Real estate has always been a competitive field, but with Zillow on the rise, commissions on the decline and an army of newly-licensed Realtors joining the industry every year, growth-oriented agents, brokers and team leaders must squeeze every last ounce of ROI out of their business systems—including the money they get back on their CRM.
According to tech consulting firm Nucleus Research, the average ROI on a CRM can be as high as $8.71 on the dollar.
Question is, how does your CRM stack up?
In this article, we’ll break down four proven ways to calculate the ROI on your real estate CRM. We’ll also cover the CRM features that are most effective for increasing your ROI over time, versus the “vanity” features that sound like they save you money, but could cost you big as your business grows.
So, is your CRM worth the money? Let’s find out.
Unlike a typical “CRM”, Follow Up Boss was designed as a digital command center for your most crucial business activity: sales. To find out how you can generate more deals in less time try Follow Up Boss today!
Table of contents:
- Real Estate CRM ROI Formula #1: Replacing a Stack Of Disparate Tools
- Real Estate CRM ROI Formula #2: The Hidden Cost of Extra Features
- Real Estate CRM ROI Formula #3: Agent Productivity
- Real Estate CRM ROI Formula #4: Conversion Rates Optimization
- Choose a Solution, Not a Tool.
Real Estate CRM ROI Formula #1: Replacing a Stack Of Disparate Sales Tools
Real estate is never boring. Every day agents perform tens, if not hundreds, of tasks to generate more revenue for their teams.
Lead capture, prospecting, nurturing, and more—for each of these tasks, agents must rely on efficient technologies, otherwise the job would quickly become a paper-pushing nightmare.
Here’s a list of some of the essential tech tools real estate agents use to perform their daily tasks:
- Auto-dialer software: starting at $300 monthly
- Email database management software: starting at $184 per month for 10,000 subscribers
- Marketing management systems: starting at $17 per month for limited functionality
- Appointment management software: starting at $29 per user monthly for 300 bookings
- Task tracking service: $9 per user monthly
- Web tracking and analytics: starting at $29 per month for a basic plan
So far, that adds up to $568 per user monthly, and that’s just for the essentials.
While it can be tempting to take an a la carte approach to your real estate tech stack using only what you need when you need it, the numbers show that this can lead to redundant, disparate systems that will drain your ROI over time.
At Follow Up Boss, we keep it simple. We offer all of these features (and more) for $69 per user, per month.
You also get features designed to replace time-intensive manual tasks such as team productivity reports, lead source reports, and Smart Lists. And you get it all in one place. Agents never have to waste time frantically switching between dozens of different applications just to figure out who to call next.
And because we are 100% focused on true customer relationship management, we’re committed to ensuring that each one of these functions is categorically best-in-class—which leads us to our next formula.
With Follow Up Boss, your prospects are always one click away. Follow ups are organized, and client intel is clear and centralized so agents never have to waste time switching screens.
CRM ROI Calculation - Money Saved On Disparate Systems:
(Total cost of all services per month / Cost of CRM solution per month) * 100%
A CRM system with the monthly cost of $69 per user replaces a stack of disparate services that cost the business $314 per user, per month.
($568 / $69) * 100% = 823% ROI
Note: This formula does not account for the value of additional features that the CRM system offers for the same (or lower) price, as well as the productivity benefits of bringing all the disconnected services into one centralized system. (More on this to follow!)
“I didn’t like any of the CRMs we had tried and I knew Follow Up Boss integrated well with Curaytor, which I knew I wanted to use. I did some research online and decided to go for it. I started filtering all my own leads into Follow Up Boss and it worked so well that the entire team ended up switching their whole system to Follow Up Boss, too.” — Alex Lopez, Team Leader, Homeway Real Estate
Real Estate CRM ROI Formula #2: The Hidden Cost of “Extra Features”
It’s great that a CRM can save you money by replacing a stack of different tools for your business, but that doesn’t mean it should do everything.
To make sure you get the best possible ROI out of your CRM, you need to get clear on what you want it to do. Should your CRM include mass emailing? Should it be bundled with your website? Lead gen tools? Paid ads?
There are a number of feature categories that are adjacent to what a CRM offers. Does it really make sense to cram each and every one of them into your CRM?
