When measuring your marketing campaign effectiveness in new-home sales, there are a number of metrics available to try to make sense of the endeavor. Make more strategic marketing decisions — and allocate your budget effectively — by narrowing your focus on the metrics that actually matter.
Based on tips from the Zillow Group Guide to New Construction Marketing, use the following metrics to cut through the marketing noise straight to the data that helps you get more appointments and land more sales.
Cost per click (CPC)
What it is: CPC measures the price you pay each time an online advertisement is clicked.
How to calculate it: Depending on the kind of pay-per-click campaign, this number is determined by multiple factors, like maximum bids, relevancy score, your audience targeting and the platform on which the ad is running. But the basic formula is often advertiser’s cost divided by the number of clicks.
For example, if a campaign cost $100 and it received 32 clicks, the CPC would be $3.125.
Why it matters: While less significant than other metrics, knowing how efficient your CPC is can help you fine-tune future campaigns to ensure you maintain both lead volume and quality. Think of this as an indicator that will help shape more important metrics down the funnel.
Cost per lead (CPL)
What it is: CPL is the amount of money spent to generate a lead.
How to calculate it: You can calculate your CPL by dividing your marketing spend by the total number of new leads for a particular campaign.
Why it matters: Leads are a sought-after outcome in marketing, but not all leads are created equal. A high volume of leads does not indicate campaign effectiveness. Knowing your CPL offers a high-level understanding of performance by channel or campaign.
If CPL is an important metric for your organization, be sure you consider the lead quality before assessing campaign efficacy.
Lead to appointment and appointment to sale
What it is: Your lead-to-appointment rate is the number of leads from a particular campaign who then took the next step to schedule a home tour or visit. Appointment-to-sale rate is the number of those visitors who ultimately purchased a home.
How to calculate it: Divide the number of leads by set appointments, and then divide the number of actualized appointments to home sales. Try to do so at the campaign level.
Why it matters: Getting home shoppers in the door of your sales center and touring your communities is one of the most important steps in the buyer’s journey. These metrics gauge both buyer interest and brand perception. Once they’re touring your community, what can you do to inform and impress them?
Cost per sale (CPS)
What is it: CPS is the holy grail of sales and marketing metrics, letting you know what you spent that resulted in business revenue.
How to calculate it: CPS is calculated by the total spend divided by sale count. You should calculate this by individual campaign source.
Why it matters: Unlike many vanity metrics, CPS provides the bottom line of dollars in and dollars out; in other words, what did it take to make a sale? This calculation can provide compelling evidence that your marketing and sales is working to attract, nurture and convert leads.
Measure what matters most to your business: appointments and home sales. As you work on budget planning, this metric will guide your understanding of what channels and campaigns to cut or bolster.