From many years managing Google Ads campaigns for agents here on the Costa del Sol, I’ve learned one thing: it’s a numbers game.
OK, come to think of it I’ve learned another thing: lead gen is not for everyone.
But this article is about the first lesson. Agents who get that it’s a numbers game are generally successful with it; agents who don’t, tend to blow a few thousand euros and stop it without achieving any sales.
The more you replace opinions with facts and figures, the more likely you are to make a success of it.
There is one massive hurdle for agents to overcome: in absence of other information, campaigns are measured on lead volume and cost.
It’s not until you get a sale that you have any clue if this sort of lead gen is right for your agency.
As the time from lead to sale can be several months, especially in second-home markets where we’re targeting foreign buyers, it can be very difficult to really know if those sales are going to come.
This attempts to add some intermediary indicators so you can track to see if things are heading in the right direction, even though you don’t have a sale.
I suggest these as standard benchmarks (plain English for KPIs) to measure progress.
Although these averages are real, they are just benchmarks to work on as a general guide, but the important part is not how the actuals are compared to these but more about (a) knowing what they are i.e. tracking them (b) being able to measure where things are getting worse or improving and associate these with specific actions taken.
How to keep track of them: this is often easier said than done.
It can be as sophisticated as combining some automation and custom fields in your CRM to a simple Google Sheet with each of these steps as a column, depending on your setup.
- KPI #1 – Lead aka MQL (Marketing Qualified Leads) e.g. x100
- KPI #2 – Engaged (contact made) 40% of leads e.g. x40
- KPI #3 – Qualified aka SQL (Sales Qualified Lead) Deal – Serious interest “opportunity” 20% of leads e.g. x20
- KPI #4 – Tours/Viewings 10% of leads e.g. x10
- KPI #5 – Sales – Deposit/Deal won %1 of leads
So your conversion rate of lead to sale is 1%, ie it took 100 leads to get 1 sale.
You can then calculate your CPA – Cost Per Acquisition (Sale) cost of leads divided by the number of sales
This lead gen process involves 3 elements
- How the lead is generated
- What tech is being used so nothing is lost in transit
- How good the follow-up process -is think multichannel and appropriate speed
You can nearly always improve the conversion rate at no extra cost by improving the follow-up process. But to know where to make these improvements you need to start with a benchmark figure, ie how are we doing at the moment?
How can we improve who many engage? How can we better qualify them? How can we secure more viewings?
Make a change, see if it improves. But you need to know the percentages of these KPIs to start with, so you can measure if it works.
Taking it another stage further
An while you’re at it, a super useful metric to track is how long it took from lead to sale. If you’re feeling fancy you can record the date for each KPIs and this will eventually give you an aditional but super valuable metric related to pipeline velocity, ie how quickly leads move through your sales pipeline.
Why is this important?
For two reasons.
Firstly: cash flow. If you can predict when you’re likely to see sales you can calculate when you’re likely to see revenue.
Time is money, in real estate this is literally the case. If you can reduce how long it takes a lead to become a sale, the quicker you’ll see that revenue.