At Follow Up Boss, we’re careful about what gets bundled into our product. Here’s why that’s great for your bottom line.
You don’t have to pay extra when you switch to best-of-breed tools
Certain CRM solutions may come with some integrated external functionality, for example email marketing or paid ads. At first glance, this all-in-one approach may seem more cost and time effective.
But what if the current website layout doesn’t work for you? What if you decide to grow your marketing channels and need a tracking system your all-in-one CRM doesn’t support?
If your CRM doesn’t allow you to easily update or replace these components, you could end up paying thousands of extra dollars to migrate your entire website or take a forklift to your existing systems.
You shouldn’t pay for features you don’t use
The cost of building and maintaining dozens of built-in features are baked right into an all-in-one CRM’s pricing model. Even if you don’t use those features, you’re certainly paying for them.
Rather than trying to be everything to everyone, at Follow Up Boss we focus on high-end integrations with the right partners.
That means you get robust two-way functionality with the best tools in real estate. If you decide to upgrade to a better class of website, advertising, transaction management platform, etc., you don’t have to pay a penalty simply because you outgrew your system.
Don't let your CRM lock you into a website or lead provider
If functionality in your CRM comes at the cost of flexibility, then it’s a poor tradeoff.
We’ve seen time and time again how agents get hit with hefty CRM-related expenses as soon as they start to see momentum in their business.
The cost of migrating your website can easily reach up to $320 or more—for just one website, and not including the additional time cost of dozens hours spent navigating this process. And we won’t even attempt to calculate the potentially hundreds of thousands of dollars left on the table because you unknowingly locked yourself into an unproductive lead source.
Bottom Line: You shouldn’t be penalized for evolving your business.
When choosing a CRM, look for one that lets you upgrade your systems with ease based on where your business is today and where you want it to be in the future.
CRM ROI Calculation - Cost Savings On Unused Features:
(The % of features not being used / 100) * Cost of CRM / (Optimal CRM for Real Estate)
Your brokerage pays $300 per user for an all-in-one IDX integrated CRM + website, while only using 40% of its offered functionality (and not using 60%).
At the same time the cost of an optimal CRM system where the company would utilize all or most features costs $69 per user, per month.
($300 * 0.6) / $69 = 261% ROI or approximately $2,772 saved every year, just by switching your CRM.
“We wanted to have a better class of leads, we wanted to have a better website. I wanted to have a CRM that was not attached to anything else. That was super important to me.” — Ryan Rodenbeck, Team Leader, Spyglass Realty
With the Follow Up Boss Pixel, you get real-time visibility into your hottest leads across all your websites and marketing channels.
Ready to try Follow Up Boss? Get your free 14-day trial today!
Real Estate CRM ROI Formula #3: Agent Productivity
Wasted time can have a huge negative impact on your ROI and unfortunately, most sales agents spend almost 65% of their time on non-revenue-generating activities.
That’s roughly 26 hours per week that could be spending generating, nurturing and converting leads. But you can’t expect agents to focus on the right things if you’re not giving them the right tools.
The CRM with the best ROI will be one that’s so easy to use, it feels like second nature.
Here’s how Follow Up Boss reduces the time agents spend on routine tasks:
- Prioritize leads in order of most-likely to convert
- Automate admin workflows and low-priority lead nurture
- Delegate non-critical tasks so they can be executed in a single sitting
- Integrate with other tools to keep your entire operations in one place
Note: When choosing a CRM, pay special attention to its integration capabilities. At Follow Up Boss, our open API lets you integrate with the tools you already use and love, allowing you to streamline even the most complex business processes in one central place.
Never waste time switching between dozens of different tools
When it comes to agent productivity, it’s not just the admin tasks that can stunt your progress. Consistent prospecting is what separates the best from the rest and if you're constantly having to switch screens, it’s incredibly difficult to achieve.
Here’s how Follow Up Boss helps you consistently connect with more leads in less time:
- Integrate with 200+ lead sources to keep all your prospecting activities in one place
- Automatically distributes leads to the right agents agents
- Segments contacts to prioritize which leads to follow up with and when
A high-ROI CRM doesn’t even feel like your typical “CRM”. It’s the platform you run your business on. Not just a tool, but the app you’re in 7-10 times a day, in the office, in the field, wherever. The app that runs on your laptop and mobile, all day long, for everyone to see, everyone to use.
