KEY POINTS:
1. Have a Goal
2. Leading vs Lagging Indicators
3. Key Leading Indicators:
a. Leads
b. Appointments
c. Face-to-Face Meetings
d. Closings
4. The Process
5. Why Does This Work?
6. Take Ownership
7. Commit to Your Goal
The secret to hitting any goal you can set in your real estate business. It might sound cliché, but it could not only be a game changer, but a life changer
So this is something that hit home for me this week. The secret to hitting any goal you can set in your real estate business. It might sound cliché, but it's not just a game changer. This can be a life changer. It's a missing component to almost any sales business, honestly, or any goal that you want to accomplish. But most importantly, in the sales realm, it's easy to get a handle on this for a minute, and then forget and just have attrition occur. Without this, there's a lot of errors and decisions that happen and for me, anxiety. Because I'm always super ambitious but if I don't have clarity on whether or not I got the thing done or did all I could for that time frame, I just walk around feeling unaccomplished and like I'm always missing an opportunity.
I don't know if there's a lot of agents out there that operate like that, that feel like that. Especially until you get to the level that you want. But for me, this was huge problem. I couldn't be in the moment, almost at all, anywhere. Because I was constantly thinking about the future or what balls I dropped or what I missed. And when I talk to older agents who are very successful but who have slowed down a bit, they still can't get out of this feeling like they have to work around the clock, 60, 80 hours a week, seriously.
HAVE A GOAL
First off you have to have a goal. You got to have a goal. You got to reverse engineer from where you're trying to go. If you don't have a goal, you have to figure out what you're trying to accomplish. Take some time on that because once you're clear on that, the challenge is if it's too far in the future, it can be hard to deconstruct it backwards and not tell yourself a story because guess what, we are in the business of real estate and you don't have a manager unless you're on a team. And even if you're on a team, you don't really have a manager in a lot of cases. I'm going to show you what to do today as far as getting to the goal and knowing that you did everything you can to get there.
LEADING VS LAGGING INDICATORS
KPIs (Key Performance Indicators) can be categorized into a couple different categories: lagging indicators and leading indicators. More simply put, the outcome and how you're going to attain the outcome. The problem is, that most everybody focuses on lagging indicators. For example, if your goal is to sell 48 houses this year that's 4 a month and you're only focused on the 4 per month, it's hard to control that because you're only constantly thinking about what the outcome is, versus how you're going to attain the outcome.
Another example being, if you're going to chop down an oak tree out back and you know it's going to take 150 whacks with an ax to chop it down. And your commitment is to do at least 10 of those a day every day. That's the leading indicator. Whether or not you've hit those 10 strokes every single day. And if you were sick or you didn't make it, guess what, you got to double it up next day if you're serious about hitting your goal. And there's a lot of leading indicators in the real estate space and there's a lot of things to pay attention to.
Personally, for me, because I was not this sophisticated back in the day. The only leading indicator that I really looked at was the amount of leads that I brought in. And then after a while, I started to switch from that. Not even switch, I added on top of that the amount of buyer's agencies that we would have every week. And then, of course the amount of listings. So in our Monday morning meeting we had a big pillow full of cash, right? Because I loved Richie Rich as a kid. And if you had two buyer's agencies you could pull out and they were all denominations. People would pull out a dollar, 100 dollars, or 20 dollars, whatever. And everybody would talk about their buyer, what they had, what they were looking for, and their listing obviously they would kind of pitch it to the team, like, "Hey here's what I got. It's going to be hitting the market this day." So we get a jump on it.
But the point is, those were leading indicators and the ones that we're going to dive into right now are much more sophisticated, better, and easier to track, and more accurate.
KEY LEADING INDICATORS
So when you login to our dashboard, it's pretty clear of the big numbers. There's how many leads have come in. Of those leads, how many got set as appointments? And of those, how many are we now working with? What the idea was, because we're all so busy, was to make it like a dashboard of a car. You glance at the dashboard of your car. You need to know what speed you're going, how much gas you got, and if there's any red lights, blinking things, something messed up.
LEADS
Without the lead side, it's impossible to have a good leading indicator in your business, period. And there's all kind of places to get leads. You should have leads and they should be a direct response, like somebody raising their hand to you saying, "Hey I'm over here. I'm looking to buy a house, sell a house in the next blank amount of time." If you're going with leads, how many leads per month is going to be very important. Because you're going to need that watermark to know how many leads you need in order to get to X amount of deals per month. Once you've got that really simple formula, now you can crank things up. Obviously if you continue to do the same activities, theoretically you should be able to spend twice as much money, get twice as many leads and have twice as many closings, but there's more to it than that, right?
When I was doing the door to door thing, we had something called "Ace." So it was like the only way to have a consistent predictable end result was by having the same attitude every day, being consistent in what your pitch was, and having enough exposure, so enough of a sample size. And if you did that every single day, your pitches you could get down to a science. So if you pitched 200 people in a day, you knew you were going to have 20 sales.
