Do you calculate your numbers? Before I get into what this means, I want to tell you that I am not a mathematician. I dropped maths in year 10 as soon as I possibly could. Not for of any reason other than I hated it and it wasn’t something that interested me. However, since then, I have taught myself what I need to know and it turns out you do not need to be a mathematician to know your numbers, just a smart businessperson.
The POWER of numbers
We had a business planning meeting yesterday and as a team got the opportunity to break down the numbers in our business. We calculated what an average client income is right down to what an average attendee is worth to us at one of our free seminars or webinars. We then were able to work out the average of what a single registration was worth to us in a dollar value per event that we run. This was very powerful stuff. We then calculated what it cost us per client acquisition and broke that down even further until we had the cost per attendee and cost per registration acquisition. These are numbers that I have been trying to realise for many years however, due to outside factors, I have been unable to get a true reading. The whole team was fascinated with our findings, including myself because it has given our business more insight than we have ever had and means that with these numbers we can now measure exactly how we are doing and increase or decrease marketing, events, and sales to achieve just about anything and everything we want to.
How to calculate your numbers
Below you can find an example of how to use this powerful tool and calculate your numbers in your own business:
Let’s say your Gross Commission for the quarter equals $70,000.
Divide $70,000 by the number of houses you sold, for this example, we will say that number is 7. $70,000 divided by 7 = $10,000/deal
Easy huh, let’s look at the numbers a little deeper.
$70,000 divided by the number of appraisals you did in the quarter, let’s say you did 31 appraisals, some listing opportunities, some low motivated rapport and relationship building appraisals.
$70,000 divided by 31 = $2,258 per appraisal. Not bad considering we do FREE appraisals. Nothing is for free; everything has a cause and effect. The more appraisals we do, the more opportunities we will get, and the more opportunities we get, the higher the GCI we will write, simple ?.
Let’s dig further – let’s look at how many contacts you added to your database in this quarter. This is one of the most important metrics because as salespeople, our intellectual property, AKA the VALUE of our businesses, is in our database and how healthy and pure it is.
So, let’s say from everyone you came across in that quarter, you were able to add an average of 5 new contacts per week that permitted you to stay in touch with them to hopefully one day serve their real estate needs.
5 x 12 weeks = 60 new contacts for the quarter.
To quickly calculate your own numbers, download my easy to use calculator by clicking the button below.
Let’s see what each contact added to your database is worth
This is the point that I always struggled with, but once you have figured it out, you will find the outcome to be very helpful.
So, you wrote $70,000 in GCI for the quarter, divided by your 60 new contacts = $1,166.66 per contact added to your database. Again, not bad for just getting to know someone and politely asking them if you can stay in touch with them?.
Let’s go one more step, let’s say you meet 15 new people per week (again a very important step if you are interested in growing your business and knowing your numbers), so 15 x 12 weeks = 180 new people per quarter.
Now you can work out what every single person that you meet and talk to is worth to you. $70,000 divided by 180 people = $388 per client you meet.
So, every single person you come into contact with is worth $388 to you ?. Now, if that doesn’t get you excited to go out and meet more people, nothing will.
You can use the same equation for working out your COST or EXPENSE PER CLIENT. Just take your costs and divide them accordingly.
Knowing your numbers is the most important aspect of your performance and peace of mind. For more great systems and strategies like this, make sure you register for my upcoming FREE half-day Real Estate Brilliance webinar.