the same could be applied to direct mail campaigns that lead consumers to specific landing pages that then lead outward to connecting via Twitter where headlines are used as touch mechanisms. The possibilities are endless.
What is difficult for many to swallow is the time in which it takes to initially build a following (audience) within new media spaces that actually consume and share your content or the separation of the professional networking side of social media. But one only needs to recognize that we’ve all sold real estate with our websites as the initial point of brand consumption, as well as been a Google result or received a referral from a professional network to justify the initial investment in opportunities to multiply exposure and create opportunities to do business before the website is ever even seen- this is the ultimate appeal of both, love it or hate it.