Cost-Per-Lead or Cost-Per-Lease?

I just commenting on Toni Blakes most recent blog post here, but also thought I'd add the question to the discussion forum.

What's more important to you? Measuring cost-per-lead or cost-per-lease? Do you measure both, and use one or both to determine your marketing spend? If one, why do you feel it is a better measure?

Thanks for sharing your thoughts and enjoy your day!

Mj

As a Marketing and Financial analyst. I would go right for the cost per lead. The cost per lead , if tracked well in conjuction with location, quality, style,and specials being offered, on marketing flyers. you gain more actable information. As a simple rule of thumb LEADS = LEASES right?
Marketing dollars need to be streached as far a possible. What would you rather have for $200 dollars of marketing, just for 3 leases or 15 leads that turn into 3 leases. The leads give you a compass of you over all marketing campign. The amount of leases has other factors not directly related from the $200 spent on that specific marketing. the quality and professionalness of the staff.

So go with leads over leases but both are important in their own ways. however, if you are using one to guage a quailty return from a marketing campign look at leads then look at leases and also look at you staff and plolicies when comparing the two, to get out any outliers. to better understand their strengths and weaknesses.

Kyle-

You make an excellent point. I think they are definitely 2 measures all should be monitoring. That being said, I believe one of the biggest challenges we have is truly tracking leads. With so many sources out there offline and online, many prospects don't necessarily know/remember what was the main influence for them to contact the property. Even if the last source they saw was the number they called from, it could have been another source that really influenced them to research a community further. We have a long way to go with tracking our customers, and must take any of the ad source data we collect (for leads or leases) as estimates of what is actual.

Mj

My fundamental interest is Cost-Per-Lease. In the end, we make money on leases, not leads.

Here's what I mean:

Many years ago I did an extensive cost-benefit analysis of our newspaper advertising. What I found was that newspaper advertising generated a substantial number of inquiries (leads), but the cost-per-lease was crazy, about $1,500. My conclusion was that, taking aside the crazy cost-per-lease, we were spinning our wheels on all of the unqualified, misdirected newspaper inquiries. The cost-per-lead for the newspaper advertising was great, but the amount of business it generated was horrible.

In the mid-1990s we were spending about $100,000 for 2 properties comprising about 700 apartments. By the end of the 1990s we were spending $0 on newspaper advertising.

As to the issue of the difficulty of properly determining the source of leads, we make this one of the top priorities in each initial contact. You are absolutely correct in that very often it becomes extremely difficult to determine the proper source, particularly when it comes to the internet sources. Our leasing staff understands how important it is for them to pinpoint, as best as possible, the genuine "1st" source, because this is the data from which we are going to make fundamental decisions on where we spend our advertising dollars.

This is why we do not use a guest card to determine the source. In our initial phone contact with a prospect, we are drilling down into the lead source. In our initial personal visit, we are drilling down into the lead source. Next to getting the application and the lease, assessing the lead source is one of our highest priorities.

Rick Hevier
Richard Hevier
Richard S. Hevier
[email protected]
RickHevier.brandyourself.com/

Rick, I really agree with you. It's quality, not necessarily quantity that is important. It's important to monitor both, but in the end for me it is the final result that counts. Thanks for your thoughts!