With a new year in sight, it’s time to think about your upcoming marketing budget, which supports strategic efforts from your website to social media to search engine marketing and everything in between. Apart from allocating a percentage of your top-line revenue to your marketing budget, the question today is what content to emphasize, particularly now that buyers are engaging with digital and virtual content more than ever.
Plan Your Marketing Budget
Determining the right percentage for your company depends upon certain factors: your current level of branding and recognition in your market (i.e. are you now building in new areas that you haven’t before, and are prospects meeting you for the first time?), your upcoming communities, etc. Depending on your overall revenue, 1-1.5% of your top-line revenue is a sound benchmark for most builders in today’s climate.
If you have new communities coming on board (in addition to what you currently offer), you could be on the top end of the percentage spectrum. Because you have to start advertising these communities early, it could take a while for home closings to occur, depending on the stage of construction. This means that you may need to factor in being on the top end of the budget, which would balance itself back out over time once home closings start to occur.
When you plan your marketing budget for the upcoming year, consider these factors:
- What was your sales goal from the prior year? Did you hit it? How far off or over your goal were you?
- What was your average sales price?
- What is your sales goal for the coming year?
- Were there changes to your market this year or shifts that you can expect next year? (i.e. new competitors or shifts in absorption rates)
- Are there upcoming dates or events that will affect the lifecycle of one or several of your communities? (i.e. community close-outs and new communities coming online)
Distribute Your Funds
When updating your marketing budget, it’s imperative to determine exactly how to distribute your funds. Because 80% of the traffic that comes to a builder’s website originates from three main sources: organic content (SEO), paid search search (SEM), and social media, your marketing budget should be weighted accordingly.
But the other areas of your marketing deserve the same consideration. For example, content is often overlooked when it comes to budget, but the truth is, content should always be at the top of your list in terms of overall spend. Now that buyers have more content in front of them than ever, your content must be exceptional in order to stand out. Does your website excite and entice buyers, as well as build trust? In order to produce content that’s fresh, test new things that you haven’t tried before — whether that be virtual walkthroughs, video tours, intriguing written content, new programs available within Zillow/BDX, etc.
This is a sample budget recommendation that we make, intended to leave wiggle room for each company’s individual needs:
50-60% Digital Advertising (includes SEO, SEM, social media, Zillow, content website, etc.)
15-20% Signage/Sales Offices
Maintain Ongoing Analysis
It’s important to keep in mind that your marketing budget must be tailored to your company’s specific situation, including market conditions, priorities, top-performing channels, competition, and timing. As you head into the new year and update your budget, make sure to recognize what’s working for you, including what channels and tactics buyers are engaging with most. This way, you can invest in the right tactics for your company, and meet your buyers where they are at this point in time.
Your marketing budget is an ongoing process that should be monitored and refined throughout the year as needed. When it’s planned out correctly, your budget can help increase sales in 2021 and beyond.