You've just started your real estate team and you're doing everything right. You're generating new leads, setting appointments, getting responses from emails, texts, calls, collecting emails at open houses, gaining more and more followers and likes on Facebook -- you seem to be doing it all right.
But your bottom line hasn't moved. Your net income hasn't budged since building your real estate team and you're not sure why. It may be because you're tracking the wrong metrics that matter most to growing your team. So what should those look like?
Scaling your sales and marketing like a software company
First, let's take a step back and understand the simple question, "how do real estate teams work?"
As a team leader, you're responsible for lead generation activities, it's why they call you the “rainmaker” after all :) What this really means is that you're the Chief Marketing Officer. You're responsible for all the marketing activities that generate leads for the rest of the team.
At this stage, your real estate team will likely have an Inside Sales Agent (ISA) or a team of ISAs. These ISAs simply act as your sales team. They're responsible for converting the leads you generate into opportunities for your agents to close.
Lastly, your agents - buyer agents or listing agents - are your closers. Your agents are not only responsible for converting deals your ISA team tees up for them, but also generating business of their own, which is often done by leveraging referrals from the deals they're already closing.
If you think about this model, it's almost no different than any other scaling business. Take a software company like Salesforce, for example:
Salesforce obviously has a Chief Marketing Officer, they also have multiple marketing and lead generation teams responsible for creating new inbound marketing leads.
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Salesforce has a sales team also. Often referred to as Sales Development Reps (SDRs) this team is responsible for qualifying, nurturing and converting the inbound leads marketing sends their way. They're also responsible for generating new leads using outbound sales techniques.
Lastly, Salesforce has a team of sales closers. Often referred to as Account Executives (AEs), this team is responsible for holding sales presentations, demos and ultimately closing the deal an SDR has teed up for them.
You can quickly see the resemblance that massively scaled software companies like Salesforce use have in common with the way you should set up your real estate team:
SOFTWARE COMPANY -> REAL ESTATE TEAM
Chief Marketing Officer -> Team Leader / Rainmaker
Sales Dev. Rep. -> Inside Sales Agent
Account Executive -> Buyer / Listing Agents
Track sales + marketing numbers together
It's important to understand the right way to build your real estate team, but why exactly does it matter?
Many problems in businesses arise because of the lack of communication and accountability between sales and marketing (or across any departments for that matter).
When not enough leads are being generated its marketing's fault. When not enough leads are converting it's the sales department’s fault.
This blame game can wreak havoc on your real estate team. This is why your entire team should agree upon metrics that are jointly shared across departments that align towards a common goal.
Here are sales and marketing metrics that both you (as the team leader) and the rest of your team can agree to focus on, making your sales and marketing efforts more successful and ultimately driving up your bottom line.
- APPOINTMENTS KEPT - Booking an appointment with a lead, be it a listing presentation or showing appointment, is something the entire team can get behind. It requires you as a team leader to generate a quality lead, your ISA to engage, nurture and qualify them, and your agents following up to ensure that lead shows up to the appointment. It ultimately turns your "have-not mets" into your "mets" which is a driving factor of success for your real estate team.
- SALES ACCEPTED LEADS (SALs) - A SAL is a term many software and high-growth companies use to track growth. So too can your real estate team. Rather than tracking the generic total number of leads you're generating per month, your ISAs and agents should report back a metric on SALs. This requires your team to decide on criterion that qualifies a raw lead as a SAL. For example, it might be that the lead is moving in the next 90 days or less and is pre-qualified for a loan. Whatever the criteria may be, reporting on SALs aligns the entire team, rather than just relying on marketing (or you as a team leader) reporting on the total number of leads generated, regardless of lead quality.
- GROSS COMMISSION INCOME (GCI) - What could be more important for your real estate team than GCI? Report on your team's GCI growth weekly, monthly or quarterly so you can see how the changes you're making to your team are affecting your GCI (as well as your other operating expenses).
What's great about these 3 simple metrics is that they can be combined to give you even more insights into the success of your real estate team. For example, you can track the average number of SALs to Appointments Kept, then Appointments Kept to GCI. Using these numbers, you can determine the spend needed on marketing or sales activities to reach your goals.
Ready to build your real estate team the right way? Download the Annual Real Estate Team Goal Planning template to understand how to track the right metrics that matter.