Use KPIs to Measure Success | The Residential Specialist

Key performance indicators (KPIs) offer agents the opportunity to identify strengths and weaknesses

By Scott Mason

Data collection and analytics are essential to monitoring a business’s success and making improvements. Every industry has unique data points and sets that allow business owners to align their goals with results.

Business owners with experience in collecting data know that when you first start your data endeavor, the sheer volume of results can make it difficult to see the forest for the trees. Too much data can distract from your objectives, so experienced professionals recommend identifying a few data measurements to focus on more intently, called key performance indicators (KPIs).

KPIs are not just data points; they are tools that provide teams with clear targets and benchmarks for measuring progress and valuable insights for better decision-making. For residential real estate agents, the KPIs you choose to focus on can cover a wide array of business areas, from marketing to revenue to sales efforts. Which KPIs you decide to track will depend on your business’s needs and areas for improvement. Here, we will dive into the details to help you make these decisions.

An important undertaking

Determining which KPIs work best for your business model and properly tracking them is crucial for residential real estate agents. January Johnson, real estate agent with The Short Term Shop in Panama City, Florida, says measuring the right things with a clear goal in mind is a must. “If you can’t see it, you can’t manage it. And if you can’t manage it, you can’t move it,” she says. “And if you don’t have a goal, then what are you even doing?”

Johnson likes to set yearly sales goals and use KPIs to keep her honest in her efforts to achieve them. “I have a goal for the year of $15 million closed, which is $1.25 million a month,” she says. “To figure out if I’ll reach that goal, I track how many deals are in my pipeline, how many contracts I have right now and how many I have closed. And right now, I am exactly on track for the whole year.”

What are you tracking?

Determining the correct KPIs for your business needs and goals should be at the top of every agent’s list. Here are a few examples of KPIs that can prove to be valuable.

Sales volume

Tracking your sales volume can offer insights into the health of your business. Agents can go about this in two ways. First, they can add up the total property values for all of the properties they’ve helped sell. Or, if their real estate business is a bit more diversified, they can break it down into specific categories, like investment properties or rentals, for example, to see which lines of business are doing best and which they may want to pay more attention to.

Conversion rates

Recording your success rate in taking initial client appointments and converting them to confirmed listings can be a huge help for your business. If you see your appointment numbers are steady, but your listings are slipping, it may be wise to change your approach to better capture customers’ trust.

Calls made

Keeping track of how many outgoing calls you make can help you evaluate the time you dedicate to your business’s lead conversion stage. Johnson places a higher value on phone calls than texts or emails. “The only thing that matters is what you sell, but activity is related to that. I want to make sure that I am constantly touching the people in my warm database,” she says.

Johnson says she will check the MLS activity of her warm leads to see how often they’re using the service. “I’ll usually try to call the most active and the least active to gauge where they are in the process,” she says. This allows her to always have her pipeline filled and know when to back off from those customers who may not be ready at the moment.

Digital marketing success

In an age where so much real estate marketing is done online, tracking the success of your digital marketing efforts can provide valuable insights. Look at the open and click rates of your email campaigns and see what types of content are best attracting your recipients’ attention. If you do any targeted or pay-per-click advertising, determine from what sources you’re getting the most traffic and focus on spending in those areas to get more inbound leads.

Client feedback ratings

The customer is always right, and client feedback or ratings can help provide valuable data to determine whether your performance is up to snuff. Any downward trends you see in actual score ratings or even the volume of people leaving you feedback may require you to reevaluate the care and service you’re providing to your clients.

Income

After factoring in operational costs and expenses, agents can track their projected monthly or yearly income to better understand their financial situation. To keep her income goal top of mind, Johnson uses this number as her computer password. “Every time I have to put in my password to unlock my screen, I am physically reminded of my goal for this year,” she says.

Putting plans into action

Even with the best planning and tracking of KPIs, an agent is only as good as the effort they put into improving their business. Johnson lives this in her daily business. “People will say, ‘It’s the thought that counts,’ but it isn’t,” she says. “The thought is important, but only action matters.”