Editor’s note: This is the first of a two-part series.

The National Association of Realtors’ 2014 Home Buyer and Seller Generational Trends report is packed with must-have knowledge for any real estate professional who wants to generate the best return on his marketing dollar. Where should you be spending your money?

Are you spending thousands of dollars each year on search engine optimization, Facebook ads or other types of Internet advertising? How much do you spend each year on direct mailing, newspaper ads, calendars and magnets?

If you are spending heavily in these areas, you may seriously want to reconsider whether the return justifies the costs. In fact, you may be wasting valuable marketing dollars that would be better spent elsewhere.

Surprising findings: Where do sellers find their listing agents?

Because listings are in short supply, agents are being much more aggressive about advertising. According to the NAR report, however, many agents are spending their marketing dollars in the wrong places.

Consumers and agents both agree that having a Web presence is absolutely necessary. With all the millions of real estate dollars being spent in this area, however, did you know that the percentages of sellers who found their listing agent from any Internet site in this survey was equal to the same percentage of sellers who found their listing agent at an open house or from a yard sign? (Only 4 percent!)

Putting it a little differently, a yard sign coupled with an open house generated twice as many closed seller transactions compared to all categories of Internet websites (8 percent vs. 4 percent).

Moreover, you were just as likely to receive a referral from a relocation company or from another real estate agent or broker as you were to have a seller find you on an Internet website.

Ever-shrinking returns

Search engines, newspaper ads, Yellow Pages or home book ads accounted for less than 1 percent each of all closed seller leads. Mobile or tablet applications, direct mail pieces (newsletters, fliers, postcards), and “advertising specialty (calendars, magnets, etc.)” all accounted for less than 1 percent of the closed seller leads reported in this survey as well.

Perhaps the most startling statistic was that floor duty (“Walked into or called office and agent was on duty”) generated almost as many closed seller leads in this survey (3 percent) as websites.

Buyer findings

The results from the buyers mirrored the seller results. Specifically, websites were responsible for generating 9 percent of the buyers in the survey who closed a transaction as a buyer.

As before, you still would be more likely to meet a buyer who will close if you have a yard sign combined with an open house. Nine percent of buyers who closed were from websites. Twelve percent of buyers who closed came from either an open house (6 percent) or a For Sale/Open House sign (6 percent.)

Floor duty held constant at 3 percent.

Some things never change

With all the noise around prospecting using websites, social media and other online resources, the one factor that really makes the difference is a referral from a trusted resource or face-to-face contact. This is true for buyers and sellers from all age categories.

For sellers, 39 percent found their real estate agent through a friend, neighbor or relative. Another 25 percent used the agent they had previously used to list or buy a home. Another 4 percent came from referrals from other real estate agents or brokers, and 3 percent came through an employer or relocation company. That’s a whopping 71 percent of all closed seller transactions resulting from “trusted sources” or face-to-face contact.

The buyer numbers mirror the seller numbers. Seventy percent of all closed buyer leads came from a “trusted resource” or face-to-face contact. (Specifically, 42 percent came from the agent’s sphere of influence, 12 percent had used their agent on a previous transaction, 6 percent met at an open house, 4 percent were referred by another agent, and an additional 4 percent were referred by a relocation company.)

Where to spend your money

While these findings are surprising, there’s a wild card in the mix called “Other.” Does “other” include social media, video, or other online marketing tools independent of “Internet websites”? The report does not address this issue.

Nevertheless, these findings make it abundantly clear as to what your best ad spend will be.

First, your No. 1 priority should be expanding your database and generating referrals from people who like you and the services that you provide.

Second, it is vital that you stay in contact with past clients. Not only are they great sources of referrals, they are highly probable to hire you the next time you transact if you stay in contact.

Third, any activity that puts you face to face with buyers and sellers is more likely to produce a closed deal than activities that rely on impersonal contact.

Would you like to learn more about where to spend your money? If so don’t miss Part 2 on Thursday.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Discover why leading Realtor associations and companies have chosen Bernice’s new and experienced real estate sales training for their agents at www.RealEstateCoach.com/AgentTraining and www.RealEstateCoach.com/newagent.

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