How much should you be investing in your marketing? I have agent partners that spend anywhere from $1,000 per month to over $20,000 per month.
How much you spend depends on a lot of factors including how much capital you have available to allocate and your sales process skill level to monetize from your marketing expenses.
For certain, the most difficult marketing decisions are in the early growth years of your business. Once established and capitalized, it is extremely difficult to out-expense your revenues. For over a decade I have been helping agents build highly successful businesses while getting through the challenges of allocating capital towards marketing. To help my agent partners in that endeavor, I developed a four-stage marketing budget process for growing a business.
Here are the four stages of marketing budgets:
Stage 1 — Monthly Budget
A budget that you are committed to that consistently increases to Stage 2. The key to this stage is to spend enough to create momentum and never retreating. An on-again-off-again marketing budget is a guaranteed way to stagnate your business. You must create a high frequency of opportunities to succeed or fail while intentionally focusing on improving your sales process.
Stage 2 — Calendar Budget
A calendar budget where you spend as much as required to fill your calendar with new appointments to the extent you want your calendar filled. In this stage, you will most likely need a minimum of two marketing systems working simultaneously to create a sustainable and consistent lead flow.
Stage 3 — Surplus Budget
A budget that supplies 20% to 30% more leads than you can fill your calendar with. At this point you most likely have three to four marketing systems going and you start being more selective on which prospects you want to work with to maximize the return on your time.
Stage 4 — Branding Budget
A budget that supplies more opportunity than you have time to process so you can guarantee a sustainable business that never has blank spots in your calendar, unless intentional. This stage allows you to be selective on which prospects you want to work with and allows you to support an agency with sub-agents. The sheer volume of marketing exposure at this stage creates a neon sign above your business that makes prospect conversion much easier than in the previous stages.
So, how do you get started? How do you progress through these stages?
The Field Marketing Organization (FMO)
This is where mentorship and consultive business building services from your FMO are critical. FMOs can be great at distributing and processing products but in my experience a relationship where they provide you marketing systems that work and then come alongside you to help build a compelling sales process is rare.
Marketing is just an opportunity to demonstrate skill. Skill is represented in many ways as a business owner, but having a sales process that increases case size, closure rate, and decreases the number of appointments it takes to close is pivotal to increased capitalization. Increased capitalization is what allows you to maintain a marketing stage with consistency and eventually allocate the increase in capital to move to the next stage.
This is where you really must ask yourself, is my current upline relationship increasing my opportunity to demonstrate skill, and are they helping me to demonstrate that skill in a more effective way that is increasing my capitalization? An FMO should not be a product distribution system alone but rather a marketing and sales process system that is designed to effectively help you solve the problems of your clients with increasing amounts of productivity so your business will grow.
In other words, chose your partners wisely. When I speak at conferences to a new crowd of prospective partners one of the first questions I ask is, “What is the most expensive thing in your business.” Ninety percent of the crowd will say, “Marketing.” Anybody wanting to grow their business is spending at least 15% to 20% of their revenues on marketing and like I said, for some agents that can be over $200,000 per year. Regardless, even at the upper levels of marketing expenses, marketing is never the most expensive thing in your business.
Without a doubt, the most expensive thing in your, and everyone’s business, is opportunity loss. It’s the clients you didn’t close, the cases you didn’t maximize, the marketing you didn’t buy that costs you more than anything you could spend on marketing.
Opportunity is what I call “the invisible expense,” yet the most devastating problem every business has. How do you know what opportunity you missed if you never had the opportunity? If your sales process didn’t reveal all of the assets and problems of your prospective client how much did that cost you? You will never know. How much does the empty space in your calendar cost you? You will never know. I always say the most expensive lead you will ever pay for is the one you don’t have.
It’s better to ask these questions now than to be asking these questions five years from now and wondering why your business has not grown to meet your expectations.