How Much Should a Real Estate Agent Spend on Marketing?
As a real estate agent, the amount you should spend on marketing will depend entirely on your income and the resources you have at your disposal. Most agents suggest you spend about 10% of your commission income on marketing. But if you’re just getting started, that might not amount to much. New agents may struggle to find $1,000 or more to spend.
Meanwhile, top agents who face heavy competition may wish to spend anywhere from 15% to 20% of their income in marketing. Some may even wish to spend 30% in a quarter or a year if they want to grow. While most businesses only need to spend about 5% to bring in new leads, the real estate industry is different.
Agents need to brand themselves and focus on their own personal marketing campaigns to succeed. Some brokerages provide their agents with advertising or a page on their website, but this isn’t usually enough.
People often say, “you have to spend money to make money,” but there’s no reason a new agent can’t boost their success with a small-scale marketing budget. Here’s how to start.
Find the Marketing Budget That Works for You
Before you spend a dime on pay-per-click ads or a flashy new website, find out exactly how much you’re working with. You probably already have a personal budget. Determining how much you should spend on marketing is simply a matter of allocating a portion of your income within that budget.
Some things to consider are:
- Your average commission on sales
- The average final sales price of the homes you sell
- The number of transactions you conduct in each quarter and year
If you had a particularly good year last year, it isn’t necessarily indicative of future trends (but cross your fingers).
Now, take out a percentage of your income to be allocated to marketing.
This can be a bit daunting. Inevitably, you’re going to have to watch the number in the income bracket of your spreadsheet diminish. It might be tempting to just keep your income, but keep in mind that marketing is an investment. You don’t want to find yourself months from now with few prospects because you didn’t dive into marketing.
Try to balance the marketing budget you wish you had with the amount you’re willing to spend. Find a happy medium, and you’ll have a solid number to work with. You may wish to determine your monthly, quarterly, or yearly marketing budget depending on how often you want to reassess your marketing strategy.
Create Your Marketing Strategy
Once you have a number, you can begin breaking out how you’ll spend your budget. Below, you’ll see a quarterly marketing budget for an agent or team that has $23,685 to spend each quarter. If you’re working with much less, don’t worry. This is just an example:
Don’t be afraid to get more granular than this with your budget. For example, the “Online” category could be broken out into all of your separate paid advertising campaigns. The “Web” category could be the cost of maintaining your website and paying for digital services.
Digital marketing like organic social media engagement, content marketing, and a website are relatively inexpensive if you look in the right places. There are also plenty of low-cost advertising options available online. Pay-per-click marketing campaigns can be targeted by region and behavioral demographic, so you get the most out of your investment.
Another option is to invest in an all-in-one real estate agent CRM that has many of these things included, like a website and a social media management platform. This will save you time and money you’d normally spend on hiring a third-party web developer or relying on a marketing contractor. This type of software can grant you access to multiple marketing tools that would normally be out of reach on a tight budget.
Real Estate Agent Marketing That Works
And don’t forget the old-fashioned, tried-and-true methods of marketing like networking and handing out business cards. Your business is all about building relationships with people, after all. You can use digital marketing to capture more leads, but hitting the pavement is still a cheap and effective way to get your name out there.
Ensure part of your marketing budget is set aside for events, printing expenses, and travel. If you’re just getting started with marketing, don’t be deterred if you don’t see immediate results. Sometimes, it can take time to adjust your strategy to suit your needs. Long-game tactics like blogging may not bear fruit immediately, but they can turn you into a powerhouse online if you keep at it.
Looking for a Complete Real Estate Marketing & Sales Solution?
Start For Free Watch Demo
Try Our Free Real Estate Business Planning Tools
Business Calculator
FAQs
In a blog entitled “HOW MUCH SHOULD A REAL ESTATE AGENT SPEND ON MARKETING?”, From ZipperAgent, is was suggested that 15% of your commission income should be reserved for marketing. Tom Ferry suggests that, “No more than 10% of your anticipated commission income should be spent on marketing.”.
What is a good marketing budget for a realtor? ›
Most agents recommend allocating 10% of your commission money to marketing. However, that may not be enough if you're beginning to start.
