Every time I conduct a seminar on personal marketing, I am besieged with questions about how much top agents spend on marketing: “Is there a certain percentage of income that is the ideal amount to spend?” “Can you spend too much or too little?”

The answers are straightforward and logical, but they do require you to think. The amount you should be spending on personal marketing is determined by the media costs in your area, the competitive environment and your personal goals.

First, you must figure out what the media costs are in your farm area. Every farm is different: some farm areas have a number of great publications that effectively reach that target group, while other farms do not have any publications and therefore you must rely purely on direct mail. Remember, your marketing plan should expose your name and marketing message to your clients three to five times each month. You should also send something to your past clients every three to four weeks. Simply add up the cost of getting your message out using a combination of the media options that are available to you.

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Next, you must look at your competitive environment. Look at the core marketing message that you are going to build your campaign upon. Does it make you stand out from the rest of the agents in your area? Does your message resonate with your farm in a meaningful way? Is it a reflection of your values and natural personality? The stronger your core marketing message and the more passion you have about your point of difference, the less you have to spend in order to get your prospects to pay attention.

Warning: If you take on a dominant, well-established agent head to head, your marketing budget is going to have to be much larger and it will take longer to be effective. If, on the other hand, you are already well known in your farm area, your marketing will work faster and more effectively.

Finally, look at your personal goals: how much real estate do you want to sell? How fast do you want to grow? How do you want your business to operate? You can cut your marketing costs if you are willing to pay the price in time to personally cold call and door knock. Unfortunately, most agents hate doing business this way and don’t have the discipline to do it consistently. Understand that the best thing about investing in personal marketing is that it not only helps you build your business, it buys you time. Lots of top agents are willing to invest a greater percentage of their income in order to have more time off and to have their business operate effectively.

Notice that not once in determining your marketing budget did I ask how much money you should spend. The least effective way to invest in a marketing plan is to say I have X dollars to spend—how should I spend it? You must start by asking, “What do I want to accomplish?” Then figure out how much it will cost to meet that objective. If you don’t have the money to accomplish your objective, make it smaller or find a way to get the money. I see so many agents wasting marketing money because they feel like doing “something” is better than doing “nothing.” Remember, in marketing, spending 90 percent of what it takes to get your message into your prospect’s awareness produces nothing.

During my 25 years of involvement in real estate I have come up with a rule of thumb that might be helpful. Your budget should be set on what you want to earn, not what you currently make. Your marketing budget should be between 15 to 30 percent of your gross commission goal for the coming year. The percentage that you spend is inversely proportional to your income. The more you make, the less you have to spend. If you earn $1 million a year in commissions, you can get by with spending 15 percent or even less on marketing. If you are making $100,000 or less you must spend 30 percent so that you grow your business.

Over the years we have seen many brand new agents who have started out with a goal to build a real estate business and invested $20,000 to $30,000 to jump start their business through personal-marketing. Almost all of them end up earning over $100,000 in commissions their rookie year. Best of all, it keeps growing and within three or four years they are the top producing agents in their area.

When I tell this to agents I get one of two responses: anger or excitement. Some agents have called me names and told me I was hurting the real estate profession. On the other hand, agents with business backgrounds often ask why isn’t everyone taught this when they get into real estate — it’s the way business works.

At times agents will ask me, “What do I do if I don’t have the $20, 000 I need to build my business through marketing?” I tell them that if they have no money they must start out cold calling and door knocking because they have no other option. As soon as they can save up some money, they can then launch a marketing campaign.

The reality is that you have to invest enough in marketing to get the job done. I am amazed at how many agents say to me, “Last year I spent a few hundred dollars on note pads, chip clips, magnets and other things, and it generated nothing in return.” If those things ever do pay off for you, think of it like winning the lottery — enjoy it, but don’t count on winning the lottery every year!