While some data is available on ideal customer acquisition costs for real estate brokers, this data still needs to be completed. Real estate brokers must be able to adjust their target customer acquisition cost (CAC) based on factors such as property type and transaction price. 

This article breaks down the average CAC for real estate for common lead sources in the real estate industry. We also released data regarding CAC by property type and transaction price across six acquisition channels. The channels and target customers for each channel are as follows:

• Email: Previous clients, referrals, and leads for website inquiries 
• LinkedIn: Professionals, business owners, and investors (typically commercial)
• Organic Social Media: First-time home buyers, people in and around your friend network
• Meta Ads: Generally first-time or second-time home buyers
• Google Ads: Active searchers for a real estate broker for either commercial or residential
• SEO: Similar to Google Ads, but some people do not trust ad listings and will jump to the organic results instead

 

Calculating CAC

To calculate CAC, the following formula is used:

CAC = Sales/Marketing Expenses ÷ Number of New Customers Acquired

 

Average CAC by Lead Source

This table gives the most common lead sources for brokers along with the average CAC for each. 

 

Average CAC by Property Type

This table lists five property types and an average CAC for each discussed marketing channel. 

 

Average CAC by Transaction Price

Next, these tables gives common transaction price ranges for each property type with an expected average CAC for each marketing channel. 

Houses

Condos

Office Spaces

Retail

Warehouses

 

Using Each Marketing Channel Effectively 

Each marketing channel has a set of best practices to ensure success with the campaign. This is not designed to be a “how to”, but rather to list some considerations you should make when considering each strategy. 

Email

Email is a fantastic marketing channel because the traffic is owned, and you can, in theory, market to the list as much as you want for little cost. Email is great for sending market updates and current listings to potential customers, keeping them engaged so that when they are in the market, you are top of mind. 

A best practice is to segment lists into “investors”, “first-time homeowners”, etc, so you can send highly targeted emails to each. Investors should receive emails on potential properties before they hit the market, and first-time homeowners should receive information about upgrading to a larger and nicer home after 12-24 months. 

LinkedIn

LinkedIn will be a source for primarily commercial leads but can be used for high-end residential. Generally, you will want to organically build your network by connecting with your clients first, then your clients’ connections. Publishing high-quality content hyper-relevant to the local market will be noticed if the content is valuable, which can open doors to long-term relationships with new clients, and bolster relationships with previous or current clients. 

Organic Social Media

Organic social media on platforms such as Facebook, Instagram, and TikTok will primarily target less experienced home buyers such as first-time homebuyers. However, agents like Ryan Serhant have harnessed social media for more premium listings. Generally, what organic social media is useful for will depend on your service area. If there is a large quantity of higher-income buyers such as in NYC, creating content for those people can make sense. 

Make useful content entertaining to the market you serve, and over time, your brand and followers will increase and you will become a “go-to agent” for those looking in your market. 

Meta Ads

Meta ads are generally best for finding people when they are just entering the buying cycle. These people are considering buying or selling a house, but have not started active research yet. We recommend running ads with a lead magnet centered around first-time homebuying or upgrading from your first home with specific information about the local market to ensure the information appeals more to the potential buyer or seller. Once the lead has downloaded the lead magnet, also place them into a new lead segment on your email list and market accordingly. 

Google Ads

Google Ads will target customers actively in the market to buy or sell a property, as indicated by the keywords they type into the search box. The best tactic for Google Ads is to create several highly specific landing pages to be placed with highly specific keyword groups. The more applicable your ad and landing page are to the searcher, the more likely they will convert to a lead. 

SEO

SEO is the holy grail of digital advertising. While it will take concentrated effort for many months to years, it gives you the ability to capture localized traffic without bidding against companies such as Zillow. It will take expert keyword research and page creation to ensure you can rank above the larger companies in local markets, but it can be done. 

Optimizing Your Real Estate Marketing Strategy

If you wish to work with an expert partner to create a custom real estate marketing strategy for your business, consider reaching out to us on our contact page. We specialize in building tailored lead generation systems with Google Ads and SEO that deliver consistently high-quality leads that convert. 

Follow my blog with Bloglovin