What is a reasonable amount to spend on marketing? ›
The 5% Rule
As you'll see below, the ideal budget depends on your current marketing foundations. BUT, as a general rule based on the latest research, expert opinions and years of marketing experience, we say: You should spend 2–5% of your sales revenue on marketing.
How much should you spend on a marketing agency? ›
How much does a marketing agency cost? You'll likely need to invest anywhere from $500 to $10,000 and up per month into a marketing agency to see ROI. But you'll want to get clear on your marketing goals first.
How much should I pay for a marketing campaign? ›
How much should you budget for marketing? Companies often spend 7-10% of their overall revenue on marketing. This is just a general rule of thumb, however, and each company should create a strategy tailored to its unique needs.
What is the 80 20 rule for realtors? ›
In the realm of real estate investment, the 80/20 rule, or Pareto Principle, is a potent tool for maximizing returns. It posits that a small fraction of actions—typically around 20%—drives a disproportionately large portion of results, often around 80%.
What is a realistic marketing budget? ›
In the simplest terms, your marketing budget should be a percentage of your revenue. A common rule of thumb is that B2B companies should spend between 2 and 5% of their revenue on marketing. For B2C companies, the proportion is often higher—between 5 and 10%.
What is the 20 30 50 rule marketing? ›
It's important to connect with your followers using a healthy balance of content that engages, informs, and promotes your products. In general, you'll want to aim for 50% of your posts to engage, 30% to inform, and 20% to promote.
What is the rule of thumb for marketing budget? ›
7% Rule of thumb for marketing budgets
First, you need to spend a percentage of your sales or, having a more academic term, your gross revenue on marketing and advertising. The magic number is around 7%. Some experts say that the minimum is 5% of your total Income.
What is a typical marketing expense? ›
A marketing expense is the amount of money spent in promoting, advertising, or marketing a business and its products, services, or solutions. These expenses are costs that directly contribute to the performance of marketing activities and overall efforts.
According to the Small Business Administration (SBA), on average, businesses spend about 1.08% of revenue on advertising, with variations by industry[1]. They also say that business-to-consumer (B2C) companies usually allocate more: 9.6% for product companies. 11.8% for services.
How to decide marketing budget? ›
Here are 3 steps you can follow to determine your marketing budget based on your business's revenue.
- Determine Your Revenue Target. You start by setting your revenue target. ...
- Allocate a Percentage of Your Revenue Goal. ...
- Determine the Marketing Strategies That Work Best for Your Business.
On average, agencies charge between 10% and 20% of the total ad spend as their management fee.
How much do agencies charge for a campaign? ›
Digital marketing agency cost per month. Marketing agency costs range anywhere from $900 to $20,000 per month on average. Digital marketing agency costs will vary based on numerous factors, but it helps to know the averages of each service before you reach out.
What is the average marketing expense for a small business? ›
Many small businesses aim to spend 2% to 5% of their total revenue on marketing. However, it depends on how much you're willing to spend.
How much should marketing be paid? ›
Marketing Budget as a Percentage of Revenue
As a general rule of thumb, B2B companies should spend between 2-5% of their revenue on marketing, and B2C companies sit a little higher at 5-10%.
What is a realistic budget for advertising? ›
According to the Small Business Administration (SBA), on average, businesses spend about 1.08% of revenue on advertising, with variations by industry[1]. They also say that business-to-consumer (B2C) companies usually allocate more: 9.6% for product companies. 11.8% for services.
What is the average marketing budget to revenue? ›
Your marketing budget needs anywhere from 5-20% of your revenue to thrive. Generally, 5-10% is enough to sustain, but you'll need 11-20% into data-driven marketing campaigns to grow.
What is the average marketing budget for a law firm? ›
On average, lawyers and law firms spend between $5,000 to $50,000 a month for various digital marketing channels like Web Design, SEO, PPC, and social media marketing.
What is a reasonable advertising budget for a small business? ›
It depends on revenue. Many small businesses aim to spend 2% to 5% of their total revenue on marketing. However, it depends on how much you're willing to spend. In the last year, marketers reported a 10.4% growth in marketing spending, which is double compared to a year ago.
