Have you tried Google analytics? It can get pretty confusing. However, this is critical to your business and should never be left to “gut feeling” and “herd instinct”, as to where you place your marketing spend. With so much money being spent on marketing and advertising, how do you know which is best: Not necessarily the cheapest monthly spend – nor surprisingly necessarily the one sending the most traffic!.
For any real estate business, whether a one-man brokerage or a large organization, there are two metrics that trump all: visits and conversions. These are the Google stats that help you get to your bottom line, and you need to be actively monitoring them.
I came across a well laid out, step-by-step guide, by Bob Samii on how to use Google analytics to get you started with tracking your conversions, analyzing your marketing spend, and improving your efforts to acquire online customers. So I thought I would share some of the information with you.
1. Set up analytics and include a goal for your bottom-line conversion. For most real estate companies, the key conversion to track would be sales inquiries, unless you offer products or services with payment online. Using the Google search statistics, make sure to set up a custom goal in Google Analytics so you can track leads are from your website such as when a visitor performs a sales inquiry — normally this would be after the visitor hits the “submit” button on a contact form.
2. Include a value for your conversions. If you’re an e-commerce company, it’s fairly straightforward to use web analytics to set a value for each conversion based on the product or service you sold. For a real estate business, you need to define the value of a potential customer.
You can do this by figuring out the percentage of online inquiries you convert into real customers and what the average commission would be. So if your average commission is $5,000 and you convert 10 percent of online inquiries into customers, then the value of each online conversion would be $500 (10 percent of $5,000).
3. Segment your online traffic based on channels you are actively marketing. The most effective way to do this is to create a spreadsheet and include all of your key channels. This would include segments such as newsletter, pay per click, direct advertising, display ads, social media, search engine optimization branded (branded organic traffic), and SEO non-branded.
4. Include marketing spend for each of the channels. Are you running a Google AdWords campaign? Spending money on newsletters? Working with an SEO agency? If so, you want to reflect these costs and associate them with the respective channels so you can analyze where your money is being spent most effectively.
5. Calculate cost per acquisition (CPA). Using conversion numbers and your cost data, you can now calculate cost per acquisition (and income per acquisition) for each of your channels. This is simply costs divided by conversions for a given channel. You will see significant variances between each of these segments, and that’s completely normal.
6. Analyze the results. Once you start collecting this data, you will then be able to understand how you’re spending your money, which channels are most effective, and areas to better optimize and improve. Most importantly, you want to compare month-over-month and year-over-year data and look for red flags (unusual variances in your channels) to have a strong handle to make smarter decisions in your online marketing spend.
Once you fully understand how to use Google analytics, you’ll be surprised at the power it lends to your management decisions. Good luck!
And thank you for making me Your Orange County Real Estate Connection.
Michael Caruso, Broker ABR ABRM CLHMS CRB CRS GREEN GRI
Past President, Orange County Association of Realtors (949) 753-7900