Email Marketing Benchmarks for Real Estate
Ever wonder how your email blasts stack up. I stumbled across this article that reviews average open, click, bounce and abuse complaint rates by industry.
Mailchimp scanned over 272 million emails and their results are listed per industry here>>
MailChimp states: “These stats aren’t pulled from a survey of big giant corporations with million-dollar marketing budgets and dedicated email marketing teams. 70% of our customers are 1-10 employees, and they’re design-it-yourselfers. If you run a small organization, and you do your own email marketing, now you have an “apples to apples” comparison with others in your industry.”
Real Estate Averages:
Open Rate - 22.16%
Click Rate - 4.27%
Soft Bounces - 1.87%
Hard Bounces - 4.18%
Abuse Complaints - 0.07%
Unsubscribes - 0.30%
Would anyone like to share their email results? Leave a comment…anonymously if needed. I know how protective we builders can be 
New Math for Builders
There is a new formula for builders. Let’s look at some of the latest numbers:
84% - The percentage of your homebuyers who use the internet to research new homes
12.1 Weeks - The average time it takes for Internet buyers to purchase a home - double the amount from 2006
94% - The percentage of Internet buyers who expect a response in 4 Hours or Less
64% - The percentage of New Home Sales Executives who DO NOT FOLLOW UP with qualified buyers
$4.00 - The average price for a gallon of gas
All these numbers add up to a Huge Opportunity!
The home buyer pool has become very shallow and competition has increased for their business. Now, more than any other time in history, buyers are using the web to research their choices. Savvy buyers are being very strategic - narrowing down their choices of homes and communities - disqualifying as they go - using the Internet as their power tool to gather information. They are shopping almost twice as long before their first appointment to a model home. Throw into the mix current fuel costs, at $4 per gallon, families aren’t jumping in the Suburban for a leisurely drive from one new home community to the next.
As builders work their way through “the dip“, it is critical to invest in online marketing and take the time to set up a process to manage the leads they receive.
Potential customers are craving better on-demand information. They expect top notch customer service while they are shopping. The builder who shows them this courtesy in the beginning will come out ahead in the end.
Home builder marketing dollars and mindsets will need to shift to this shopping phase to capture the buyer sooner - instead of waiting for the “walk in”. It makes sense to go where the buyers are, and right now they are online, trying to determine if you are the right fit.
64% of Agents Don’t Follow Up - Say What!
"Whoever can be trusted with very little can also be trusted with much" Luke 16:10a
Builders - if we can’t be trusted with the traffic we have now, how can we be expected to handle it when it comes back?
Take a look at this at this new whitepaper just released by Red Tree Resultants and Qgenisys. They conducted actual on-site evaluations acting as motivated prospects to learn if there would be adequate follow up on the visit to try to persuade the prospect to become a purchaser and what builders and developers can do to improve their market share. What they found out:
- Despite spending millions of dollars to attract them…In only 36% of the visits did an agent bother to follow up with the prospect who visited the community and expressed immediate purchase interest.
- In only 14% of the cases did agents follow up with personalized information about the community that reflected anything they discussed with the prospect.
- Builder agents from the higher-priced homes/communities actually followed the prospect more aggressively than did the lower-priced homes/communities.
- Of all homes visited during our research, unless a prospect followed up with the builder, nearly 60% of all prospective sales would have been lost due to lack of follow up by the builder or the builder’s representative
- We estimate that up to 75% of builders’ emails, both from sales reps and marketing teams were caught by our researchers’ spam filters.
Their findings clearly show that after spending all those marketing dollars to get potential buyers into their homes, motivated buyers were largely ignored and received almost no relevant follow up from the builder’s site agent. On-site builder agents allowed prospects to walk out the door, but also allowed them to slip through their fingers with little relevant follow up…or in many cases ANY follow up after the visit.
The Conclusion - Builders who implement the changes we have recommended here will be better positioned than those that do not to take advantage of the inevitable turn around that will eventually come in the housing market.
Thanks to Brendan and his team for the timely and powerful info.
Contact:
Red Tree Marketing Resultants
Brendan Miller
(303) 741-2369
www.redtreeresults.com
Are you missing customers?
The California Association of Realtors recently conducted a survey of Internet Vs. Traditional Buyers. One of their findings revealed that 94% of “Internet” buyers expected a response within 4 hours or less in 2007, compared to 67% in 2006.
