What is important – Response percent-ages OR ROI?
Response – no. of inquiries or calls you receive from any marketing activity eg. newspaper ad.
ROI – Return on your Investment. Before we start discussing about this. Let me share with you my recent statistics with one campaign I did for REMP.
Here are the numbers – Total Letters sent – 198 ( All members of PBAN / CREDAI) Total expenses – Rs 35 / unit = Rs 198 X 19 =Rs 6930
Total Builders Responded – 13
Actual meetings – 07
Actual Clients – 03
(Who paid me advance Cheques & started work)
Now you may look at this from number of angles. But if you ask me – This campaign has been very very profitable to me. How?
Let me explain –
You may think that the actual no. of Response is VERY SMALL i.e. 13 who called & ONLY 03 who did become clients out of whole 198 Builders. That is right.
So if you think purely in terms of percentage Response then it comes to = 1.4% which doesn’t seen very high.
But I am here to tell you, I’ll be more than happy even with the response of 0.5% Yes. half of 1 percent.
The reason is , the value of each builders client is VERY HIGH for me in this case.
The exact worth of 1 client 3 lacs+ for me. That’s why I said I would be happy with even 0.5% response. Also if you see the ROI, then it would be more clear to you. I invested = Rs 6930 I am getting = Rs 3X3 = 9 lac / over 12 months..
That is ROI of = 12987%
But here normally they stop.
They simply check the no. of calls or the no. of enquiries received. And ask their sales Executive to do some follow-up. And that’s the end of it.
In fact, they must keep track of The enquiries till those are converted into sales – or at least soon of them. After that the ROI should be calculated in following manner.
Eg – The ad cost = Rs 45,000
Total circulation = 50,000
The Phone enquiries = 30
Actual visits / site visits = 15
Actual Sales = 02
(In 3 months period)
Average sales value = Rs 25 lac.
Total sales value = Rs 50 lac.
Now Response percentage = 30/50,000 = very poor
ROI = 50,00,000 / 45,000 = 11111 %
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Yes, that’s right. Twelve thousand percent.
So even I got response percentage very low, my ROI is very very high. That’s why we must always focus on ROI.
How does this affect the marketing Builders do?
The builders who understand this can greatly benefit from this. The normal scenario with builders when it comes to marketing is they think of newspaper first, then may be website & cable & so on.
We’ll take example of Newspaper advertisement- Builder plan to give say 12 ads in Newspaper. He finalizes 3 different newspaper & purchase the space on specific date. The ads are released, get printed & get some response.
The whole point in you must look at your marketing expenses as investments & think in terms of Return on Investment.
This will dramatically change the way you do advertising & marketing. In above example, you would or rather you should NOT limit yourself to 12 ads only. You must keep on doing it as long as the ROI is acceptable.
So should be the case with ALL your marketing.
Now use this & see how fat Your properties sell out!