per-click” and direct email; tradeshows and exhibitions; point of sale material; billboards; entertainment and sales offices expenses and public relations.
These costs should be broken into line items and match up with expense items in the monthly and annual, profit and loss statements, in order to monitor costs against the initial budgets.
Back up the items with specific-detailed assumptions such as ad placements in particular newspapers and related costs, and so on. The assumption worksheet builds up a zero-based budget instead of just putting in lump-sum amounts, it details out the actual, supported costs of each expense. It is best to obtain actual quotes.
Having control and monitoring monthly expenses is important as overspending on sales and marketing reduces the bottom-line profit for a project. Equally important is tracking the source of sales leads, which leads to a "conversion factor” showing how many potential customers who walk in the door finally buy the product.
Have sales staff set up a daily traffic record of customer contacts via agents,direct contact, Internet, phone and to alsoask direct customers how they came to visit the property. Each month when you review expenses, also analyse sales data.
Cumulate the results for the month and see what is producing the most sales.
Two critical exercises are reviewing how effective your spending is and where are the most sales generated. Marketing plans are not set in stone. You need to rework strategies, create new ideas and constantly improve to meet a changing market. Often you see projects that have 70% of their sales from outside agents but spend 80% of their marketing on stand alone advertising. A more logical approach would be to adjust the spending to co-op advertising or using greater incentives to encourage more sales from that venue.
In most cases, marketing is one of the most liked parts of property development. It allows you to use your creative juices, experiment and create botb'image and product.
Equally important, though, is that any development is a business and the same rules apply to cost management as they do to construction.
Measuring results through out the sales cycle, adapting and moving to the market and not letting ego get in the way of solid business judgement is key to getting the payday you want at the project's end.
