I just realized that for the longest time, we obsessed over metrics such as cost per lead (CPC) as a measure of success. We’d track how much we spend to get PPC leads and rejoice when the number goes down. But to be honest, that number stops meaning much once we start looking closer.
Sometimes the low cost leads don’t close at all, but some of our more expensive leads turn into closed deals (and repeat clients!). Now, we should pay more attention to ROI. It’s way more useful to know that we spent, say for example, $1,000 and make $3,000 back (with more deals still processing) than to focus on a $10 lead that ghosted us. While other metrics are still important to refine our strategy, ROI is the best way to evaluate if our PPC ads are working.
Check out the blog post I wrote about why we should shift our focus to ROI and how REW CRM’s Sources feature can help you track it. When you have good CRM hygiene and diligently log your deals and PPC spendings, REW CRM can calculate ROI and other key metrics, giving you a clear picture of your performance.
Hi Mheanne, thanks for sharing this. We used to focus a lot on cost per lead, too, but we noticed that cheaper leads didn’t always convert. Now, we’re also looking at ROI to see which campaigns bring in closed deals. It helps us spend smarter instead of just cheaper. Tracking everything properly really does make a difference.
Good stuff! The whole “cheap leads” narrative is definitely a trap.
For example - several of our customers told me CINC leads were much cheaper than REW leads (and they are! Some of them average $5-$10) so I gave them an honest shot on my real estate team.
The results - I got a tonne of leads for my budget (call it $10 CPL) - BUT!
A large % of those leads had no phone numbers
There was a much higher “fake lead” %
After many months, we only ever closed one deal (a listing) and while not CINC’s fault, it still hasn’t sold. So one listing, 0 commissions.
The timeframe/dataset? I just looked it up - it was not insignificant - we purchased over 1,200 leads to earn zero commissions
Now the thing with CINC on top of the leads being low quality - is that they sell you on “cheap leads” but then their platform is $1,400 for a team. So really you need to factor that in.
So in total we probably spent around $25,000-$30,000 I think (I can check) to get 1,200 leads and no conversions - So the real CPL was like $25 all in, which is “fine” (in some markets good) if the leads are good. But if they leads are not good, then any CPL is unacceptable.
This is a good case study as to why to focus on ROI - vs CPL
PS - to CINC’s credit, they were very nice people, and had excellent training and customer service.
