Sales & Marketing Budgets

The Bottom Line

Caribbean developers typically have one primary question when they call us:

How much does it cost to set up a successful Sales and Marketing operation for my resort residential development?”

While there is a traditional “rule of thumb” generalization, a project’s specific details make for huge variations. Some experienced developers can see as much as 50% of their new inventory consumed by existing clients.  We can ballpark the overall Sales and Marketing budget to be 10-15% of the total real estate valuation, but three key variables determine the size and efficiency of a Sales and Marketing Budget: site location, pace, and scale.

Overall Sales and Marketing Budgets cover a wide range of line items that are important to define and estimate prior to commencing. From the sales perspective, we must account for the salaries, housing, and commissions for the sales team, broker commissions, travel costs, and details such as CRM software. Marketing costs can include website creation and maintenance, PR, Copywriters, graphic artists, photographers, advertising, and events (both on and off site). Where in the budget should I have placed an emergency boat trip to St. Maarten from Anguilla to buy a new air conditioner for a movie star’s arrival the next day? You’d better have a contingency fund!

These three variables are keys to accurate budgets:

Location:

Site locations can vary from established hot spots with more demand than available inventory to remote, emerging positions without the benefit of natural foot traffic. Are there similar projects nearby bringing competition and cooperation or does the project have to “go it alone”? Is the location accessible with direct flights from key markets or are travel costs going to spiral? Every photographer, designer, copywriter, and team member will be coming!

Pace of Spending:

There are technical decisions to be made regarding the “burn rate”.  Many marketing costs are necessarily front-loaded as the initial designs, set-up, and branding all occur in the early stages. Often, developers can become budget adverse right at the critical stage when all has been created but the resulting ROI has yet to be realized. When budgets can flow without interruption and with heavy front-loading, they tend to work quickly and end up costing less. When developers try to “test the waters”, the pace of the roll out ends up creating a higher overall price tag.

Scale:

Larger projects with larger budgets often associate a smaller percentage of the overall project budget for sales and marketing. Scale produces efficiencies in any business. Smaller projects seemingly need to do the same amount of work, on a lesser budget. However, over the past decade, consumer preference trends have overtaken the scale narrative. As boutique, less dense properties continue to trend towards higher valuations, the scale advantages for larger projects have really diminished.   

Sales and Marketing budgets are highly debated, and often confusing, but with right-planning and execution they easily pay for themselves.     

Costs should pay for themselves and we can help you plan so that they do exactly that.