InboundREM Return On Investment

InboundREM Return On Investment

Why Should You Care About ROI?

 

It’s the only number that matters if you’re spending over $10,000 per year on marketing.

Eventually, long-term inbound marketing strategies can allow you to make 10-30X ROI with the same amount of effort as short-term strategies. It can require a little more patience upfront, but the end result is often phenomenal.

The following case study shows a client named Dean Short making 10X ROI. He left a review that you can read to the right of this blog post. 

Next year Dean will make 20X. 

And he’s not my most successful client. He’s just the one who agreed to track his results for a case study with me.

 

This case study shows a 2.3X ROI in year one, a 10X ROI in year two, and a projected 20X ROI in year three. 

 

If you already use the best lead generation company on the market, you probably get a 4X ROI for the first year.

If trading that 4X ROI for a 2.3X ROI in your first year in order to gain 6X ROI in the second year, and a 14X ROI in the third year doesn’t sound worth it, then the following case study is not for you. Read no further. 

But if you want to see an actual client data breakdown and hear Dean explain his results, then read on.

 

How We Calculated ROI 

Return on Investment refers to the ratio of expense vs. earnings. 

As a real estate marketer, it’s difficult to find clients willing to track lead and sales generation.

I have many clients generating leads from InboundREM websites. But only a small handful sorts our leads from other lead sources. Only 1 or 2 track which sources produce their leads and sales.

 

Tracking Competitors

However…

I have access to the core lead and traffic generation for hundreds of real estate websites from almost every company that makes real estate websites. Plus I’ve had hundreds of recent conversations with former and current clients of other companies.

So I can often make very educated guesses on things like conversion rate. (Usually that means the ratio of website visitors to signups). 

Wherever projections appear in this article, I make conservative estimations about my own company and optimistic estimations about my competitors.

 

Tracking My Clients

Several years into taking on clients at a retail volume, I finally got one that tracked his production from the MOMENT the website went online to the MOMENT we hit 18 months of service. 18 months is the standard length of my SEO and lead conversion agreements.

This client also agreed to record videos with me at the 6-month and 18-month marks. You can hear his thoughts about both our service AND his results on the videos below. 

 

(THIS SAME CLIENT DID A TWO YEAR REVIEW AND THE NUMBERS BEAT THIS PROJECTION CONSIDERABLY) 

 

Additional Considerations 

1. COVID-19

The client is in a second-home market that COVID-19 impacted for 90 days during the best part of their sales year.

The ROI would be 20-40% higher without COVID 19. The client mentions this in the video reviews.

2. Pending Sales

This case study DOES NOT include the 5 listings under contract (but not yet sold) as part of the ROI equation.

3. Savings

The client eliminated $8400 in ad spend by hiring us. Before they hired InboundREM, they were spending that amount on advertising. 

But once their website gained traction, they dropped that expense because they no longer needed that lead generation method. 

Keep in mind that the client spent $12,000 in 18 months on our services. Our services produce an evergreen lead generation strategy that last for years after you pay once. Plus they own the website.

How many times have you told potential clients that buying is better than renting? It’s the same story here. InboundREM is one of the very few companies that allow you to own your site.

4. Other Clients

I have MANY clients generating more traffic and more leads than Dean. But they haven’t partnered with us the way Dean has.

So this is NOT InboundREM’s best results. It’s simply results tracked by a great partner who is so happy with the ROI they are willing to provide data to help YOU understand what our services can provide.

I also gave them some additional services to make it worth their time.

 

Traffic Generated in the First 18 Months 

A great website should use direct advertising at launch. It helps generate user behavior signals from Google, which in turn gets organic rankings happening MUCH FASTER.

This client utilized PPC for months 1-10 with a continually reduced budget. Currently, the budget is 0. The client intends to keep it that way because the website produces enough leads for their two-person team. 

 

InboundREM Website Traffic and SEO Growth 18 Months
Dean’s team generated this report, and it shows the 18 months worth of traffic generated by InboundREM

 

InboundREM Services The Client Used

InboundREM actually provides FIVE services. 

