There are different ways to track growth and change in any commercial real estate salespersons career. KPI’s are used to do that. It should be a personal thing for each salesperson, as it has little to do with team performance.
A successful real estate team is the by-product of a group of high-quality salespeople that act on certain business building activities indicators each day. The ‘random’ approach in our industry doesn’t work. That is where the ‘indicators’ really do matter.
The Formula that Works in Brokerage
If you want a successful team, then it’s all about the individuals and how they are improving; that’s the formula that works. Help the team members to optimize their personal performance, and you will get a successful team.
There are so many different pressures and preferences for each person in a real estate team, that the personal approach is far better than anything else when it comes to encouragement and brokerage outcomes.
Some team leaders overlook the ‘individual’ approach in brokerage, and they just criticize things when property market results are falling short of requirements, budgets, or averages. That then ‘burns out’ the best people and breaks team performance. It breaks the respect and trust of those that are getting results. There are many poor-quality team leaders in commercial real estate brokerage. So, let’s go back to the ways of brokerage improvement.
Getting the Indicators Right
So, where do you start with this idea of tracking and KPI encouragement? Importantly, it’s all about choosing the numbers that reflect personal improvement given location, property type, and market conditions. When you can see improvement, you can also see changes and the impact of those in the salesperson.
Here are some good indicators to work with for starters:
- Signboards placed on exclusive listings – while it is nice to have lots of signboards in a location on properties, it is the ‘exclusive’ factor that matters with conversions. Controlling the listing stock is critical to the growth of commissions and client activity. A single salesperson can work on about 15 to 20 exclusive listings. The conversion factor of listings to a successful transaction from that will or should be at least 75%.
- Premium or enhanced internet advertising – any good quality property should always be comprehensively marketed There are ‘premium’ packages to do that. If the property is one that should attract local interest from investors, business owners, or tenants then ensure that the listing marketing is enhanced.
- Advertising dollars paid – this is a vendor or client paid marketing. Over a period, the growth in listings should be supported by growth in marketing monies. The best way to track that is in a monthly comparison.
- Commissions earned per transaction or period – when you have salespeople working on better properties and in better areas, the commissions per transaction should go up. That then means less work for more commissions; it also means better enquiry for those properties that the tenants and buyers of the market are looking for. It is a logical and important equation to optimize.
- Assessing sales or leasing listings by primary territory – don’t assess listing numbers from all and every place. Every salesperson should have a primary zone of focus, and that is where most of their business and client activity should come from. That is where listing numbers should be assessed and improved.
- Call numbers and meetings per week – it is a people-based industry. Getting in front of new people is important. Simple numbers tracked will help any agent get results over time.
These simple factors of assessment are valuable in helping every agent and broker improve their activities. They are the KPI’s that work in commercial real estate brokerage.