The first half of 2020 was tough. The coronavirus put a wrench in everyone’s business plan.
That’s why now is the perfect time to take a closer look at your closings, lead sources and advertising costs for the first 6 months of the year.
Here’s what we discovered in our own sales business …
This chart shows the lead sources of all transactions closed in the first 6 months of this year.
As expected, previous clients and referrals are the major source of business.
Geographic farming (red) was very successful, too. It beat Google pay per click (PPC) advertising in terms of cost per lead.
5 Easy Steps to Analyze Your Transactions
1. Transaction List
Create a list of all your closings of the past 6 months. Divide them into buyers and sellers. You can easily generate this list from the MLS. Make sure to add the purchase price and gross commissions with each transaction.
2. Lead Sources
Write down the lead source of each transaction. Don’t go into too much detail. Use the categories on the chart above, like referrals, previous clients, paid online leads, geographic farming, or any other lead source you invest in.
3. Marketing Expenses
Figure out how much money you invested in each of the lead sources. You can find this information in your accounting system (Quickbooks, Quicken, Excel, whatever you use to track expenses).
4. Cost Per Transaction
Divide the amount you spent for each lead source by the number of closings. This will give you the ad cost for a transaction. Now you know what percentage of your GCI goes into marketing. This number should be less than 25%.
5. Lead Conversion Ratio
Finally, count the number of leads you captured in each category and compare it to closings to get a conversion ratio for each lead source. It could be as high as 50% for geographic farming or less than 1% for online leads.
Special Invitation to Look Behind the Scenes
Did you ever want to know what’s going on at RE/MAX LLC, find out who our leaders are, and listen to the CEO and top execs?
Here’s your chance. Click on the picture below to register for this exclusive, free event tomorrow, Thursday, July 16, 2020 at noon.
Hope you will join us! If you’d like to chat about building your real estate business with the most-known brand in real estate, schedule a free video consultation here:
Or call/text me at (614) 395-7375 to get started today!