In order to set your business up for a successful 2021, it’s critical to first understand how your brokerage performed throughout 2020.
Understanding your past performance goes well beyond transaction volume, sales volume, gross commission income and agent count from 2020. Of course, these are important KPIs every brokerage should be looking at, but how you dig deeper into these data points to analyze trends is what will set you up for future growth and success.
Consider how you’re looking at your transaction count and sales volume. Although they may show an upward trend, you should analyze if your agent gross commission income is following that same trend. If not, how you forecast your goals for 2021 should be adjusted.
Are there certain months where you’ve hired significantly more agents compared to other months over the past few years? The same question can be asked about agent attrition. Planning a new promotion or mixing up your marketing efforts in a given month or quarter can potentially reverse a trend or create a double-down strategy for your brokerage. These factors can create opportunities to set more aggressive goals in 2021.
Just as important, don’t get trapped only looking within your company. How your market is performing around your brokerage is an important indication of your success. For example, brokerages often feel they’ve had a great month because they increased volume or transaction counts by 20 percent year-over-year. If your market is increasing by 30 percent, this is a leading indicator that trouble may be brewing—you’ve lost market share during a growth period.
After you’ve analyzed your 2020 performance, ask yourself what market share growth and percent net income you’d like to see for your brokerage in 2021. Once you have these in place, setting your 2021 targets is a breeze. You can then segment these goals into quarterly and monthly targets and put proper tracking mechanisms into place for all.
Utilizing the technology that you’ve invested in to gather these numbers will help you track these metrics. HomeSmart works with its franchisees to create all the tools needed to properly evaluate past and future performance, providing data dashboards and reporting options to cut back the time it would normally take to go to each vendor and pull all the separate reports for transaction management, MLS, CRM, etc. Instead, they can instantly download the year’s number of sales, average commission, average sale price and other numbers they need from individual agents, teams and the brokerage as a whole.
If there is one take away for how you should go about your process for planning the new year, it’s to please allow for pivoting. If you find that you blow through your Q1 targets, adjust the rest of the year accordingly. Maybe a 15 percent growth target was too conservative. The same goes if you miss your Q1 targets. You’ll need to adjust up for the rest of the year and put new strategies in place to get things back on track.
Michael Swope is the chief revenue officer at HomeSmart International, responsible for leading HomeSmart’s corporate brokerages, agent recruitment efforts, service teams as well as business development for HomeSmart’s Affiliated Businesses. For more information, please visit homesmart.com/join.