  1. Produce the best SEO optimized real estate website that money can buy (and that you own)  
  2. Get website traffic using mostly SEO. Oftentimes we also manage PPC budgets for clients that want ranking and leads fast
  3. Make sure that TRAFFIC converts into LEADS
  4. Integrate CRMS and Lead Follow Up tools to encourage proper follow-up
  5. Consult with the client on an ongoing basis and make unique recommendations unique for THEIR account and territory (Many other lead generation companies fall short here, and you pay significantly for tools you never optimize)

This case study reflects a client that has utilized THREE of FIVE of our included services (Numbers 1, 2, and 5 above). This is another respect in which the client is average.

This client spends 2-3 hours a week adding elements to their website to make it more useful. That makes them more active than most of my clients. 

Client Spending vs Earnings 

These numbers reflect 18 months of service, which is almost completely basic service. This client opted to have much of the SEO work done upfront in order to get the best results as fast as possible. 

  • The client’s total SEO and website investment for 18 months not including hosting or IDX was $12,000.
  • Their total earned income was a little over $36,000

 

What was the 18-month InboundREM return on investment?

The 18-month return on investment was 3:1

 

What is the expected 36-month InboundREM return on Investment?

We are going to use the client’s CURRENT numbers to extrapolate this next period’s traffic, lead generation, and conversion rate. 

The website traffic is currently growing at 10-15% per month. We will use a conservative 10% for future modeling.

We currently do not have any lead registration triggers on this website. All responses are 100% organic. We assume this will remain the same.

Traffic to lead conversion (without lead registration triggers) is 0.25%. We will also use that number for future modeling. 

We will also assume that COVID interruptions will not affect the busy season in the same way. The expected production would be as follows:

  • 48,000 Visitors
  • 150 Leads
  • 15 Property Tours 
  • 13 Offers
  • $1.8-2.5 Million in Sales 
  • $60K in Additional Revenue (Earned off the original investment)

A conservative estimate of the 36-month ROI is 12:1.

 

Additional ROI Factors

1. PPC

There was a PPC budget used to estimate the client’s total expense at $5800.00. It’s worth mentioning this client has always spent on PPC.

$20 a day was their previous ad budget, which comes out to $8400.00 a year. They kept that budget in place for 5 months. Next they stopped entirely for a couple of months. Then they brought it back at $10 a day. Finally, they discontinued it permanently about 14 months after the website launch. 

 

2. Registration Triggers

This client hates registration triggers. Most of my clients have these triggers, which increase their conversion rates. My websites average a 1-2% conversion rate across our current and previous clients.

 

3. Atypical Aspects 

Some of the numbers mentioned in this case study are FAR below average. This client is getting in front of 1 out of 10 leads. That is HIGH. Because the website doesn’t require registration, almost every acquired lead is VERY GOOD.

However, the close-ratio is very low. COVID impacted this market deeply. It is very much coming back, which the client says himself. But everything briefly went full stop. That won’t be the case in most markets.

If I was being optimistic, these numbers would be 2-3 times higher.

 

4. Website Ownership Benefits

Finally, the client OWNS this website. Not me or InboundREM. Generally speaking, the standard way to value a real estate marketing website is according to its generated commissions.

If the client decided to sell it at the 2-3 year mark, they should be able to get a minimum of 1 year of earned commissions related strictly to website generated sales.

Currently, that number would be $45,000. In other words, they would ultimately get paid for the work they put into the website. 

At the upper end of the spectrum, that means a $12,000 investment would produce $126,000 in earned income no later than Year 2-3. Not only do you earn that much in commissions, but you also own a website worth that much.

These numbers are based on projections from this case study.

 

Benefits of Inbound Marketing

I am a smart marketer. You probably follow my stuff because you feel the same. At the end of a 3-5 year period, there is NO marketing company in the real estate space that comes close to the ROI that InboundREM generates.

The only cons are the upfront investment and the patience necessary to see SEO results. That’s why clients should have long and short-term lead generation strategies in place.

Inbound Marketing will propel you into an entirely different income stratosphere over the course of a few years.

We have slightly lower conversion rates than some competitors with PPC campaigns, but we generate MUCH higher quality leads. Ultimately that leads to more money.

