RISMEDIA, June 1, 2009-When I first got into real estate sales, I copied other agents and simply hoped for the best.
I figured that I would do the same things they were doing, but better. I would return calls faster. I would do a better job negotiating. I would give better client service. All of this, I thought, would lead to more home sales. Maybe you’ve followed this same path in your business, too.
What I finally realized is that it is very hard to outwork your competition if you’re doing the exact same things they are. Why? Because we have a lot of competition.
One day I decided to change. I didn’t want to work harder. I wanted to work smarter. We’ve all heard the saying a million times, but for some reason, we simply don’t follow it in our lives. I began to track everything I did in my business, including:
-The number of leads generated from each advertisement.
-The number of leads converted into appointments.
-The number of appointments signing an exclusive representation agreement.
-The number of homes sold to signed clients, including conversion percentages.
-Your cost per lead
-Your cost per signed client
-Your cost per home sold
As my business grew, I tracked these numbers for each of my agents, too. These numbers began to tell a story about my business. I was soon able to see which advertisements attracted clients who bought homes. I was able to see which agents on my team were performing and which agents weren’t.
I was also able to spot trends from month to month. One of these trends was the percentage of leads that ultimately turned into home sales. Let’s say that, on average, you generate 100 leads a month and you typically sell around 4 homes each month. This is a trend that you can leverage going forward because you have a very good idea that you’ll convert 4% of your leads into sales.
If you want to increase your monthly home sales to 8, you would have to increase the number of leads you generated each month to 200. Or if you wanted to shoot for a massive transformation and sell 20 homes a month, you would need to generate 500 new leads, each and every month.
Using this information from my tracking, I slowly but surely began increasing the number of leads I generated each month. These new leads ultimately turned into home sales at the same percentages previously established in my business. I simply continued this process until we were averaging between 25 and 30 home sales each month.
I finally learned that one of the ways to work smarter and not harder was to track and measure the key numbers in our businesses. This tracking provides several powerful benefits, which include:
-What you measure and track has a tendency to improve.
-You’ll be able to leverage your key numbers for additional home sales.
-You’ll be able to quickly spot problems in your business.
If you are not carefully tracking your numbers, you’re doing your business a huge disservice. Would you ever go on a diet and never get on a scale? That’s what running a business without tracking key statistics is like. You’re basically guessing at what’s working and what’s not.
And that’s no smart way to run a business. No matter how hard you end up working yourself.
Rob Minton reinvented his real estate sales business to sell 269 homes to a limited number of clients in one year and has written a very practical book on how real estate agents can sell more homes.