Benchmarking Your Success
Mar 14, 2018
In most sales roles, your company assigns you a quota that you need to meet. However, in real estate, where agents can be independent contractors, sales quotas are actually rarely used. Instead, firms divide their expenses by the number of agents they have and add a profit to that number to achieve the performance goal that is required by each agent in order to keep the doors open.
It is much harder to create a monthly sales quota because deal flow is completely uncertain, and the amount of commissions earned cannot be gauged since each fee is different depending on the size of the transaction.
Most real estate firms do not have a sales quota. They will have tracking reports to gauge your monthly production against deals that are pending and if you do not produce at least desk cost you may be asked to leave. Therefore, as independent sales contractors, it’s up to you to create your own benchmarks and monitor results regularly.
- Make a Plan: At the start of the year, most firms require you to complete an annual business plan.
- Track Your Results: As a start to benchmarking results, you should be reviewing your plan each week and determine if the plan you created is being executed upon and if the results are putting you on the trajectory of success. If not, you should course correct accordingly.
- Year-Over-Year: Next you need to keep a record of your prior years’ performance by month, then compare those results with what you are doing in the present. This will show you if your business is growing and by what rate.
- Course-Correct: If your sales are down, then this is a real sign that you need to re-evaluate your business model and figure out how and where you can improve. This is where most sales agents fail the most. They continue to do business the way they always have and not evaluate their past performance.
Real estate is a business when truly you’re only as good as your last deal. Because we are in a business that is not consistent, it’s also harder to gauge. Yet, patterns are noticeable if you track at your results over a longer period of time.
One of the worst things you can become is a sales agent who is satisfied to do the occasional deal. We are in a business where you can find deals quickly. Everyone has a real estate need at some point, so we have a large pool to “fish” in.
However, if you don’t have a plan on how you conduct your business and monitor that plan, nor establish benchmarks to visualize your standing now and over a longer period of time– then you will become the agent that does the occasional deal. You can still make it, but your chances of growing your business year-to-year will be difficult to achieve.
Photo Credit: Alan O'Rourke Flickr via Compfight cc
Written by: Hans Hansson
Hans Hansson is President of Starboard Commercial Real Estate. Hans has been an active broker for over 33 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, hanshansson.com.