I guess is Alec at four and a half the question I get the most these days is how much a property management does marketing costs and how much do I need to spend to get the properties. I need to get to the goal I have. So we’re going to dive right in there. and I’m going to actually help you plan your 2017 marketing budget and help you execute it as well we got to start with it clear first of all a clear identification of our target.
Now if you’re looking for property management contract in recurring revenue for a single-family house your contract lifetime customer value equals about five thousand-plus right?? So all your management fees all your lease up these times you know three four years on average the client will stay with you.
You’re looking to get a significant revenue stream from this customer $5,000 or more now if you sell real estate or you have a maintenance business that basically increases your lifetime customer value but that’s if you have those additional business units now. Once you establish what your average contract value is the next thing to do is to say okay how many new accounts do I want for the next 12 months I mean that you should have in writing in “your mind in your sales people’s mind”.
You know property management business managers mind you know I 100 new properties over the next 12 months I want a thousand new properties I just wondered 50 I 120 whatever that number is you settle on this number and you go from there okay. Now once you have the number of properties to basically need to figure out amount of dollars you need to spend to acquire that customer. This is a basic kind of unit economics that a lot of startup Organizations work on but property management is very similar because it’s a recurring revenue so your unit economics need to work out how much are you spending to acquire this revenue stream. How much money you willing to spend to get this.
Now first you before you determine this number you got to understand where you are right for example Phoenix is very competitive and it’s incredibly expensive to acquire a customer in Phoenix but in Albuquerque it’s incredibly inexpensive. Then Portman is somewhere in between and then Atlanta is expensive so you need to know where you are and actually wrote an article a few months ago on the average acquisition prices we’re going to link it up in the article so now you know about how much you need to spend in your location.
The second factor to figure out how much you need to spend is your competition?? how aggressive are they what are they willing to spend are their franchises coming in to your location and spending left and right or is it pretty quiet. So once you figure this out I’m going to just say on average let’s assume you decide to spend 300 dollars per property to acquire this right now.
Remember the hundred properties you want next 12 months okay times that 300 you’re looking at $30,000 a year marketing budget okay now this is for more or less a start-up company some of the established companies will already have the referral business coming in and so that some of this new business equities will be supplemented by existing business referrals.
So that’s good that’s fine but we’re going to assume your new company right you want 100 properties in 12 months well your marketing budget needs to be thirty thousand. Right??
Once you have that established how you split that end deploy okay our recommendation 85% digital 15% local. What I mean by local is sometimes snail mail works right sometimes participating in local associations Chamber of Commerce events things like that. You need to have boots on the ground you need to spend some time with your local associations but most of your business will be done on the Internet okay so 85% needs to be allocated to the internet spend now when you have this fifty eighty five percent you’ve got to think of this. Okay??
How much money am I going to spend only organic presence and how much money I’m going to spend on the pay-per-click or paper lead let me explain organic? Meaning what your website design we design development SEO stuff like that your reputation right and the content the videos the articles stuff like this right the pay-per-click or pay per lead whether you do all property management. What you do in manage my property calm or you doing your own pay-per-click or you whatever right that is you buy leads there’s no longevity there’s no long-term investment for your company.
This is business in the door down so we recommend a 50/50 split between the two Okay?? so you split your digital marketing 50% organic fifty percent digital excuse me fifty percent organic 50 percent pay-per-click PPC all right?? Now for all of this to work now and people say well can you guarantee results??
My answer is: Yes
If you approach it from the bottom up right and a sign up appropriate budget and be realistic about your expectations, Yes there’s you almost guaranteed to get where you want to be. Now there’s some this couple caveats number one your sales process this is where most companies we see fail there’s no consistent sales process there is no dedicated sales person and their phone calls each call can be. You know that much money and it goes unanswered. He goes to voicemails and people do not pay attention to the leads or do not give them the right amount of attention.
So that’s critical okay?? Your sales process you might as well not invest in marketing unless you have a sales process defined. I’m just going to be blunt about even though I’m a marketing company don’t spend money with me until you have your sales figured out. Okay?? But if you can’t close the deals nobody can help you might as well just save the money.
Next thing the service the systems and the software okay most of our customers are really good at this but its wonder we emphasize this. Almost the property managers I know not what members are really good at these three service systems software a lot of them failed the sales process. Zip that up and give me a call if you have any questions this has been pretty extensive
I appreciate your time and if you have any specific questions always available thank you for Reading my article.