RISMEDIA, January 16, 2010—Setting goals is one way that real estate professionals hold themselves accountable for achieving certain milestones throughout their career. Here, Scott Dixon, President, Real Estate Division of Network Communications outlines the four steps you need to follow in order to achieve your income goals this year.
Written goals are five times more likely to be achieved. Recently, our team researched the marketing habits of top agents—those that have a real system that works to reach their income goals.
Based on this research and 30+ years’ real estate marketing experience, Sr. Vice President of Sales & Operations Todd Walker and I developed “The Income-Based Approach to Real Estate Marketing”—a practical guide to achieving your income goals.
• Start by asking yourself: How much do I want to make?
• How many homes will I need to sell?
• How many leads will I need to generate those sales?
• Based on this, how many quality leads will I need to achieve my goals?
Once you write down these goals, you can work backward through the necessary steps.
Step 1 – Set your target income. Pick a real number and consider factors like the type of homes you sell and how much you want to work. Are you part-time or full-time?
Step 2 – Determine the average sales price of your typical transaction. Do you serve first-time home buyers? The luxury market or some other geographic or lifestyle niche? What is the average sales price for each transaction?
To help, we created a workbook and series of spreadsheets. Download them from www.realestatebookmediakit.com/income.
Example: Your objective is $100,000 and average transaction is $238,000. If your commission net of broker split is 2.4%, you must sell 18 homes (1½ per month) to reach your gross income goal.
Thirty-five homes at this price would net $200,000 and 53 homes (one per week) means $300,000 in commissions.
Step 3 – How many qualified leads do you need? Leads are a science starting with a business activity of which a percentage ends in a closed transaction. Business activity generates leads. Leads turn into prospects. Prospects become clients.
Conversion rate is the percentage of leads who become clients. Research indicated the average conversion rate from lead to closed transaction is 5%. For most agents, one in every 20 leads resulted in a sale.
From our earlier scenario, this means that to make $100,000 you need 350 leads annually (29 per month) with a conversion rate of 5%.
Step 4 – What sources generate enough leads to reach your desired income? Think of leads in three groups: personal leads from contacts, past clients and referrals; brand leads from association with your broker or company; and marketing leads created from an investment of time or money.
Track your average personal and brand leads against your total lead goal and the difference is what your marketing efforts must generate.
While there have never been more marketing options available today, the best measure of a source is not the initial investment, but the investment per lead.
Example: Free options may seem to have a low initial investment until you apply a value to your time. Even free may not be the best investment if it is not progressing you toward your goal.
Top agents use multiple media channels and don’t rely on any single one to accomplish their goals. They meticulously track results to costs and dial up or down their investment based on return. Any quality marketing partner should be willing to provide tools to assist in this analysis.
Setting goals now creates a cumulative lead effect that will only multiply as the market continues in its recovery.
For more information, visit www.realestatebookmediakit.com/income.