How Does Your Property Management Marketing Budget Compare to Your Peers?
Here at Fourandhalf, our ever-curious minds never stop exploring. During one of these mental safaris, we asked ourselves: how much do successful property management companies spend on marketing to capture new owner contracts?
As we’re fortunate enough to have a family of exceptional property management clients, we sent out a simple questionnaire:
1. How much do you spend on marketing for new owner contracts?
2. How much of it do you spend online?
Within few days we received a response from every single client we surveyed. How cool is that? Every client we surveyed runs a successful, growing, residential property management company with between 200 and 1000 doors.
Survey Results for New Owner Marketing Spending:
Size of the Average Property Management Company surveyed: 514 Doors
Average Monthly Marketing: $1,154.50
Average Monthly Marketing – Online Spend: $1023.71
Average Monthly Marketing – Offline Spend: $130.79
Average Monthly Marketing Spend Per Unit Managed: $2.24
If the average property management annual contract value is $1,600 (monthly commissions + lease up averaged over 2 years), that means our group of successful property managers are spending around 1.28% of their revenue on new business acquisition.
So What Is a Good New Owner Marketing Budget?
In general, most marketers settle on 3%-7% of revenue to maintain their current levels of awareness and visibility. However, the property management industry is far from average, right? On the one hand, you have lower margins, but on the other, client retention rates are beyond the dreams of lawyers, dentists and most other professionals.
It is fair to say that anything from 1%-2% of annual revenue should offer a sustained, measured and fairly predictable growth rate, as our survey shows.
However, those who are looking to grow aggressively, and young companies with smaller portfolios (and smaller annual revenues), 2%-5% of revenue should be your target number.
A Word of Caution
No matter how aggressively you’d like to grow, be careful with how you invest your marketing dollars. Unfortunately, Internet Marketing is one of the few remaining industries where the salesman still knows a lot more than you do. Sinking a large portion of your budget into the wrong kind of campaign can cost you and your business thousands, and potentially tens of thousands, of dollars in opportunities, once major search engines blacklist your site.
We’ve heard plenty of horror stories, and have spent lots of time untangling lingering issues for our new clients. Luckily, there are reputable vendors who focus their efforts on helping Property Management companies grow their businesses through the Internet. If you need an advice on who to hire, please contact Alex and he’ll be happy to recommend best-in-class vendors, even if Fourandhalf.com is unable to help in the specific marketing segment you are trying to launch or improve.
Recommended New Owner Marketing Budget Allocation
35% Content Marketing
This is the best thing you can do for your business in the long run. Google spends every waking moment on helping people find relevant content – why not create and serve excellent content for your targeted audience – new owners – and build a solid internet presence the right way, and have Google beat the path to your door?
20% Website Maintenance and Optimization
This includes maintaining/updating your website with proper location-based keywords, categories and tags, and acquiring QUALITY external links. We’d also include vacancy video optimization and other existing content optimization services into this section.
15% Social Media Maintenance and Posting
Keeping your Social Media accounts – Facebook, Google+, Google Places, Yelp, Yahoo, LinkedIn, etc., active and updated. As far as Social Media posting goes, either do it internally and take the payroll hit, or hire someone to keep your social properties humming with activity. One additional piece of advice here: Make sure you focus your content sharing strategy on your target audience: New Owners. Posting vacancies on your Facebook page is not a viable New Owner acquisition strategy.
30% Pay-Per-Click Campaigns
This includes both Google and Facebook pay-per-click campaigns. You should have a campaign set up and ready on both Google and Facebook, so you can turn on the lead generation faucet at any time. Pay-per-click is expensive, but effective, and the good news is that you can adjust your budget as other projects begin to produce results.
Wondering Why You Don’t See Reputation Management?
Simple. This is an internal function that everyone in your organization needs to commit to, and act on. If you’d like to spend a bit of your budget, as a one-time expense, we can help you set up a winning strategy.
This is our best advice on how to map out your New Owner Marketing budget. In other words, if we ran a property management company, this is precisely the spend allocation we’d shoot for. We feel this formula has a fair split between instant results and long term growth investment.
What do you think of our recommended allocation? Would you recommend any other effective New Owner Marketing avenues?