Cost per lead and cost per door can be difficult to understand for property management companies just starting out, but understanding the difference between the two metrics is crucial to determining how successful a business is.
If you're wondering how to build a property management company, mastering these metrics (and the best strategies to optimize each one) is easier with insights from a property management consultant! Keep reading to understand more about the cost per lead vs. cost per door.
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What Is Cost Per Lead?
For this metric, property managers must put their "marketing" thinking cap on. Cost per lead refers to how much money property management business owners spend to generate a lead. This may include any costs associated with online ads, referrals from other clients or consultants, or offline advertising such as billboards or flyers.
When reviewing your cost per lead, it's best practice to look at how long your leads are staying on your website and what actions they're taking after the initial contact has been made. The cost of acquiring a "visitor" isn't the full cost to consider when evaluating cost per "lead," or a visitor who engages with your website and makes it into your sales funnel. Once a visitor engages, they become a lead that your sales team can nurture and convert into new doors.
What Is the Cost Per Door for a Property Management Company?
For this metric, a successful property manager must shift to their "operational" thinking cap. Cost per door is a little more complicated, but it involves understanding the total cost of generating a client and delivering your property management services. This metric, in true form for property management companies, includes all service fees associated with managing the home or property along with any costs related to sales activities.
While the cost per lead considers how much money you spend to generate a visitor who converts into a lead, cost per door evaluates all of your business's expenses to provide services and close that deal—including things like marketing strategy, employee salaries, or commissions based on sales numbers, and any tools or resources used to convert a lead into a new client.
Property Manager Tips and Tricks To Improve Metrics
When evaluating which leads are converting into clients successfully (and how much you're spending when doing so), remember this key insight: it doesn't matter how much you're spending if the leads aren't converting. If you have a high cost per lead but put forth very little effort to keep the leads engaged, it's an ineffective strategy. On the flip side, if you have a low cost per lead but there is no follow-up or any nurturing, your leads could fall through the cracks and never turn into clients.
When building a successful property management company, you must take note of these metrics—and aim for high-quality leads that are worth their weight in gold! By keeping track of them over time and comparing the numbers to previous years, business owners can better understand which areas to spend more money on (or maybe even rethink) when optimizing their sales funnel.
To Reduce Your Cost Per Lead
If you're spending too much time (and money) to capture new leads, it's time to evaluate your operations, staff, and software. With manually-driven processes, your team spends more time tracking leads and trying to find out "what's next" to move a potential client to the next stage of closing the deal. However, with the right property management software, your team spends less time finding leads in the funnel and more time engaging with the most qualified leads to bring more doors into your company's management.
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To Reduce Your Cost Per Door
Likewise, if your cost per door is high, you're likely dealing with process inefficiencies and poorly-trained staff. Working with a property management coach can help you identify workflows that aren't working well for your business. A coach can also help train your employees on new systems and help them work more efficiently to lower your company's overhead costs.
Optimized marketing and operating budgets set you up for growth and better profits per door!
Property Management Coaching Helps Lower Operational and Marketing Costs
Whether you're ready to start a property management company or grow your existing business, to get the most out of your marketing and operational budgets, be sure to take advantage of property management training opportunities that can help you build a company that's more cost-effective and delivers better service to clients. Don't leave money on the table when determining how much it costs to generate a new client! Managing more doors can only come by optimizing processes, implementing better software solutions, and hiring and training the best team to serve clients well.
If you're ready to lower your costs per lead and costs per door, Real-Time Consulting Services is here to help! We help property management business owners evaluate operations and budgets, then implement customized strategies to help them meet their goals. Reach out to schedule a free consultation!
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