In general, measuring your return on investment (ROI) with real estate marketing is very difficult, but in a world where analytics reign supreme among marketers, real estate is ripe for disruption.

Real estate agents should no longer accept paying lump sums of money in hopes of farming more leads. The reality is that the quality of leads is decreasing online as more people search for homes on the Internet and fewer people actually buy homes. Therefore, agents need to be careful where they spend their money and start demanding performance-based marketing from advertising companies. Paying for advertising that consumers actually click on or use should be the new standard in real estate.

Google has pioneered performance-based marketing with its AdWords product, while also making it one of the most successful and profitable products ever. The reason AdWords became so successful was because marketers could systematically measure their return on investment. Marketers built trust with Google and therefore were willing to spend a bigger portion of their ad budget there.

Why should real estate be different from other industries? It seems more logical to pay for what people actually click on or see, but from the majority of what is offered to agents this is simply not the case. Performance-based marketing helps both advertising companies and agents make better decisions, as it makes both parties more successful. Customers who find success with your product and can effectively measure their return on investment make for far better customer relations and retention. To me, this is just good business.

Going forward as real estate become more data-driven from finding the right house to home improvement, systematically calculating a return on investment will become the new standard. Companies that adapt this new metric will excel, and others that do not will slowly fade away.

To ensure your marketing spend is maximizing return on investment, here are three tips:

 1. Pay to play

Whether it is offline or online, there are a plethora of ways to track conversion. For example, use unique phone numbers on your next mailing to track how many calls you receive back. Do not spend marketing dollars on advertising that you cannot effectively track. You are simply throwing good money after bad, as metrics allow you to make better, more informed decisions.

 2. Leverage mobile marketing

It is no secret that the world is going mobile and that Apple has sold 10 million iPhone 6’s in its first weekend. The fact is that agents simply have to implement a mobile strategy. At Dizzle, we help agents effectively engage their sphere of influence with our apps and distribution channels. Analyzing end user engagement and conversion rates drives and evaluates our level of client success.

3. Get back to basics

Real estate first and foremost is a relationship business. Real estate is not a commodity or an airplane seat. This is the biggest investment in most people’s lives. People want to work with agents they can trust. Agents should invest in advertising that can be effectively measured or helps build relationships with people.

Will Caldwell, a San Diego resident, is the CEO and co-founder at Dizzle, a mobile real estate tech company that helps Realtors generate more word-of-mouth leads.

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