Tracking performance is key to improving it – so which KPIs count the most when it comes to real estate? As a principal or manager, one of your most important roles is to set team goals that will drive business success.
Real estate is a unique industry, agents operate on commission and are highly motivated to make sales – this means KPIs don’t have to focus solely on revenue generation. So how do you set benchmarks for your team that will help them track and improve performance?
According to renowned real estate and business coach Michael Sheargold, there are a number of core key performance indicators that will help agents increase productivity and hit their sales growth targets.
1. Client communication targets
The first hard and fast KPI Sheargold believes agents should live by is to make a minimum of 120 calls per week to contacts and potential clients. “You can make 60 calls per day over two days, 40 calls per day over three days or spread your calls out over the entire week, but you have to make those calls,” he says.
This legwork will lay the communication foundation and feed the ‘pipeline’ of future buyers and vendors. “An agent might have an amazing month full of wins, but if they don’t have the next round of customers waiting to come out of the pipeline, listings will grind to a halt,” Sheargold says.
2. Client feedback ratings
As a principal, you need to know that your brand’s reputation is protected. When it comes to KPIs, a high rate of customer satisfaction with your agents’ service is non-negotiable. “Your agency’s ongoing success depends on the next round of business, not the houses that have just sold,” Sheargold explains. “With positive word of mouth remaining one of the most powerful referrers in real estate, it’s important to ensure your customers are giving you good feedback in the marketplace.”
To gather customer feedback for your agents, set up a short survey to send to buyers or vendors after they have bought or sold with your agency. Let your staff know that you expect them to receive more positive feedback than negative as part of their annual KPIs.
3. Networking goals
A good place to start when setting KPIs for agents, particularly junior staff, is to set goals around networking to help them build a relevant contact database. Sheargold suggests focusing on a core network of around 20 people who work in industries connected to real estate. This can include mortgage brokers, tradespeople, architects and buyers’ agents. These suppliers will be able to refer business to your agents, and your agents can return the favour when appropriate.
4. Listings targets
It’s difficult to set a goal for an exact number of houses sold in a year due to the unpredictability and fluctuations of the market.
An alternate KPI can be to win a certain percentage of listings as a result of meetings with potential vendors. Creating this kind of goal will force an agent to look closely at how they can improve their sales pitch.
5. Personal marketing activity
An agent might be cruising along through word-of-mouth referrals but not doing enough to actively seek new business. Structure some goals around self-promotion, including building a social media presence and creating market reports to make sure they’re adding to their vendor/buyer pipeline from all angles.
Strategically positioned and well-executed marketing will not only help build your agents’ reputations, it will have a positive flow-on effect for your agency as a whole.
The final word
Michael Sheargold is quick to stress that real estate agent KPIs should not be a one-size-fits-all model. While junior agents will need more structure and hand-holding, highly self-motivated and experienced operators will already have an idea of where their strengths and weaknesses lie.
As a principal or manager, plan to sit down with each agent and work together on which benchmarks they’d like to set for themselves. By gaining their active participation in the KPI process they will be more invested in the goal outcomes – both theirs and the agency’s.