We have all heard the saying “what gets measured gets done,” but what does that really mean? What it means is that as entrepreneurs or business people, we need to know what our numbers are so that we can track, manage, and improve our performance. So, what numbers are we talking about? When we talk numbers, we are actually referring to Key Performance Indicators (KPI’s) OR Key Result Indicators (KRI’s). To avoid confusion let’s just group them all together as KPI’s. So, what KPI’s are there in real estate and what KPI’s need to be tracked?
CONTACTS – Contrary to popular belief, we as real estate agents are not prospecting for listings, listings are a bi-product of having a relationship with home owners and having built trust with them over a period of time. When we prospect, we are looking for CONTACTS to nurture to hopefully one day serve their real estate needs. We should strive have at least 1,000 pure contacts on our database to constitute us having a business. So, contacts need to be tracked on a weekly and monthly basis as this is your pipeline and value of your business. The more contacts you have, the more valuable your business becomes.
HOT LEADS – This is my favourite KPI, in fact I believe that this is a real estate agents MAGIC METRIC. A magic metric is the most important metric of all as it reflects how many people we have the opportunity to do business with in the short term. As agents we should always have 20 or more HOT LEADS on our board or spreadsheet. Once again, the more HOT LEADS you have, the more successful, happy, and content you are going to be. This KPI should be tracked daily.
APPRAISALS – Although appraisals are not the be all and end all, they are a great KPI to track because the more appraisals you do, the more hot leads you will discover. The reason why appraisals are not your MAGIC METRIC is because you should be doing a lot of low motivated appraisals to build rapport with home owners, get to know and see as many properties as possible, and create advocates who are going to refer your business.
LISTINGS – This is a big one because if you do not have them you simply cannot sell them. It’s like a shop without food on the shelf, you are going to go broke. So, you always need listings, but if you haven’t got contacts and haven’t built trust and rapport with home owners, you are probably not going to have a lot of business. They say, “list and last” and nothing could be truer. If you can list, you are the goose that lays the golden egg.
PRICE REDUCTIONS – This is a KPI that most agents do not track because listings are only great if they are motivated and priced right. However, another KPI of listings is grading your listings A, B, C, or D in order to keep you accountable to getting them saleable. There used to be a rule of thumb, 1/3 new listing, 1/3 ready to sell, 1/3 settling. This has now drawn out more to 1/4 or even 1/5th depending on your skill level. So, if you want 2 sales per month, you are going to need 8-10 listings in order to achieve that. Price reductions and change ups are essential to success and a change or price alignment needs to be done very 7-14 days max.
SALES – This is a critical action that needs to take place in the sale cycle in order for you to get paid, so your sales are a very important KPI. This number can also reflect your skill level because if you are not converting 50-80% of your listings to sale in a 60-day period, your skills and knowledge are simply not up to scratch. Sales pay bills!
G.C.I – Gross Commission In to the office is another critical KPI that needs to stare you in the face every day. Your GCI tells the story of how well you’ve been doing, how hard you have been working, how much you have been learning, and how much you have been improving over time. If you do not know you GCI on a weekly basis, you probably do not want to know.
AUCTIONS – This is a high level KPI that most average agents will not strive for. The reason is that auctions are a highly skilled process and is reserved for those who have heavily invested in themselves and their training to be able to deliver the best result possible for their seller. Auctions keep the agent highly accountable and if done correctly will sell the property in the shortest time-frame for the highest possible price. Selling properties in a short time-frame means you get paid quicker, get better marketing, and receive better fees because you have a plan and a strategy where other agents do not. Great agents strive for a minimum 50 % of their listings to go to auction.
ENERGY/ATTITUDE – This is one of the most important KPI’s. How many agents check in on a daily basis with how their ENERGY levels and ATTITUDE levels? After years of being in the industry, these can sometimes be in short supply. Grade yourself daily out of 10 in each category and if you are down around a 5 in either it’s time to take a break or do some training, reading, or book in with your coach.
So, as you can see, if you want to improve your numbers you should know what your current numbers are to not only keep you accountable but to be able to adjust and increase as you need to. More importantly, you are going to be able to get a clear picture of where the bottle neck or blockage is so that you can make the necessary changes.
WHAT GETS MEASURED GETS MANAGED and DONE!!!
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