Performance Indicators in Commercial Real Estate Sales
A typical commercial real estate agency will have many factors of performance to assess given a standard business or financial year. It is essential that the agency sales team is tracked as to personal performance, market share, and growth. Weaknesses in the team carry across to the agency quite quickly.
From time to time during the agency business year the sales and listing activity in the marketplace will change for a variety of reasons. Some of those changes are predictable whilst others will occur for reasons associated with business sentiment and the regional economy. They can sometimes be well out of your control. Seeing those pressures and changes ahead of time will help you set new and fresh strategies for the sales team.
It is a fact that commercial real estate sales will and do happen in any market and at any time. When an agency is experiencing a decline due to poor listing numbers and slow sales, it is generally a reflection of the inadequacies of the sales team to dominate market share and attract more property enquiry. Some salespeople do not adjust to the market or the expectations of clients; that’s why they fail to rise to the top of their property segment.
Quality listings
It should be noted that a top agency in any market will usually be focusing on quality listings. The same can be said at an individual level with members of the sales team. On a weekly basis it is wise to consider and review the quality of listings within the agency, and the efforts of each particular salesperson when it comes to attracting the right levels of enquiry for those listings. Price adjustments and client conditionings should occur regularly to get momentum and traction on your listings, hence growing your commission opportunity.
With some new agencies and new salespeople, it is common to have a problem of too many open listings and fewer exclusive listings. Exclusive listings only come to the agency when individual agents are suitably skilled in property presentation and market strategy.
Top agencies thrive on exclusive listings and usually grow their market share from that base. For this reason it pays for salespeople to regularly practice their sales pitch when it comes to listing standards, methods of sale, and the types of listings.
Here are some rules that should apply to performance tracking and benchmarking within the sales team:
- The assessment of performance should firstly occur at an individual level with each member of the team.
- Track the number of signs within the local area when it comes to agencies and salespeople.
- Track the number of Internet listings for each agency.
- Monitor the number of exclusive vs. open listings for each agency.
- Track the number of close deals per week and per month within the region.
- Assess the performance of each salesperson based on commissions per deal.
- Understand the differences between ‘on market’ and ‘off market’ transactions.
- Review the time on market factors applying across the industry and with particular listings
- Compare salespeople between property types, and locations, and market share.
- Set goals and targets for each salesperson that can be related back to prospecting, meetings, presentations, listings, inspections, negotiations, and closed deals.
Any commercial real estate agency can perform well in any market providing the combined efforts of the sales team are focused on the correct property types, clients, and market share.
