2021 was the best year for home sales in the U.S. since 2006, and competition remains fierce thanks to record inventory lows. The real estate market is once again white-hot in 2022, and there’s ample opportunity for agents to churn up some revenue.
After curating the perfect photo gallery for their latest listing and putting the finishing touches on the weekend’s open house, there’s one more thing realtors need to do to stand out from the competition: track their marketing metrics.
Metrics give you insight into how well your marketing is performing and — crucially — whether your marketing is translating into higher sales and revenue for your agency. Not every data point can give you that context, though, so it’s important to focus on the metrics that do. Here are seven real estate marketing metrics to help you determine if your marketing is effective at bringing in quality leads who are a good fit for the homes you’re showing.
1. Cost per lead (CPL)
Cost per lead is a metric that shows how much money you need to spend in order to bring in leads and generate interest in the homes you’re trying to sell.
**Why it matters: **When you know how much it costs to bring in leads, you’ll have a benchmark to use for your business. You can then try to lower your cost per lead by measuring the CPL of certain channels. If a certain channel (such as Facebook or organic search) has a lower CPL, focus more of your marketing efforts there, and you’ll lower your total CPL.
It helps to know your CPL so you can weigh future marketing efforts against it. Say you introduce a new ad campaign, and your CPL goes up. It now costs you more money to generate leads, meaning the campaign may not be worth it.
How to calculate CPL
Use this formula to calculate CPL:
Total amount spent on ad / number of leads generated = cost per lead
So, say you spend $500 on Facebook advertising, and you receive 50 new leads through form submissions. The formula would look like this:
$500 spent / 50 new leads generated = $10 cost per lead
2. Client acquisition cost (CAC)
Also called customer acquisition cost, CAC tells you how much it costs you to actually gain a new client. Similar to CPL, CAC gives you insight into how much money you need to spend to move someone past the lead stage and nurture them into a client.
Why it matters: It shows you how well you’re maximizing your budget, which is often limited as an individual realtor or small agency. In order to make a commission, you need clients who are listing properties with you. The lower your CAC, the larger your overall revenue margins will be, because it costs you less to bring on clients and make a return on your marketing investment.
How to calculate CAC
To calculate your CAC, use this formula:
Total amount spent / number of new clients gained = client acquisition cost
For instance, say you spent $2,000 on your marketing in one month, and you gained five new clients in that period. The calculation would look like this:
$2,000 spent / 5 new clients gained = $400 client acquisition cost
3. Showings per sale
This metric tells you how many showings or viewings you need to hold for a property, on average, before you make a sale.
Why it matters: Showings per sale helps you understand two things:
- If you’re effectively showing your properties.
- If you’re effectively targeting and qualifying buyers for your properties.
The second insight has major implications for your marketing efforts, since you want to confirm you’re targeting the right audience with your marketing. The lower the average showings per sale, the better. It shows that your leads and potential buyers are aligned with the types of properties you’re selling, your price points, and the locations you’re advertising.
How to calculate showings per sale
To calculate this metric, use this formula:
Total number of showings / total number of sales = showings per sale
For example, let’s say your real estate agency holds 60 showings in a one-month period and makes five sales. The formula would look like this:
60 showings / 5 sales = 12 showings per sale
4. Appointment-to-listing conversions
This is the percentage of appointments with potential sellers that convert into official listings. It’s important for realtors to track conversions through to actual income opportunities — from leads and prospects to sales and commissions.
**Why it matters: **With this metric, agents can set and hit a clear goal for appointments in order to reach their revenue goals for the month, quarter, or year. It provides a direct link between lead generation activities, appointments, and listings to measure success.
In your own marketing, track which channels and activities are the biggest drivers of appointments and high-quality leads, so you can double down on those efforts. You’ll keep increasing leads from those channels and keep your appointment-to-listing conversions high.
How to calculate appointment-to-listing conversions
Keller Williams’ Economic Model for real estate agents includes a calculation for appointment-to-listing conversions:
Number of listing agreements needed / total number of seller appointments needed = % appointment-to-listing conversion
For example, say that your agency needs 150 listing agreements in order to stay on track for your sales goals. You set a total of 200 seller appointments, and your conversion rate is 75%. You know you’re on track to meet your goals, but if the conversion rate fluctuates at all, you’ll need to adjust the number of appointments you set.
5. Click-through rate (CTR)
Your click-through rate (CTR) shows you how many people are actually interacting with your content on all digital channels — your website, social media ads, emails, and any other marketing content that features a link people can click.
Why it matters: CTR gives insight into engagement, compared to viewership, among your target audience. They prove that viewers of an email or social ad are taking action on your campaigns — they aren’t just reading and scrolling past.
CTR also indicates what’s working well. A specific type of content might resonate more closely with your audience, and they’ll be more likely to click through to a listing or even submit a form to set up an appointment. Compare CTRs to help identify messaging and tactics that generate more leads and appointments for your business.
For reference, helpful industry benchmark CTRs for real estate are 3.71% for paid search ads, 1.08% for display ads, and 1.8% for email.
How to calculate click-through rate
To calculate CTR, use this equation:
Number of clicks / number of times your content is viewed = CTR
For instance, if you sent an email to 1,000 people, 500 people opened it, and 20 people clicked on it, 500 is what you should use for the number of views. Here’s how it would look:
20 clicks / 500 views = 4% CTR
6. Lead conversion rate
This metric tells you the percentage of website visitors, social media followers, and audience members who convert into a lead for your real estate agency.
Why it matters: Lead conversion rate helps you determine that your top-of-funnel efforts are efficiently creating leads. When you know that these efforts are successful, you can book more appointments and turn them into bottom-of-funnel opportunities and revenue.
How to calculate lead conversion rate
Follow this calculation for lead conversion rate:
Total number of leads / total number of website visitors = lead conversion rate
If you had 2,000 website visitors and 100 leads, your formula would look like this:
100 leads / 2,000 website visitors = 5% lead conversion rate
7. Leads by source
Find out which marketing channels and activities are bringing in your highest-quality leads through lead attribution. This metric gives you insight into how leads find you and what’s causing them to take action.
**Why it matters: **With lead tracking, you can better understand what’s resonating with high-quality leads and invest more of your budget into those efforts and channels. This helps you lower your CPL, CAC, and increase your return on investment as you book more appointments with qualified leads.
How to calculate leads by source
Use a tool like CallRail’s Call Tracking or Form Tracking features to find out which channels, ads, and marketing activities are bringing leads to you. CallRail’s technology connects your audience’s online activity before they pick up the phone to call you. You’ll have all that info on hand, so you can automatically qualify or disqualify leads and get them listed faster. The tool can also track leads to offline ads, so you can measure exactly which marketing activities are bringing you qualified leads and listings.
Start a 14-day free trial of Form Tracking today.