How much do successful property managers spend on marketing?

How Much Do Successful Property Managers Spend on Marketing?

How much do successful property managers spend on marketing?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?

Grow Property Management Business

Alex Osenenko

About Alex Osenenko

Alex’s professional mission in life is to help small businesses grow and thrive. Alex is the President and CEO of Fourandhalf.com and a Co-Founder of the PM Grow, Inc. His business philosophy is simple: Happy Customers are created by Happy Employees, which results in Happy Shareholders. Alex's deep commitment to entrepreneurship and improving the lives of small business owners everywhere empower him to host “The Property Management Show” bi-weekly Podcast and speak internationally on the subjects of Growth, Marketing, Sales, and Entrepreneurship.

2 Comments

  • Avatar for Alex Osenenko Henry says:

    Did you get any data on lead generation spending? Your summary was very informative and should help us all development marketing best practices.

    Thanks.
    Henry, AllPropertymanagement.com

    • Avatar for Alex Osenenko Alex Osenenko says:

      Hi Henry, good point. I suppose Lead Generation portion would be a part of the Pay-Per-Click segment of the total marketing budget split we recommended. We did not ask for the specific marketing channel spend data. The marketing budget number pertains to the new owner acquisition dollars only.

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How we got these numbers

• Annual Customer Value (8% of average rent multiplied by 12)
• Customer Lifetime Value (4 multiplied by ACV)
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• Estimated Lifetime Profit (at 20% of LCV)
• Estimated Portfolio Value Upon Sale (1.2 times ACV)

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Alex Osenenko
President and CEO

Alex’s professional mission in life is to help small businesses grow and thrive. He is the President and CEO of Fourandhalf.com and is serving his 5th year on the Board of Directors for CALNARPM.

After spending 9 years in the trenches with his property management clients, Alex draws on his experience to host “The Property Management Show” Podcast and co-authors a weekly Property Management Blog on Fourandhalf.com. Alex has extensive experience speaking for various NARPM events at the local, state, regional and national level.

Alex is a graduate of San Francisco State University with an Electronic Commerce Systems Degree. His business philosophy is simple: Happy Customers are created by Happy Employees, which results in Happy Shareholders. Alex serves on the Board of Directors of CALNARPM (California Chapter of National Association of Residential Property Managers) and hosts a Podcast “The Property Management Show“, available on iTunes.

 

John Bykowski
Chief Operating Officer

After graduating from the University of Michigan with a film degree, John proceeded to do everything but. During his career, John has specialized in operations and has developed processes for small companies in diverse industries, such as bleeding-edge marketing technology, social networking, trade shows and exhibitions, and cloud software. John and Alex had worked together previously, and when he needed someone to help take Fourandhalf to the next level and beyond, Alex brought in John as his first employee, and later, business partner.

In addition, now that he’s using his film school know-how to help property managers look their best in their blogs, his mom no longer feels his degree was a complete waste of time.

Danny Morris
Director of Account Management

Born in Australia and growing up in Israel, Danny has spent a lot of time traveling the world between those two places. After completing his military service in Israel, Danny began following his biggest passion, writing, which he discovered while backpacking South America and publishing his first book.

When it was time to unpack, he returned to Australia to complete his Journalism studies amongst the beaches of sunny Perth. Danny is a huge online fan and after working in a number of related jobs, he finally gets to combine his two favorite things, working with media and people.

Marina Osenenko
Product Manager

Marina draws upon her real estate, business operations and customer service expertise for Fourandhalf. Her favorite part of being with Fourandhalf is the opportunity she has to really get to know our clients, build professional customer relationships and truly be part of a team that assists in their success.

Her time away from work is happily spent watching her children grow up and attempting to keep up with them! Any spare moments beyond nurturing her children are filled with hiking, spending time with friends, exploring the Bay Area and squeezing in a non G-rated movie every now and then.

