You’ve got to spend money to make money, right? We’ve all heard the phrase, but there’s still plenty of people out there spending more than they’re making. While it’s important to invest in your business, doing so without a plan is quick way to blow your assets and end up in a difficult spot. Let’s talk about three things you can do to maximize the effectiveness of the money you’re spending on leads.
1. Track your return on investment
When you spend a dollar, what do you get back? This is the central question every agent needs to be able to answer about their marketing campaigns. Too many of us fall into the trap of only doing what’s most comfortable rather than what’s most profitable. If you spend $200 on data and a dialer to do some prospecting over the phone and make $1000 in commissions for your trouble, that’s a 5:1 return on your investment. In other words, for every dollar you spent prospecting you made back five. On the other hand, if you send out a mailing campaign for $400 and make $1200 in commissions your ROI is just 3:1 – still good, but not as good as 5:1. If you weren’t tracking your ROI, you may be tempted to spend more of your marketing budget on direct mail campaigns – calling a few cards is easier than calling a list of data, after all. But the numbers don’t lie, and if you’re tracking your ROI properly you can always make sure you’re dedicating your marketing dollars to the most profitable avenues.
While pushing your marketing dollars to your highest-returning lead sources is important, you don’t want to put all of your eggs into a single basket. You never know when technical difficulties might take a web-based dialer offline, or when a lead vendor might be acquired by a less-reputable company, or when a trusted data source might dry up. Track your ROI and spend judiciously, but don’t be afraid to test new waters. It’s important for the long-term health of your book of business.
3. Avoid the bells and whistles
A good salesperson can do far more with mediocre leads then a poor salesperson can do with Glengarry leads. Those fancy exclusive internet leads or silky-smooth pre-set telemarketed appointments may sound great, but they come with a higher price tag and can quickly tilt your ROI in the wrong direction. If you’re new to the business don’t get suckered in by the high-priced leads that promise insane closing rates. Cut your teeth on prospecting methods that don’t break the bank – you’ll be thankful you did.