Where should you begin when first thinking about SEM for your rental business? First, we assume you already have a professionally designed website that is user friendly. If not, there are a variety of choices to choose from. Godaddy, Wix, SquareSpace, and WordPress are a few do it yourself webpage designers.
Second, to truly understand where you want to go with search engine marketing you must first know where you are. Take a few moments to answer the following questions:
- What are my business goals?
- What are my value propositions?
- Do I know how I am converting today without paying for traffic?
- Do I have the ability to track results?
- How much am I willing to spend daily to test results?
Let’s go through each of these questions to better understand where you should begin.
What are my business goals?
When you sit down and think about your business goals, what do you come up with? Are you looking to drive more renters to your website? Are you looking for more foot traffic to your business? Are you looking to increase your brand recognition? Are you a property management company looking to drive more warm owners leads for your sales team to call? Are you looking for more traffic, more page-views, more clicks? Whatever your goals are, you must understand these goals and determine an estimated ROI (Return On Investment) so you know how much you can afford to pay for advertising.
How to calculate marketing ROI?
Gross Profit – Marketing Investment
Let’s say you sell toys online and have some historical data you can use to estimate how your SEM may perform.
Your goal: Drive more tenant leads to your available rentals
Average Gross Profit Per New Tenant per year: $2,000
Estimated Conversion Rate: 1% (1% of all leads turn into a signed lease)
Estimated Cost Per Click: $2 (More to come on how to forecast CPC in future posts)
Willing to Spend to Test – $1000
If you were to spend $1,000 on SEM (Marketing Investment), you would generate about 500 clicks to your site. ($1,000 / $2).
Assuming the 1% conversion rate, of those 500 clicks you would get 5 conversions. (500 * 1%).
Total gross profit from the 5 conversions would be $10,000. (5 * $2,000)
Total Marketing ROI = (Gross Profit – Marketing Investment) /Marketing Investment
Your Marketing ROI = ($10,000 – $1,000) / $1000 = 900% ROI
ADVANCED ROI CALCULATIONS
If you have been in business for a while and have more historical data, you can use advanced ROI calculations to forecast SEM ROI. You can use a spreadsheet or download an ROI calculator online. These tend to take into consideration Gross Margins, COGS, conversion rates, Life Time Value of the Customer, Average Cost to Acquire a customer and much more.
What are my value propositions?
In a world where everything eventually becomes a commodity, sometimes it is hard to differentiate your product or service from your competition. With that said, here are a few value propositions that may fall into your competitive camp.
It could be a differentiation based on price, service, response time, free shipping, quality, speed, comprehensiveness, technology, ease of use, and others.
These are all value propositions that can be used within your landing pages and ads to increase click through and conversion rates.
The easiest way to determine your value proposition is to have empathy for your customer. Think as if you are the customer looking to use your service. Ask yourself, “What is in it for me?” As a customer, why should I use your service or product and not your competitions?
We use Google search instead of Bing because we perceive Google as being faster, more comprehensive and one that gives us better results. All of these are Google’s value propositions.
Do I know how I am converting today without paying for traffic?
If you don’t have reporting set up already on your website, the first thing you must do is set up a free account with Google Analytics. In Chapter 8 we will go into great detail on how you can use the data in Google Analytics to make better search engine marketing decisions.
If you do have analytics on your site, be sure to set up goals so you can see which traffic and keywords are currently converting into sales. We will walk you through some example in further chapters.
Do I have the ability to track results?
We will dive much deeper into Google Analytics in chapter 8 when we discuss measuring and tracking results. In the meantime, we recommend spending 30 minutes with this getting started with Google Analytics from Google.
How much am I willing to spend daily to test results?
The nice thing about Search Engine Marketing is the ability to test keywords and creatives with very little risk. You can set daily budgets as low as $20 per day and in some cases you can set keywords bids as low as .05 cents.
For a good test, you should have at least 1,000 clicks you can analyze data over a minimum of a 2 week period. This is a good statistical sample size.
We recommend taking your estimated CPC (Cost Per Click) and multiplying it by 1,000. This will get you your total Test Marketing Investment. Divide this by the total amount of test days to get your ave cost per day. (14 test days)
You estimate it will cost you .25 cents per click. Take 1,000 times .25 cents to get $250. $250 divided by 14 days (our two week minimum) equals $18 in Max Daily spend. If your test budget is higher than you can update this daily spend accordingly. The more clicks you can test the better.
Now that you have set up a good foundation for your first search engine marketing campaign, what search engines should you advertise on? Below is a list of search engines, in order of importance where you can advertise. We recommend starting with Google and then going to Bing once you know which keywords and ads are converting the best.
- Google Adwords
- Microsoft Bing – Also powers Yahoo Search Marketing
- Yahoo Gemini – Yahoo mobile only
- Chitika – Local Mobile Ads
In addition to advertising on search and content, there are options to retarget the renters and owners that come to your site and show your ads to them when they are on Facebook, Twitter, the web and more.
We will be doing another guide dedicated to retargeting but for the purpose of this guide we will give you enough information so you can launch and track your first retargeting campaign.