Marie Liamzon
Product and Marketing Manager

Before joining Fourandhalf, Marie worked for one of the largest banks in the world. She took on different roles, but couldn’t find what she was looking for. She pursued a variety of side projects until she finally decided it was time for a career change.

Marie is very passionate about helping people and learning new things. In her spare time, you might catch her exploring new places and taking far too many pictures.

Kyle McLean
Customer Success

Born in San Diego County, Kyle McLean has since migrated to the Oakland woods. A fan of tall trees and tall tales, he holds a bachelor’s degree from the creative writing program at the University of California, Riverside and is a licensed California Certified Shorthand Reporter.

After a few years as a freelance court reporter, Kyle has joined Fourandhalf for an opportunity in sales and digital marketing. In addition to reading and writing, his hobbies and interests include gardening, hiking, soccer, coffee brewing, and craft beers.

Karen Wyle
Account Management

Originally from the Philadelphia area, Karen moved eight times in seventeen years all over the East Coast and to the Midwest before settling here in Northern California six years ago. She is an alumna of Brandeis University with a BA in American Studies and earned a MBA in Marketing Management from Indiana University in Bloomington. Karen’s business career has been well-rounded, with experience including advertising, direct marketing, corporate retail, product management, new product development, and new customer generation. Beyond an office setting, she has been thrilled to volunteer her time giving back to the community with KPMG’s Family for Literacy, at her daughter’s school, and as a Girl Scout Troop Leader. Karen enjoys music, good food, traveling to new places, completing jigsaw puzzles, meeting people and making connections.

Karen became a part of Fourandhalf’s Account Management team in 2016, relaunching her marketing management career after a pause to raise her family. She is excited to rejoin the business world and to work with such a strong marketing management team.

Paige DeRuyter
Account Management

Paige graduated from Chico State University with a degree in Journalism. Her favorite part of working at Fourandhalf is helping clients create and produce educational blog content to grow their business. She is an avid sushi enthusiast who enjoys riding her bike and watching college football and in her free time.

Nissim Boozaglo
Web Hosting Support

After working as a Radioshack store manager, Nissim decided to change his career path and pursue his passion for music production by getting his B.A.S. from Expression College for the Digital Arts. Nissim has a beautiful 8-year-old girl and loves cooking delicious homemade food and going camping with her! At Fourandhalf, Nissim is responsible for the implementation of the clients’ Landing Pages and Google Adwords campaigns.

Theresa Barnes
Campaign Director

Theresa Barnes was born and raised in the Bay Area and graduated with her Bachelors Degree in Communications Studies at San Francisco State University. She worked in aviation at a private FBO for 3 years, and other industries, before joining the Fourandhalf team. She finds a balance between being a young mother, work, and living a healthy lifestyle outside of work by staying as active as possible. She is dedicated to customer satisfaction and having a great work ethic.

Brittany Stephens
Campaign Director

Brittany recently moved to the Bay area after graduating from California State University Chico with a degree in Business Marketing. She is known for her excellent communication, customer service skills, and shameless nerdyness. Her passions include: music, tabasco, Lord of the Rings, and the Golden State Warriors.

Logan Jones
Business Development

After graduating from CSU Chico with a Degree in Business Marketing, Logan moved back to the East Bay and pursued a career in sales. With an attention to detail and a relentless drive, he strives to improve himself and his passions each day. When not at work Logan enjoys playing guitar and writing songs, and occasionally performing around the Bay Area. He is an avid sports fan keeping up with everything SF Giants, 49ers, Cal Bears, and Golden State Warriors.

Hope Lumbley
Account Management

Hope recently moved to the Bay Area after graduating from Chico State University with a degree in Journalism. She is coffee crazed, dog obsessed and hopes to visit all National Parks. One of the greatest times in her life was when she lived abroad in Costa Rica and hopes to travel more of Central America in the future. She feels blessed to work for a company who supports her love for travel and the need to learn more about what the world has to offer.

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