With Follow Up Boss’s user-friendly performance reports and dashboards agents always know where to focus their energy and exactly what to do in order to improve.
CRM ROI Calculation - Agent Productivity Gains:
The number of saved hours * $ per hour = $$ saved
The amount of time saved / Time Spent Closing Lead = N more closed leads
After implementing a CRM, you reduce the time your agents spend on routine tasks by almost 50%, freeing up a minimum of 10 hours per week for focused prospecting and lead management activities. The average time agents spend closing leads was around 8 hours total per lead, so each agent is able to close an additional 5 leads per month.
"One thing that I really love about Follow Up Boss as opposed to some other systems is the simplicity of it. And I can tell you from using Salesforce on the admin side, and in all of the other platforms we've used over the years—it's really complicated for the agent. And at the end of the day, we have to service our agents the best that we can and make their lives as easy as we can.” — Kris Lindahl, Team Leader, Kris Lindahl Real Estate
Real Estate CRM ROI Formula #4: Conversion Rate Optimization
The sales lifecycle in real estate is long.
But with the right CRM, you can shorten buying timelines and boost your total conversion rate simply by offering the right information to the right prospects at the right time.
Here are three ways Follow Up Boss helps you increase your conversion rate across your database:
1. Chase the right leads
It’s estimated that salespeople with a quota of $1 million and an average deal size of $100,000 lost $218,000 over the course of a year because they were chasing the wrong deals.
Follow Up Boss uses customizable automated lead segmenting helping you focus only on your hottest leads, while nurturing leads with longer timelines with soft-touch follow ups until they’re ready to convert.
2. Create a personalized experience
Personalized emails generate up to 6X more revenue than non-personalized emails. Fact.
But how do you encourage your agents to offer a one-of-a-kind customer experience, when they have to contact hundreds of people in a day?
With source-specific drip email campaigns, automatic follow ups, customizable scripts and templates, your agents will always know what to say and when to say it. Instant access to your entire communication history with a prospect means you always remember exactly what they’re looking for and never run the risk of sending the same message twice.
3. Optimize your marketing spend
Follow Up Boss gives you full visibility into all your lead sources and the conversion rates across each one. With this key marketing data, coupled with each individual agent’s performance metrics right next to it, team leaders know two things:
- Which marketing channels bring you the most ROI
- Which types of leads your agents convert best
Some agents excel at dealing with FSBOs and others are masters at converting Zillow leads. With smart automated lead routing, team leaders can increase conversion rates across all their channels by simply allocating the right leads to the right agents.
With a little help from the Follow Up Boss Pixel, you know exactly what potential clients are looking for before making the first call to help boost your conversion rate for new website visitors.
CRM ROI Calculation - Increasing Conversion Rates:
Number of leads per month from Source 1 * Increased conversion rate for Source 1 = Increased number of closed leads per month for Source 1
After analyzing conversion rates across marketing channels, you redesigned your follow up strategies with personalized messaging.
The average increase in conversion rates across all marketing channels was around 1%. With the average amount of 1,000 leads per month from all marketing channels, the number of closed leads per month grew by a total of 10.
“With Follow Up Boss, our average conversion rate is around 15% on assigned leads. If I wasn’t using Follow Up Boss, I’d have no earthly idea what our conversion rate was” — Eric Bramlett, Owner, Bramlett Residential Real Estate
Choose a Solution, Not a Tool.
We know how crucial it is for real estate teams to spend their limited resources with care. These four formulas are just some of the ways you can measure the true ROI on your CRM to make sure it’s performing like you need it to.
But a well-designed CRM doesn’t just give you awesome ROI, it helps you stay competitive no matter how the tides turn.
That’s why we built Follow Up Boss as not just a CRM, but a high performance sales and business platform that helps you protect and grow your business. In The Boss Method, you can find an entire resource center dedicated to doing exactly that.
With the help of our private success community, weekly sales coaching, webinars, interviews, mega-guides and more, your team always knows exactly which actions to take each and every day to convert more leads and grow your real estate business.
Want to see exactly how much value you can get the right platform? Try Follow Up Boss for free today. No strings attached.