Keeping Score With the Right Metrics
Winners keep score but in investment sales, with such a long sales cycle, choosing the metrics can be difficult. Tracking, measuring and analyzing activity is crucial for Brokers because it helps to calibrate performance. Like Ravel’s Boléro, the sales process constantly builds to its crescendo and each successive step on the tracking ladder shows an increased ability by the Broker to move the process forward.
In addition, it allows a Broker, and his/her manager, to identify points in the process where the Broker struggles and this recognition can help the Broker improve. Here are the most important metrics for Brokers to monitor.
Dials: This is the easiest metric to track and the purest measure of activity. Every time you pick up the phone and dial a number count it as a dial regardless if it is a wrong number or if no one picks up.
Answered dials: This metric builds on dials and indicates whether the call is picked up and if it was the correct number. Brokers often have to dig deeply to find correct numbers and the delta between dials and answered dials measures their efficiency.
Contacts: This measures the ability of the Broker to identify the owner and get past gatekeepers. The call may go well or poorly but when a Broker makes contact with the “right” person it is a success.
Rent rolls: When an Owner sends a rent roll he/she is expressing rising interest. Of course, if the Owner essentially sends you a setup the property has probably been shopped around. In any event, this indicates a significantly higher level of engagement by the owner and is a positive sign.
Appointments: Like Brokers, Owners are very protective of their time. Therefore, when they schedule appointments it is because there is some interest in mind. It is important to recognize the importance that face-to-face meetings have on relationships and to prepare accordingly.
Listings: During this step the Owner authorizes the Broker to sell the property. This can come in different forms (off-market or exclusive) but is a deeper expression of interest by the owner.
Negotiation stage: Extending offers and counter offers is when most Brokers begin to sense a deal. When an Owner receives an offer he/she has three choices: accept (unlikely), decline or counter. Never confuse agreement on price with a deal. A high percentage of deals fall apart even after the price and some of the basic terms are agreed upon because of both the complexity of New York City real estate and human nature.
Hard contracts: Brokerage is a long sales cycle and hard contracts have an incredibly high close rate. Thus, monitoring hard contracts lets a Broker gain a quicker snapshot of his/her business than waiting for the closing.
Closings/income: All of the other measurements lead to the final, seminal metric: Income. In competition there are winners and losers and Brokerage is no different. Income is the one number by which Brokers are measured.
While all metrics are important every Broker has different ratios. Some are high volume callers while others have very high conversion rates. When a Broker understands his/her personal metrics and income goals they can then create an activity schedule that will enable them to achieve their goals.
There are myriad reasons deals fail but it is important that as a Broker you understand your strengths and weaknesses. That way you can ensure that you improve every day by improving your success ratios!