 

Competitor ROI Comparisons

I am going to estimate a sale price at the exact average as it is for my client which is $250k.

I will also give each PPC-based provider a 10% year-over-year increase from users bookmarking and returning to their websites. This is actually an aggressive number.

Remember I have access to analytics for all of these providers. I generate from estimates from HIGHLY EDUCATED FIGURES. 

 

Sierra Interactive ROI

  • $300 Setup Cost 
  • $499 Monthly Service Fee (Includes CRM and IDX but no Marketing)
  • $1000 Advertising Costs
  • Low-quality registrations due to a commoditized search experience (it’s great but not better than you find other places in abundance) 
  • Traffic to lead conversion is about 2%  
  • Estimated cost of a visitor is $0.50
  • It takes between 40-60 registrations to generate a sale
  • I will NOT factor in the tools, time, and other resource expenses to follow up with many low-quality leads. 

 

Year 1 Cost$19,100
Year 1 Leads480
Year 1 Sales$2.5 Milllion
Year 1 GCI$75,000
Year 1 ROI4:1
Year 2 ROI4.5:1
Year 3 ROI5:1
3-year Spend$56,100
3-year Earnings$240,000

 

 

Real Estate Webmasters ROI

  • $3000 Setup
  • $499 Monthly Fee (Includes CRM and IDX but no Marketing)
  • $1000 Advertising Costs
  • Low-quality registrations due to a commoditized search experience(it’s great but not better than you find other places in abundance) 
  • Traffic to lead conversion is about 0.5%  
  • Estimated cost of a visitor is $0.50
  • It takes between 40-60 registrations to generate a sale
  • I will NOT factor in the tools, time, and other resource expenses to follow up with many low-quality leads. 

 

Year 1 Cost$21,000
Year 1 Leads360
Year 1 Sales$1.8 Million
Year 1 GCI$53,000
Year 1 ROI2.5:1
Year 2 ROI3:1
Year 3 ROI3.5:1
3-Year Spend$58,000
3-Year Earnings$174,000

 

 

InboundREM ROI

  • $3500 Setup
  • $1000 Monthly (Including SEO and Marketing) CRM and IDX cost an additional ~$167 per month
  • Advertising is included. However, additional PPC spending is possible. We will include the additional for this case study since the client DID spend extra. The client did not keep spending the $1000 in SEO OR PPC past Year One, so we removed that from the case study.
  • High-quality registrations due to tons of additional information on the website about the area being served AND no FORCED registration which all other examples in the case study have. Very few real estate websites bother to add anything more than a commoditized paragraph about areas. We had both written research and integrated statistical info from numerous sources. Our pages are one-stop research destinations that create high-quality registrations.
  • Traffic to lead conversion is 0.25% in our case study, far less than our competitors in the case study
  • It takes between 10-15 registrations to equal a sale, far better than our competitors in the case study
  • Much less time necessary for managing these leads 

 

Year 1 Cost$12,000
Year 1 Leads90
Year 1 Sales$1 Million
Year 1 GCI$30,000
Year 1 ROI2.5:1
Year 2 ROI8.75:1
Year 3 ROI12:1
3-year Spend$28,210
3-year Earnings$180,000

 

The 3-year spend includes PPC, IDX, and CRM even though my client doesn’t actually spend money on all of these. It also includes $100 a month for hosting and servicing the website.

 

Real Geeks ROI

  • $700 Setup
  • $249 Monthly Fee (Includes CRM and IDX but no Marketing)
  • $1000 Advertising Monthly Costs 
  • Low-quality registrations due to a commoditized search experience (it’s great but not better than you find other places in abundance) 
  • Traffic to lead conversion is about 1% while good these websites provide the least amount of info of all the Search/IDX driven websites.  
  • Estimated cost of a visitor is $0.50 
  • 40-60 registrations equal a sale
  • I will NOT factor in the tools, time, and other resource expenses to follow up with that many low-quality leads. 

