Brokers: Obsess on ROI

ROI is something we all talk about in business. It's the tell-tale signal that your efforts are either working or they're not. While it sounds easy enough – test, measure, tweak your campaigns – the problem in real estate is that most brokers aren't doing it. Many don’t even know where to start.

Brokers: It's time to seriously ask yourselves, do you really know your return on investment for each and every dollar you spend on technology, lead generation and conversion? In a time when business is scarce, you can no longer ignore this key component. In fact, you should rely on these measurements now more than ever.

Three things to consider today:

You've paid someone to build your Web site, but is your site capturing any leads? Is it delivering any value to you at the end of the day? Are you closing business directly due to your Web site's efforts? How can you know for sure?

Are you paying to publish your listings or send feeds to other Web sites? If so, do you know exactly what you are paying, whether this exposure is converting to closed business and what the price per closed transaction is?

Are all your eggs in one basket? If you're still using print, you probably see this as a big expense. Do you know whether this cost is returning anything to you? If you pulled all your advertising at once, would it make a difference to the amount of business you have coming in? Try it.

Your business depends on you mastering calculations like this. It is important to analyze the source of every lead that comes your way, and it's also not that difficult. Here's how to start:

Go to your Web site provider and get a full report on where all your traffic is coming from. You have to see for yourself whether it's worth it to continue paying third-party publishers and nothing speaks louder than cold, hard facts.

Upload listings feeds to a variety of sites in order to diversify your potential sources of consumer leads. Analyze each feed individually and in relation to all feeds, then rank them according to which are sending you traffic and which are not. Pull your feeds from any place that does not generate traffic or pales in comparison to your top destinations.

A radical, yet highly effective approach to analyzing ROI is to pull all ads and feeds from every place for two months. This will open your eyes to what is working and what is not.

If no one in your office can produce a simple spreadsheet that shows a direct line of where every closed transaction came from, then you aren't properly tracking your ROI.

And if you’re not tracking ROI, well, you can be certain you’re wasting money.