This has long been an important conversion factor when responding to your leads. It is critical that you respond within a timely fashion and it is now confirmed that your customers EXPECT it.
Here is how the numbers add up:
22% expected an immediate response
21% expected a response within 30 minutes
16% expected a response within 1 hour
17% expected a response within 2 hours
18% expected a response within 4 hours
6% expected a response within 1 business day
Compare the buyer’s expectations to the standard response rates by Realtors, less than 50% even respond to internet leads at all. The ones that do, it takes an average of 2 days.
How do you measure up? Are you meeting your customer’s expectations? Whether you receive a large volume of leads, or just a few, you must always focus on a timely (if not instantaneous) response to your prospects. This will give you a competitive edge against your competition.
New Home Buyer and Home Builder Survey
I wanted to add a post for the market study by the NAHB’s Institute of Residential Marketing and Harris Interactive. It was conducted in association with Move.com and wrapped up in late 2005. It has been mentioned frequently in the industry and is a great resource when analyzing your own program for selling homes online. You can download the executive summary here >>
To get the full detailed version - head over here >> (you have to provide a name and email address). You can also access a copy of the Power Point Presentation by Move.com.
Below are the points addressed in the survey:
- Consumers Who Are Online Value Online Resources Most In the Search for New Homes, While Builders’ Use of Traditional Media Continues to Dominate.
- Online Resources Are Believed to be the Most Useful and the Most Important to Consumers, and Builders Agree That Their Own Web Sites Produce the Highest Quality Leads.
- Gaps Persist Between Consumer and Builder Marketing Behaviors.
- Online Consumers Look to the Internet and Recommend Online Sources, Along with REALTOR® Recommendations, for Future Search Needs.
- Consumers’ Online Behavior.
- Consumer Segmentation Results and the Consumer Outcome.
- Builder Behaviors Online.
- Builder Lead Generation.
Featured on CNNMoney.com
Filed under: Interviews, News, Resources & Tools, Statistics
That’s the beauty of web 2.0…the article is actually a syndication of a recent Custom Builder article I contributed to: How Custom Homebuilders Can Build Internet Sales but it looks like I’m on CNN Money - I’ll take it!
You can view the actual article here at Custom Builder and you can read my two cents under Following the Leads and the Leaders.
Why your builder should love the internet
Hopefully, you do not need convincing as to why you need to implement or improve your online sales program. However, it is always good to look at the facts and forecast the future to adapt your program for things to come.
Let’s take a look at a few of these facts directly related to the homebuilding industry:
- Over 80% of homebuyers start their home search online That is a large percentage of your exact market. Shoppers are also frequenting the website more often to research a potential purchase and to look for additional information over their entire sales cycle.
- Over 27% of American adults use the internet to research real estateThis is a large portion of the adult population. This number has doubled since 2000 and is only increasing as the use of the internet increases.
- Homebuilders determined that the highest quality leads come from their websiteOnline customers are more informed, serious shoppers who can make a quicker decision than walk in traffic. Specifically, online customers who have been qualified and well taken care of tend to write a contract 30% of the time.
- The faster you follow up with a customer, the more likely they are to purchaseWhen a customer receives a fast and courteous response to an online request, the conversion ratio increases dramatically. This is not easily accomplished by the traditional onsite sales agent.
- Builders are not allocating enough marketing dollars to online sources to keep up with the demandStudies show the lack of marketing dollars allocated to online marketing. Similar studies also show that the amount spent for online marketing will almost double by 2010.
- Less than 10% of builders have a dedicated person to handle leads from online sourcesLeads are coming in over the web with little to no conversions because builders are not handling them quickly or effectively. A large segment of the market is undervalued.
Builders must anticipate the increase of online shoppers and the growing expectations for these potential homebuyers.
A recent survey conducted for the National Association of Home Builders Institute of Residential Marketing by Harris Interactive suggests that builders need to boost their online-marketing dollar allocations and improve their Internet presence. This study also revealed alarming trends in the lack of online contact from the builder to the consumer. Builders are missing an easy opportunity to connect with the target audience and would benefit by having a staff person dedicated to handling Internet leads and only 8 percent of participating builders claimed having a dedicated Internet salesperson to handle leads.
