It goes without saying that anyone in sales should track their leads: Where they‚Äôre coming from, how much they cost, and how many close.
Why is this so important?
If you‚Äôre spending $500/month on a lead source, and you only close one deal per year from that source, then you paid $6,000 to close one deal. If the lead source provided you a $1MM closing, then it was definitely worth it. If, however, the closing was a $250k home, then your money is probably better spent elsewhere.
While detailed lead tracking is always a great idea, it can become a bit complicated, unless you have sophisticated software to help you with the process. However, tracking return on investment is relatively easy, and is a great place to start tracking leads, if you haven‚Äôt already.
If you‚Äôre a real estate broker, manage a team of agents or a solo agent, the first step is to itemize your lead sources.
Common sources include referrals, sign calls, ad calls, purchased leads, and web leads. It‚Äôs a very good idea to be as detailed as possible when categorizing lead sources. If you purchase leads from multiple sources, you obviously want to know how much each source produces.
The next step differs depending on your role in real estate.
If you are a broker or manage a team, stress the importance of assigning lead sources to every potential client. Leave an option for ‚Äúpersonally produced,‚ÄĚ otherwise you run the risk of receiving bad data.
Then, introduce the required field of ‚Äúlead source‚ÄĚ to your completed transaction reports. When the completed transaction reports are filed, record the lead source, transaction amount, and agency (or team) net.
If you‚Äôre an individual agent, the concept remains the same, but the execution is slightly different. Simply start a spreadsheet and enter the lead source and personal net for every transaction you close.
At the end of the year (or whenever you choose to evaluate finances), you now have a nice record of how many closings and how much revenue each lead source provided. You already track how much you spend on each lead source (and if you don‚Äôt, you should).
Simply divide the total revenue earned by expenditure for each lead source and you now know each lead source‚Äôs ROI! Spend more on the lead sources with the highest ROI and axe or reduce the amount spent on low returning lead sources.