It’s budget planning season. It happens every year and every year it seems like it gets more confusing. Creating a digital marketing budget doesn’t have to be daunting. We’d like to make it easier for you in 2024 by sharing some tips, tricks, and insights we have acquired over our 20+ years of fulfilling the digital needs of home builders.
ASK (AND ANSWER) SOME INTRODUCTORY QUESTIONS
It is key to answer some basic foundational questions before you start allocating dollars to specific line items. Some of the most important questions to have answers to are:
What are your goals for 2024?
Start with your sales goals (by region/division if applicable) and work back to appointments, then to leads, and finally website visits. If you have defined conversion rates for your particular business, great, use those. If you don’t, we have found the following to be a good rule of thumb for goal-setting purposes for online generated sales:
- Web Visit > Lead = 2%
- Lead > Appointment = 25%
- Appointment > Sale = 20%
So, as an example, if your sales goal is 50 homes, then working backward you would need 250 appointments, 1,000 leads, and 50,000 website visits.
Quick Note: we tend to be conservative in our percentages in order to put more emphasis on top-of-funnel web traffic numbers. That way, if you convert at a higher rate, then you exceed your goals and everyone wins. Also, you aren’t relying on “best in class” conversion figures just to meet your baseline goals.
Did you meet your goals from last year?
If so, you might want to make some minor adjustments and just run it back. If not, you’ll definitely want to try some new tactics.
What is your total budget?
A good baseline to use for your total marketing budget is .75% – 1.5% of the total projected revenue for the year.
Has anything changed within your markets?
What does your land position look like? Have absorption rates changed? Are there any new competitors joining or old competitors leaving the market?
Are you happy with your current website?
Your website should be treated like your most valuable storefront. It will get hundreds of times more traffic than any of your models so make sure it is the best and most accurate representation of your brand. If, after an honest assessment, you need a major refresh or redo then you’ll need to make the necessary adjustments to your advertising spend (unless you can pull from capital reserves).
Where should those digital dollars go?
Once you have the above questions answered you can focus on allocating your marketing budget. Here are 5 high-level tips for building a successful 2024 marketing budget to help you sell more homes.
- Prioritize Digital – We’ve all seen the stats: 96% of home buyers use online tools during the home search process and 47% look online as the very first step. That’s why your budget should reflect that as a priority. We recommend at least 60% of your total marketing budget be allocated towards your online presence (digital advertising, listing networks, content creation, website maintenance, etc.).
- Be Everywhere – It sounds more daunting than it actually is. The majority of builder website traffic (about 90%) comes from 4 primary sources: organic search (SEO), paid search (like Google Ads), social media (primarily paid Facebook/Instagram ads), and syndication sites (like Zillow and New Home Source). Cover your bases by making sure you have a healthy presence in these four areas.
- Emphasize SEO – Organic search should be your biggest source of traffic and leads (at least 40% of total traffic). However, don’t mistake organic search visits as “free” traffic; instead, it should be thought of as “earned” traffic. SEO is powerful for industries, like new home construction, where the buying cycle tends to be longer and more complex. This extended buying cycle offers additional opportunities to get your brand in front of prospects. While the monetary investment isn’t as much as your paid advertising sources, the time investment is usually much larger. SEO optimization requires a complex strategy of developing on-page and off-page ranking factors to make sure your website and content are ranked on search engines. Unless you have an SEO pro on staff, it is definitely worth setting aside some budget to hire an expert (like Graphic Language) to help you succeed.
- Don’t Forget Content – Even the best outreach strategy is worthless without proper website content. You won’t be putting your best foot forward or getting conversions if your content is lacking. Set aside money for photography (lifestyle and product), video (91% of consumers want to see more online videos from brands), testimonials, renderings, virtual tours, SEO copywriting, etc. Having great content is how you improve the conversion rates listed above (especially from web visits to leads).
- Treat Your Website Like Your Most Important Storefront – We mentioned it before, but it bears repeating: first impressions matter. That’s why home builders spend tens of thousands of dollars designing and decorating their model homes and sales centers. So why wouldn’t you set aside part of your budget every year to update or upgrade your website? Whether it is a complete overhaul or just continuous tweaks and updates, dedicate some money to maintain your web presence and make sure it represents your brand to the fullest.
- Bonus Tip: Don’t “Set It and Forget It” – Your marketing budget is a living, breathing document that should be monitored and updated consistently throughout the year. Initiatives not working? Reallocate some dollars to a more successful tactic. Exceeding your sales goals? Pull back on your marketing spend a little bit (or keep it up and blow those goals out of the water if you have the land position). Land development delays in a certain area? Put a hold on your digital spend for a few months to save that money for pre-sale/launch activities.
Remember, the steps you take now in the budget planning process determine the success you will have in 2024! Don’t skimp on the front-end planning and reap the rewards in sales down the road. If you’re wondering how effective your current digital paid media strategy is, book a free digital paid media audit with us. We’ll deep dive into your strategy and offer deep insights, actionable next steps, and an overall review to help you understand what’s working and where you can improve.