Are you investing enough in your luxury real estate brand?
A dollar guide to marketing luxury real estate.
After receiving that nice commission check (and of course paying taxes on it) it’s hard to part with any additional money. Sometimes the choice may be between leasing that new BMW versus investing back into your business. While immediate gratification is your natural instinct, money invested now means infinitely more money to enjoy later.
More money sounds nice, doesn’t it?
Any time you invest in the growth of your company, you yield more revenue, and build greater brand value along the way. Most people understand this basic notion, but may not see what this type of financial investment looks like in terms of actual dollars and cents.
Generally, many advise that you should spend 5% to 10% of your annual revenue on marketing, but in real estate, those numbers just don’t work. Keep in mind that, similar to every business, each individual company is unique, with their own individual needs. In order for your company and brand potential to be thoroughly evaluated, you’ll need a custom strategy from a marketing agency. Only after discussing your goals, fears, and brand image dreams (among other things) will you understand the true meaning and benefit to a successful marketing, branding, and public relations campaign. Let’s go on a test run, shall we?
Boca Boca Realty
This guide is focused on the real estate agent that sells more than $10,000,000 annually. In 2014, Boca Boca Realty sold 10 homes, below is the break down:
First and foremost, Boca Boca Realty should set aside .25% for inventory marketing on any home over $2,000,000. That means they would have spent a total of $20,000 on advertising their $8 million dollar listing and $5,000 on their $2 million dollar listing. For the homes that fall between $500,000 and $2 million, they’ll likely be spending up to 50% of the earnings. These are the times they should rely heavily on their brand advertising, as well as leveraging some of their broker’s connections and marketing.
Now comes the fun part, branding. Boca Boca Realty sold $24.5 million in real estate, thus they should spend between $88,200 to $132,300 on building and promoting their brand. The height of their goals and ambitions for the Boca Boca brand will factor greatly into how much they choose to spend. Additionally, they would have spent a total of $77,500 on listings.
Of course, some homes sell quicker than expected, and they got to save some money. Nice job, Boca Boca. Since Boca Boca is run by intelligent owners trying to expand their business, create brand value, and build a successful company, they end up spending $132,300 on building their brand. Smart move. In the end, the total they’ve spent on marketing totals around $209,000, which would be roughly 48% of their net income (broker paid). While this number may initially seem like a lot, it’s a very small price to pay if their main goal is to build brand recognition and grow their Boca Boca Realty business. Investing in marketing gives their new, modern-world brand the ability to take more market share from competitors, which in turn means more revenue for every year in the future.
The marketing they’ve invested in includes public relations, videos, campaigns, ads, direct mailers, digital ads, email blasts, media costs, and more.
Marketing is an investment, but in real estate, it’s one that is limitless in potential and necessary to stay afloat.
Keenability is a full-service, boutique marketing agency that specializes in the real estate industry. We’ve transformed and repositioned brands, and create unique, revitalized solutions to each and every issue your company faces. We’re a talented group of writers, designers, creatives, and dreamers that put our expertise to work for you. Sound exciting? Let’s meet.