Two of the most important key performance indicators (KPIs) you could say in any business are (1) conversion rates and (2) customer satisfaction rates. In regard to tracking the conversion rates of your real estate agents, we would want to track their KPIs each steps of the way.
For example, “(1) Appointments to Listings, (2) Showings per Sale, (3) Average commission and sale price per sale, (4) Net income per sale as a total $ amount and percentage of revenue, and finally (5) A customer satisfaction or feedback score, which could also include a metric (6) Number of Referrals per client and (7) Percentage of clients who leave an online review
Key KPIs to Track
Appointments to Listings
You should be receiving leads from home sellers, and with that, setting appointments to visit their home and pitch your real estate broker services. Are you tracking what percentage of appointments become listings under you? Are you tracking the reasons why they don’t become listings? This is a key KPI you’ll want to track and understand, as it is the foundation of your agency (having listings!). As we know, it is easier to sell the one (a house) to many (buyers) than it is to find the one (home) from all the available inventory that your buyer wants to purchase.
Showings per Sale
How are you generating your showings? Tracking the number of visits/showing per sale is a great way to determine if your listing is priced correctly. If a property has been shown dozens of times and no one is making an offer then the asking price may be to high.
Days on Market
The longer a property is listed the less of a return is generated for the agency. After 80 days buyers begin to believe that something is wrong with the property. This will cause fewer bids to start coming in, or the offers that are made may be significantly lower than the asking price. Tracking this KPI will allow you to focus on homes that are at risk of staying on the market to long and make adjustments in your listing to generate more interest.
Average Commission and sale price per sale
This KPI maintains an average for the amount of commission earned per sale and the achieved selling price average. These are a good indicator of the market as it is, and helps understand where the market focus should be. For instance, if both averages begin to fall, it would indicate that sales are leaning towards the lower end of the market, or falling prices in general, and give you time to look towards the more lucrative opportunities to increase earnings.
Net income per sale as a total $ amount and percentage of revenue
This KPI measures the revenue received from sales every week, minus the costs of marketing the sold properties. This is an important KPI as it illustrates the level of commission being paid on sales, and will highlight falling commission rates very clearly. This matters, as if sales are being maintained by reducing commissions, there are severe problems that need remedy. Likewise, it also shows marketing spend, big increases here to maintain sales volumes is also an issue for the business and will need appropriate action.
Customer satisfaction or feedback score
The key to long term growth and a sustainable business is the customer experience. A low score here over time will illustrate that changes must be made in how the agents approach and deal with clients throughout the sales process. In an industry built on referrals, poor customer satisfaction scores can be extremely harmful to business success.
Number of referrals per client
Your growth is built on referrals, and this KPI tracks performance for each agent so that you can see exactly where your referrals are coming from. It can help optimize your training for underperforming agents to maintain referral volumes over time.
Percentage of clients who leave an online review
As with any metric, knowing what percentage of clients leave an online review helps you gain a better understanding of the process and know where you can target efforts to improve agent training or develop new processes to encourage reviews. In the digital world, most potential clients will search your business online before contacting you, the more quality reviews they see, the more confidence they will have in your business.
Follow Ups
Not a KPI as such, but the level of follow up contact with potential clients is crucial to your client conversion rate. Within the industry, most sales professionals will initiate follow up contact with a prospect just two or three times, however, by being persistent they can enjoy a much higher conversion rate. Encouraging your team to continue to follow up can make a huge difference to your business performance.