This revealing study is screaming one thing loud and clear – most homebuilders are not taking advantage of the large amount of people searching online for their new home. The exciting news is that there is an immense amount of opportunity for builders who are willing to channel their marketing efforts where the buyers are. Not only that, but builders put a program in place to effectively manage online customers will be well ahead of their competition.
A second study by the Pew Internet & American Life Project conducted in 2006 shows the increasing numbers of internet users who are using the web to research their next residence. The study shows that 39% of internet users have looked online for information about a place to live – double the overall number of Americans who had done so in 2000. This number has steadily increased over the past six years and is poised to increase at a higher rate.
Not only that, more than half of internet users ages 19-29 use the web to research housing. This is a forecast of things to come. Those who have grown up in the information age will be more likely to start their search online. Are you ready for those customers? The real question is, will you evolve to deliver on this new buyer’s expectations. The same old song and dance will not work anymore.
Conversion Rates for the Online Sales Program
Most builders have the same questions about the success rate of an Online Sales Program. How many leads do you get each month? How many of those are converted to an appointment? How many appointments end up on contract? What are your statistics etc…
I would like to share what numbers I have seen personally and also what many other successful programs experience. Keep in mind, every market and builder is different. Use these statistics as benchmarks but your numbers may vary slightly.
1-3% Leads captured from online sources
You will have many sources to drive traffic. What most builders use to determine this number is the new unique visits each month, not the total “hits” or even return visits. It is important to determine how many new users you attracted and how many of those requested further information. Your web host should have these statistics on hand - if not, they should be able to install the software to track this for you. A lead is qualified as one individual who submitted a request or called in directly from an online source. Many sources are included but only the total unique visitor stats from your website is used as the number to get your ratio. This is the easiest way to measure overall conversion.
20-25% Leads converted to appointments
The total leads are from both online sources and incoming phone calls. The conversion ration is based on appointments that are kept, not appointments scheduled and not kept.
30-35% Appointments that write a contract
This number is based on leads that go on appointment and then write a contract and close on the home. You will see some contracts fall through so do not count the totals until the home is closed.
5-10% Increase in overall sales
You can expect to see an increase in the first year of this successful program. This does not take into consideration additional sales that are created from a stronger web presence. It is hard to truly determine direct sources from the internet.
20-25% Of total sales will be generated by this program
You can expect to see a good portion of sales generated through this program. Keep in mind; these are additional sales or sales that you will not lose to your competition. You might have had some of these sales before – but now you will be sure to keep these numbers high.
Remember, these numbers will continue to increase as more people use the internet as the primary source for their new home search.
1/4 of American adults looking for real estate online
A recent report from Pew Internet states that 39% of all internet users have looked online for information about a place to live – double the overall number of Americans who had done so in 2000
This statistic is not to be confused with the 80+% of active home shoppers who start their new home search online…the 39% refers to every adult that is hooked up to the internet.
The number of internet users who go online to look for information about a place to live has grown steadily over the past six years. Now, nearly two in five adult internet users in the U.S. (39%) have done this, up from 34% in 2004 and 27% in 2000.
This means that overall, more than a quarter of all adults in the U.S. (27%) have looked online for information about housing, more than double the overall number of Americans who had done so in 2000 (13%).
Also, more than half (51%) of the youngest adult American internet users, 18 to 29 years old, have searched online for housing information. This compares with 43% of internet users 30 to 49 years old; 27% of internet users age 50 to 64; and 15% of internet users age 65 and older.
Access the full article here >>
Online Real Estate Ad Spending to Nearly Double by 2010
A recent article by Clickz shows the trend in Real Estate advertising and the shift from traditional to online sources:
The Web has put the real estate ad industry in constant flux in recent years, and a new Borrell Associates report indicates there are no signs of things settling any time soon. Indeed, online real estate ad spending is expected to grow from $2 billion this year to $3 billion by 2010, rising from a 17.7 percent share of all real estate ad spending to 32.1 percent. Read the full article here >>
So the question is - What is your strategy to ensure you are not left in the wake of other homebuilders? Are you taking advantage of every resource and allocating enough of your budget to online sources?
If most buyers start or conduct their new home search online - will they find you? If so, keep it up. Make sure that you follow the latest trends and constantly optimize your online campaigns.
If not, start today!
