Why Every Agent Needs to Understand ROI

Why Every Agent Needs to Understand ROI

If you’ve been playing in the real estate game for awhile, there’s no doubt you’ve dropped the term ROI from time to time.

Let’s face it… It’s a great way to nudge Mr-and-Mrs-Investor over the line when they’re sitting on the fence over that great two-bedder you know is perfect for their portfolio.

But did you know that ROI is as integral to your business as an agent as it is to the investors you are dealing with on a weekly basis? The type of ROI I speak of has nothing to do with bricks and mortar and everything to do with getting the best bang for your buck and turning your business into a profit machine.

It all comes down to marketing.

What is ROI in marketing?

Just as investors weigh up the probability of a profitable return on an apartment, you can use the same calculations to judge the investments you make in your marketing strategies. Whether it’s the money you spend printing brochures or the cost of designing banners to display out the front of your open home, every effort you make should result in dollars. There’s a number of strategies that can work for you, you’ve just got to decide which one is going to generate the most profit with the least amount of effort.

How do I maximise profits?

Email marketing is an absolute must. According to recent studies, the median email marketing ROI is 122%, which is four times higher than any other digital marketing channel. If you’re not making the most of the opportunities it presents, your competitors will be and you’ll be missing out on potential listings. It’s that simple.

Let’s take a look at this real world example. Agent Sam recently invested $500 a month on an email marketing software program for his office. He’s had a pretty good start and the software has landed him 5 appraisal requests that he wouldn’t have received without its help. As we know, approximately 25% of appraisal requests result in listings and Agent Sam has easily hit that mark. He’s now got two listings under his belt. Both properties are set to sell for around  $600,000, which means Agent Sam is about to make a profit of $24,000! He’s over the moon but how did his ROI fair? Let’s crunch the numbers.

Agent Sam invested $500 into his software resulting in $24,000 commission. To work out his ROI you simply divide the profit he made by the investment he put in. Agent Sam scored a ROI of 480%.

The lesson here is don’t fall into the trap of thinking of software as an overhead or an ‘expense’.

At the end of the day, good ROI practice comes down to smart spending. Allocate your budget correctly to ensure that you squeeze the most out of each dollar.

Your Customer is Numero Uno

What you want and what your customers wants aren’t always going to line up. Design your email communications around content that adds value. This means staying relevant and keeping things as personalised as possible. Software like ActivePipe tailors your emails automatically so that your customers never feel like they’re part of a spray campaign. As top ranking agent Glen Coutinho puts it:

“ActivePipe puts my face in front of 5000 people and most of them think that I’ve written the emails individually, so it really works in my favour.”

Know Your Metrics

Data is everything. Use it to dig deep and discover what is and isn’t working for your digital marketing campaigns. The beauty of digital is that you can track your leads from origin to sale, which means you can directly see how your campaigns have translated into listings. Once again, investing in software that does the hard work for you is the simplest and most effective way of documenting these metrics. ActivePipe will not only tell you who’s interacting with your emails but will foster every stage of your relationship with these prospects.


The likelihood that you’ll stumble across the perfect marketing strategy straight off the bat is slim. Perfection takes practice and this means engaging AB testing and always being on the lookout for something new that will excite your contacts. They’re probably getting emails from a few different agents, so it’s worth trying to do something that stands out such as a competition or a personalised OFI invitation that makes them feel special.

Automation is key

To keep the labour costs low and save yourself from a mountain of screen time, it’s time to think about email automation. ActivePipe makes the process simple by allowing you to build emails that deploy regularly at a predetermined time or with a trigger such as a clicked link. Companies that use marketing automation technologies report a 53% increase in their lead generation and sales conversions. Why wouldn’t you want to give that a go?

The verdict?

The marketing software you choose can have a colossal impact on your operational efficiency and ability to reach your contacts in a meaningful way. ActivePipe not only nurtures your database but also generates leads by identifying your high value contacts, so you can get the ultimate return on your investment.

It’s a no-brainer really.

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Clarke Stewart
Responsible for the implementation and support of ActivePipe’s promotional efforts, Clarke is constantly exposed to all facets of the business, giving him a unique understanding of what goes into creating and utilising industry leading marketing technology. When he’s not busy getting ActivePipe’s name out into the world, you’ll find him either shooting hoops or surfing somewhere along Victoria’s expansive coastline.