Marketing. That old chestnut. The complicated web of different portals, social media channels and other online advertising opportunities. But do you really know which channel is best for you? You know you’re spending slightly more on this portal, but that’s ok because you get loads of renters from there. Is it really ok? It’s time you took control and got into the detail of what these channels are actually providing you with, and at what cost.
If only there was a simple metric you could monitor over time… an easy way to measure the success of your different marketing channels. Well guess what, there is! And it’s called cost per lead (CPL) which, in a nutshell, shows you the real cost to the business of each lead you get (renter enquiries), from each channel 💪
So, if you want to become a marketing hero and impress your colleagues, read on as we discuss CPL and how it helps your letting agency go all the way to the top.
So What is Cost Per Lead? 🤷♀️
CPL is the total amount that you spend on a marketing channel, divided by the number of leads you generate. It helps you to understand better just how much you are paying for Sebastien’s enquiry for that two-bed maisonette in Forest Hill or Sarah’s request for a viewing of the one-bed pied a Terre in Chelsea.
It's important that you measure results over a fixed time period to get the most out of CPL metrics. We’d recommend looking at it on a monthly basis, so the amount you spent in July, divided by the number of leads you generated in July. This helps to give a fair reading of the costs, and allows you to continue monitoring the progress over time. The aim really, is to optimise all the channels, and reduce the CPL over time so your business is more profitable. If you’re generating a huge volume of leads, you could consider looking at it weekly, and similarly, if you’re generating only a couple of leads per month, perhaps consider measuring quarterly.
Quick maths time. Let’s say that you spent £2,000 on a month’s subscription to Rightmove, and received 10 renter enquiries from Rightmove. The cost per lead would equate to £200.
What You Need to Calculate the Cost Per Lead 💸
To keep on top of your cost per lead, you need to know a few things.
- The amount spent per channel (usually a monthly subscription)
- Information about which leads came from which channel, so you can count them. This can usually be done in your CRM.
- Information about what happened with those leads, did they do a viewing, did they go on to rent a property with you? (We’ll talk more about actual deals later)
The chances are that you’ll be advertising your properties on lots of different channels, which will all need tracking. These include, but are not limited to, your own website, PPC/adwords campaigns (now called Google Ads), Rightmove, Zoopla, OnTheMarket, Movebubble, Gumtree, Facebook and print advertising, which can be harder to track, but not impossible.
Now I Know the Deets, How Will it Help Me? 🤓
Once you find out which channel is the most cost-effective for your agency, you can use the information to fine-tune your marketing strategy, and do two key things:
- Move your budget over to the better performing channels (more leads for your money)
- Negotiate with sales people when they come and see you, to increase your monthly prices
With restrictions coming in like the Draft Tenant’s Fee Bill, it’s vital that your get on the front foot. Maximise the channels that are generating good results and dial down on the ones that are costing more than they are providing.
Number Crunching 💯
So have you found the channel with the cheapest cost per lead? Great! Is that the end of it? Nope!
It’s all very well getting loads of cheap leads, but there is one other key metric that will make sure you don’t get distracted. And that’s cost per deal (CPD). You can calculate it in a similar way, by taking the total amount spent on that channel and divide it by the number of deals you closed from renters who came from that channel.
Maybe you spent £2,000 on Rightmove last month, and let two properties from those rental enquiries, which means that your CPD was £1,000 that month. If you’re not doing loads of rentals each month, try looking at the CPD on a quarterly basis. The main point is to get an understanding of how the different channels compare, by assessing how many leads from that channel actually converted into deals.
Why is this so important? Well, here’s an example below of why you should analyse both numbers.
You see in this example that on a CPL basis, Rightmove looks more expensive than Zoopla, but actually on a CPD basis, Rightmove is giving you the best value. In this instance, CPL alone could have mislead you to spending more with Zoopla, but you actually may have gotten fewer deals, at a much higher CPD. Your agents would have spent more time wading through the enquiries (this costs you money!), and done fewer, more expensive deals overall.
Moral of the story… CPL alone isn’t enough to make the tough decisions. You still with us?
Analyse, then optimise ✅
Examine each stage of your funnel across the different channels, and see where the most significant improvements can be made. Here are the most obvious optimisations you could make:
- Reduce costs/spend on the channels that are more expensive on a CPL and CPD basis
- Move some of the budget you saved to the other channels that are performing better
- Not many of your leads are converting to deals? Perhaps you need to invest in some further training for your staff. Firstly, to make sure each lead is handled consistently, and secondly to make sure you’re doing everything you can to help each renter find a home… with you! Have a read of this article to improve customer service efforts in your agency
- Need more leads to start with? Perhaps there’s more you can do to optimise your property listings and attract more enquiries
- Are you capturing all the leads? Our data shows that over 50% of renter leads happen outside your office hours. You’ll need a tool to make sure that leads aren’t wasted, and this is one of the major benefits of getting on the Movebubble app. Your leads come through via a chat messenger straight to your phone, so you can respond at any time of the day if you want to, and it will maximise the chance that the renter decides to rent a new home… with you!
More Than Just Renters? 🏡
While renter enquiries are your bread and butter, it’s good to look at any additional value that you can get from each channel. Maybe enquiries are slow, but you’ve had interest from landlords, which offers significant business value. You can look at these in a similar way, to understand which channel provides you with better quality landlord enquiries.
It may even be that you get CVs from people that want to work for your agency. While that might not be what you set out to achieve, it could save on recruitment costs later on and provide another avenue for hiring new staff members.
CPL The Movebubble Way 🙌
With features like instant chat and a one-stop channel to communicate with renters, Movebubble brings leads directly to your pocket. Get in touch today to find out what your Cost Per Lead would be with Movebubble, and how that compares to your other channels!