What is a Key Performance Indicator?
A key performance indicator, or KPI, is a measurable aspect of your business that can be used to show how well you’re meeting your goals.
There are eight critical KPI’s that will help you predict how to hit your goals – and if you read to the end, I’ll share one extra number that unlocks the predictability of your business when combined with these KPI’s.
You can experiment with the impact these KPI’s have on your goals by downloading the free Big Goal Calculator below.
The Eight KPI’s
- Leads Generated
The first think you need to know in order to understand how (potential) clients move through your Real Estate pipeline is how many leads you generate monthly, quarterly, semi-annually, or annually.
- Leads Reached
Out of the leads that you generate, how many do you reach? That is, how many conversations do you have with people that express interest in your business?
- Appointment Set Rate
When you speak to a lead, how many appointments do you set?
- Appointments Had Rate
When you set an appointment, how many prospects show up?
- Signed Rate
This number compares the number of appointments you have with the number of prospects that sign a listing agreement or buyer representation with you?
- Firm Rate
This is the number of signed clients that do a deal with you.
- Average Commission Rate
What do you make on average for a Real Estate transaction? This is your total commission earned divided by the number of transactions.
- Average Sale Price
When you put all of your Real Estate deals together, what is the average sale price? This is the total amount of sales divided by the number of deals.
These numbers can help you determine how to hit your goals, but if you’re not tracking them consistently – or not tracking them at all – they won’t help you.
Tracking these numbers will help you see how your business is performing and help you identify gaps in your process.
You might be shocked to see how many lead sources you’re leaving on the table, and the amount of free business you’re missing out on.
The Hidden Number That Unlocks the Predictability
This number is easy to think about, but hard to attain.
If you can understand the amount of time it takes for a prospect to flow through your pipeline, you figure out when you need to start generating leads so that you can hit your goals.
For example, let’s say it takes 79 days for a prospect to flow through your pipeline, and you have a goal of making $100,000 in gross commission in the first quarter (January 1 – March 31). Taking into account your average commission rate, and understanding the per cent of leads generated that convert into sales, you would now know how meany leads you need to start generating 79 days before your deadline.
Combining all of these numbers will give you a clear picture of what you can do to hit your goals. With clarity comes focus.
Get Clear, Focus, Execute.
We know this process can be difficult, but we are here to help you make it easier. With Houseable, tracking these KPI’s is automatic. Schedule a demo today to see how it all comes together!