In commercial real estate brokerage, the sales team needs a plan. From that plan they can look at factors of performance and growth in both the team and with the individuals. The issue here is that they can then know when they are on track to the income targets and listing opportunities required.
You would think that the issue was logical, however most real estate brokerage businesses don’t track performance and encourage results very well at all. The individual skills of the people within the team are not usually worked with and shaped. All salespeople are different and that fact should be remembered and built into the team strategy.
A real estate team without a performance plan is ‘lost’ in so many different ways. As the property market changes, a plan can and should be adjusted; each year the real estate market will change and fluctuate with inquiry, listings, finance, and competition.
Look for Changes in the Right Places
When you see a change locally in property market conditions, you can alter activities in prospecting, marketing, negotiating, and listing; they are the ‘front end’ elements of our business that are largely impacted by market pressures. When you change the ‘front end’ responses, the resultant commissions will also change, but it takes about 3 to 6 months to really see and feel that the shift in strategy has been effective; that is the ‘lead time’ to watch.
Results and Alternative Indicators
So a high performance sales team will be producing results in many diverse but important channels of real estate business. Those channels can and should be established, grown, and tracked. Here are some of the most important segments, and key performance indicators to establish in this way:
- Territory specific – track numbers in defined zones and compare yourself to individual sales people internally, by zone, property type, and by commission type (sales, leasing, property management). Look for the top performers in the market, and understand why they are attracting the business so prolifically. Some positive factors of personal performance can be strengthened and practiced.
- Property type selections – certain property types will be more active with listings and inquiries. That property group should be at the centre of your teams prospecting model. Explore the trends in your market and make sure you are tapping into the right segments.
- Growing relationships and leads – understand who are your good clients and why that is the case. You can then service them to a greater degree and with more specific services and or listing feeds. The team can service the good clients comprehensively.
- Database size – on a person by person basis, a database should be compared and shaped. The database itself should have special marketing systems integrated into it using direct mail, email, brochure despatch, and networking. The VIP segment of your database should be specially treated with relevance and frequency of contact.
- Signboards placed – a local signboard count is a valuable process to undertake on a monthly basis. The best way to do that is via a ‘territory drive’ on a Sunday morning when few people are around. Look for the competing listings, the new listings, and compare numbers by brokerage, by agent, and by listing type (open versus exclusive). Look at the signboard counts for the team. Is it growing or is it static?
- Listings by type – exclusive listings are the ‘pinnacle’ of our industry. When you have more exclusive listings, you have some properties that you can work with and shape over time. You can build a base of market share from ‘exclusivity’. That listing rule cannot be ignored.
- Linking extra services – some agents are very aware of the opportunities to ‘on-sell’ further services across sales, leasing, and property management. A business lead or service generated in this way should be subjected to a fee or commission split for the initiating agent.
- Referrals found – one deal can lead to another if you ask the right questions at the right time. As one transaction comes to a successful end, ask about the ongoing relationships that may be required or serviced, and look for any other referrals that can be given to other investors and or business people. Use the good clients that you have now to feed you into other market segments and business relationships.
- Property size – when you look at the size of the property involved in a sale or lease, there will be indicators to show you what property size is doing for you in commissions. Soon you will see the advantages of working with bigger properties in better locations.
- Commission size per transaction – this is an interesting number to watch. As the quality of a property transaction lifts then the commission will also lift; that then highlights the necessity to watch how you work with some clients and properties.
- Commission totals – the team should have a budget that is based on reality. That reality should take into account the skills of each of the team members, the market trends, and competitive pressures. Some sales teams in commercial real estate have sales commission budgets that are overly optimistic and therefore unrealistic. There is no point in setting up a financial target that is well off the mark even from the very start. Remember that during the year it is likely that some team members will move on, and others will leave the industry. Commissions come from competent real estate people working to a plan of new business and client service.
- Repeat business – a good sales team covering investment property sales and leasing will have a component of repeat business coming back in from VIP clients and larger investors. It is worth considering this number and then growing it as part of a client strategy.
- Sharing information – a successful sales team will share leads and work cooperatively. One piece of information can be used to advantage by different people in the team. Make sure that the team is sharing the right information and that any leads converted across different team members are suitably rewarded.
- Marketing – look at the numbers of adverts in the local paper, and then do the same online. Look at your sales teams share of the total adverts. A good sales team will be converting vendor paid marketing. The marketing profile of the business will also be higher than the average real estate business.
Get this sales chart for brokers to help you team focus: