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The 3 Worst Marketing Investments Real Estate Agents Make

Travis Balinas
July 8, 2014

3 Worst Marketing Investments Real Estate Agents MakeThe list of the worst marketing investments real estate agents can make might surprise you. Earlier, I wrote about the number one reason agents make bad marketing investments, which was that they don’t market to the right audiences. Now, let’s talk about what some of those bad investments are.

What’s fascinating is that some of the more common marketing investments real estate agents make happen to be among the lowest-performing. According to the National Association of Realtors’ 2014 Home Buyer and Seller Generational Trends report, the lowest-performing marketing investments include email “blasts,” just sold cards, direct mail pieces, newspaper ads, calendars and magnets.

Now each one of these marketing tactics has a time and place, but typically, the cost per lead you get from these is alarmingly high, and you often have to work twice as hard to close those leads, too. Let’s look at each one in a little more detail.

Email “Blasts”

When email marketing is done right, it works. But email marketing is vastly different from an email “blast.” Email marketing is when you use content marketing strategies to send out a newsletter to your known client list with the intention of staying top of mind. An email “blast” is simply sending useless content in the hopes of generating a new lead from an email list that you might not own.

With email blasts, there’s potential for two marketing mistakes. The first is that you paid to get an email list or you’re paying to have someone else send an email out to their set of contacts. It is incredibly difficult to convert these email recipients into prospects. Why? Because they don’t know you, and as you already know, real estate is all about that personal connection.

The other mistake here is that the content you’re sending out is uninteresting. Whether it’s an email boasting about what a successful agent you are in your city or a poorly automated email sharing “this week in real estate” stats, you can guarantee a low open rate and an even lower response rate.

Websites for Organic/Local Leads

This is another delicate issue to discuss but one that needs some clarity. It’s 2014 and having a website is a must. However, if you think simply having a website is all you need to generate new business, you’re sadly misinformed. Unless you’re actively generating new content almost daily, running an incredible SEO strategy and paying to promote it, the chances of getting a page one listing for “real estate agent in ‘x’ city” is very slim.

A website is no longer a point of differentiation. Simply having a website doesn’t make you any more special than the next agent. The 2014 NAR generational report makes this point quite clear: “The percentage of sellers who found their listing agent from any Internet site in this survey was equal to the same percentage of sellers who found their listing agent at an open house or from a yard sign (only 4%).” This makes sense because 71% of all closed seller transactions result from trusted sources like referrals.

Websites are crucial for real estate agents because when your name does get passed along to someone, they’re going to Google you and will expect to find a professional web presence. But, your website won’t generate leads on its own.

Just Sold Cards and Other Direct Mail

Plain and simple, whether direct mail pieces are 100% automated or require a lot of work on the agent’s part, there are two things that are true: they can be quite expensive, and they really don’t work.

I won’t focus too much on pricing because it certainly varies from vendor to vendor, but the cost per customer acquired from direct mail pieces is much higher than you need to spend. If you spend $5,000 on a direct mail piece that gets you one new customer, your customer acquisition cost is $5,000. Even at a 3% commission rate on the sale of a $200,000 home, that means you only profited $1,000. That’s a lot of money for not a lot of return!

As it turns out, these ever-shrinking returns are a reality. Below is a list of marketing activities agents engage in that, when combined, account for less than 2% of closed seller leads:

  • Search engines
  • Newspaper ads
  • Yellow Pages
  • Mobile apps
  • Direct mail (newsletters, fliers, postcards)
  • Advertising specialty (calendars, magnets, etc.)


Think about that for a second. The sum of all of the marketing activities listed above resulted in less than 2% of sales for agents. Today’s customer looks to their own trusted networks to find a listing or selling agent. If your marketing spend is focused on reaching people who don’t know you, then you’re missing the mark entirely when it comes to activating your sphere of influence. It’s time to start spending your money on things that actually yield a return.

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