 

Year 1 Cost$15,700
Year 1 Leads240
Year 1 Sales$1.2 Million
Year 1 GCI$30,600
Year 1 ROI2.5:1
Year 2 ROI3:1
Year 3 ROI3.5:1
3-year Spend$45,700
3-year Earnings$135,000

 

 

ROI Comparison Table

MetricInboundREMSierra InteractiveREWReal Geeks
Year 1 Cost$12,000$19,100$21,000$15,700
Year 1 Leads90480360240
Year 1 Sales$1 Million$2.5 Million$1.8 Million$1.2 Million
Year 1 GCI$30,000$75,000$53,000$30,600
Year 1 ROI2.5:14:12.5:12.5:1
Year 2 ROI8.75:14.5:13:13:1
Year 3 ROI12:15:13.5:13.5:1
3-year Spend$28,210$56,100$58,000$45,700
3-year Earnings$180,000$240,000$174,000$135,000
3-year ROI6.4:14.1:13:12.9:1

 

Comparing Other Competitors

There are a lot of comparisons not on this list. For example, Boomtown lands between Sierra Interactive and Real Estate Webmasters. Their tools are better for teams, but they have a MUCH MUCH higher monthly cost, which drops the ROI. The same goes for Commissions Inc and KvCore.

Currently, Ylopo probably has the highest first-year ROI because they have better ad management and lead generation tools. Conversion numbers are still on the 1 in 50 side, maybe slightly better because of some of their automated tools.

At best they are 4:1 or 5:1 in the short term (first year) and 6:1 or 7:1 over the three-year period. The point here is NOTHING comes close to long term ROI on an information-heavy, SEO-optimized website that you own. And that’s what we make here at InboundREM. 

 

Authenticity of the Case Study

The InboundREM ROI used in this case study is 100% centered around factual information the client gave us. In many aspects, they represent a typical client, not a cherry-picked one.

The numbers used for competitor projections are based on hundreds of conversations with realtors using these services through 2018 and 2020.

I also have access to backend systems for ALL of the competitors mentioned and can verify things like traffic to lead conversion rates, as well as the budgets used to generate those leads. If anything I have OVERESTIMATED the returns of most of these systems. 

 

Video Reviews of the Case Study 

I can write all day long but NOTHING beats hearing from a client themselves about what their experience has been using a service.

This client recorded case studies for me at Month 6 and Month 18. Hear from them directly about their current ROI and their experience working with us.

 

Case Study Review – Month 6

 

Case Study Review – Month 18

 

What InboundREM Can Do For You

I am wildly enthusiastic about our services. InboundREM has generated over 1 million dollars in revenue for ourselves using the same strategies we use for clients.

I’ve had clients with ROIs of 100:1. The best case study I EVER had is a client that spent $50,000 in the middle of a major market downturn.

She specializes in golf course homes in Palm Springs. She has been making over $300,000 dollars PER YEAR in commissions off her website since 2009. Plus, she never spent more than a few thousand here and there updating the basic information we put on the site all those years ago.

 

Is Inbound Marketing Right For You?

When Inbound Marketing works, it pays off like nothing else. Obviously it doesn’t hit home runs every single time. Some clients stop working on websites before they hit a critical mass and start driving returns.

Of course, these clients sometimes have terrible or non-existent ROI. You need to stick with it once you start especially if you’re doing work incrementally.

It also requires an attitude shift. You need to be of the mindset your website WILL BE the place your clients learn about you. Full stop. As a result, you need to commit an hour a week to improving or (if you’ve hired us) reviewing work.

But you do this instead of chasing leads all week. That’s the trade-off. Attract, don’t chase. Spend your time making better and more appealing answers for your clients and then making sure those answers have been done in ways Google loves.

That’s where we come in. The numbers make so much sense. If you can buy into the attitude shift and you’re an experienced agent or broker, then you should absolutely open a dialogue with InboundREM. 

 

Recommended Articles

Benefit from reading more of our best content! The following articles can make your life much easier.

 

 

Beyond that, check out InboundREM University, a huge podcast library that covers everything from evergreen topics like the herculean power of SEO lead generation to hot topics like using TikTok to build an audience of 70,000.

 

Contact Us

Use the form below or go to my “services” page to schedule a call. Leave a note mentioning your target areas and current marketing strategies. If you have a website, please list it. 

 

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