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Featured In: Inmobilia Magazine, PR-Newswire, and more.
By Chad Smalley, GMG360 Inc.
Date: June 2nd, 2008

Latin America Real Estate Professionals…….What You Don’t Know About Your Sales and Marketing Can Kill You

Here is a Question for all Real Estate Developers and Brokers Operating In Latin America…

What is your lead acquisition cost?

If you know how much you spend on marketing and advertising per lead, pat yourself on the back. If the number is $70 or less, you are doing a great job. If you don’t know how much you spend on marketing and advertising per lead, or if you are spending more than $70, then you may be in big trouble.

2008 is beginning of a new era for real estate brokers and developers. We have become accustomed to easy sales from an abundance of clients chasing us to invest in Panama, but five years into the boom cycle, the easy money has already been made, and from now on there will be more competition and fewer clients.

And the clients are becoming more demanding. Our clients now are home buyers, not speculators who never intend to see the finished product. They see the web and magazines full of ads and they know that they have choices, so they demand better service.

Developers around the world who have survived market cycles track their lead acquisition cost like a hawk. When they see it going up, they know the market is changing. In Panama right now, the number is going up. With the web and magazines full of ads it costs more to get noticed, so each client becomes more expensive and therefore more valuable.

As a rule of thumb, in a good market—like we’ve had the last few years in Panama—a developer or broker with a good marketing program will average $70 in marketing cost per lead, and convert one in every 20 into a signed contract, resulting in a marketing cost per sale of $2400 per unit.

In a tough market, more marketing dollars chase after fewer clients, so even developers and brokers with excellent marketing programs can see the cost of acquiring a lead reach far beyond $200. Developers whose marketing and sales program consists of throwing money at advertisements and waiting for a response may sell in a boom cycle, but when things get tough, they go broke.

The good news is that it is possible to thrive in a tough market if you put into place a smart, efficient sales and marketing program. Here are three key lessons from top developers and brokers around the world:

     1. Track which prospects come from which ads and ruthlessly cut out advertising spending that doesn’t produce qualified prospects.

     2. Return calls and emails from new prospects within 30 minutes. Numerous studies have shown that most buyers (foreign or local) chose the first agent to return their call. Remember, it cost you hundreds of dollars to get the phone to ring.

     3. Protect your client list at all costs. You have spent many thousands of dollars getting those clients into your list. If you keep it in MS Excel or, worse, on individual sales agent’s Outlook, you are one former employee away from giving your competitor your most valuable asset.

These days, the world’s best developers and brokers use a customer relationship management (CRM) database that allows them to track the sources of leads; sales agent’s response times and protect their client information. If you have not already implemented a CRM system, this is the time to do so.

At GMG360 our mission is to make our broker and developer clients more profitable, professional and efficient. We provide affordable, secure real estate tools and training.