Well, and there's multiple pitches and this is why it's so hard because it's like, well, do you track the amount of listing presentations you gave or do you track the amount of up to bats that you had as far as the phone calls are concerned? Or do you track the amount of conversations you had? So I want to make this really simpler because the simpler we make it, the more sophisticated it actually is according to DA Vinci right? That was his quote.
What happens is, at the end of the day, you just don't know whether or not you hit the mark if you don't have good leading indicators to say, "Yes, I did all I could today." Even if your goal was X and you got almost there, it's still okay. You measured. You monitored. You tracked. You had a plan and you went to accomplish that.
And I think that the hardest thing for me... When I first took the personality test it was an ABA for Keller Williams, they said that I walk around discouraged all the time. And I was like, "What? I'm the most positive guy ever." They're like, "Well, you never celebrate your wins." That's because I never knew when I had wins. So I was just always looking at the lagging indicator of the sales, and it was like, "Yes, we had a good month, but that month's over so time to make the donuts again." There was never a point to celebrate because I didn't have good leading indicators and honestly, for my agents, I would try to inspire as well as kind of like put pressure on. But I never really knew how to do this for them either. Be like, "Hey, once you've done X, regardless of the outcome for that day, you are accomplished. You've done what you needed to do. And if you do that consistently enough, like the example that you gave, it will result in an outcome. And that outcome will give you the watermark to measure to know. So we're starting with leads.
APPOINTMENTS
The next thing is appointments. How many of those people were you able to connect with? Which if you're making your own calls, which means you're not on Market Maker, then that would obviously be more conversations which would be kind of the watermark. The conversations of people who are interested in making a purchase or listing.
FACE TO FACE
So from there, the next thing would be face to face at that point would be for me, giving a listing presentation or signing them up to buyer's agency. The reason why I started to track buyer's agency is because I had read an NAR stat that 80% of buyer's who sign a buyer agency bought. But we were so damn good at getting people to sign buyer's agencies that it was not anywhere accurate. Because I'm like, "Boom! I got the formula. If we just get all these people to sign buyer's agencies. If we get 50 of them in a month we should have 40 deals because 80% of them are going to buy." No, it didn't quite pan out like that.
THE PROCESS
Every single part is your sales funnel. So if you went through and said, leads, appointments, face to face, and your closing. Each one of the spots in between there's a process to take it from this person to this person.
The ability for anybody to jump on with a cold lead or a warm lead that has filled something out, a lead and turn them into an appointment. There's a skill set that's there. We found this out majorly that there's a major skill to take a phone appointment and turn it into a face to face. And it's not even... it is a skill but it's really just like asking.
Activity knowledge is what it is. It's just asking them to meet with you. But it's also... The dichotomy in the space is agents are used to converting sign calls and people asking about a specific property because it's very intuitive. You don't have to have a predetermined kind of a pitch to get them from that to a possible customer.
It's just like, "Hey would you like to see it?" "No." If you're like me, you'd be like, "Well, do you want me to try to find something else for you?" It's very intuitive process, whereas getting somebody who's earlier in the process, you have to be able to understand where they're at, understand their customer journey and talk to them in terms of what they're interested in, because they're certainly not interested in you yet, in order to get them into a face to face and then ultimately turn them into a client.
It could be perfect math. It could be 100 people coming in here. And of the 100 you set 15 appointments. Of the 15 appointments you get 5 face to face and of the 5 face to face you get 3 closings. Awesome. Great job.
Really what you're doing is you are vetting out a success system that never fails for yourself, you're mastering that system and then the next step is obviously delegating it. And the cool thing about delegating it is you are so convinced in the process because you've experienced it that when you communicate it to another agent, especially an agent that doesn't have a lot of negative habits or preconceptions, they just run.
WHY DOES THIS WORK?
So here's the magic trick. Especially when you can just nail it down to four numbers. Four numbers that drive all your business. The problem is most people focus on the closings, which is the lagging indicator. It is an indication of what you did previously in order to accomplish that and the problem with that is by the time you realize you didn't do the activity because the lagging indicator of closings isn't there, it's too late. This is where that commission roller coaster comes in and people have such a tough time making good decisions in their real estate business because it's hard to invest in anything. Because all marketing is pretty much static as far as a fee is concerned. You go in and buy a billboard they're going to charge you every month for it, just as an example, and if I've done a few things and it didn't immediately get me a closing but then six months from now, I have four scheduled closings in a month and I don't even remember where those people came from. It's hard to go back and look and be like, "Oh, that was working, man. Why did I stop that thing?" And then now you got to wait another however many months before that started working for you.
What happens when we're not tracking these things, we just kind of shoot from the hip on everything. And so for most agents, I doubt a lot of them even have a separate bank account for their commissions to treat it like a business. They get their commissions. They throw it in their own bank account. Well guess what, when that's your money you're not going to be wanting to go back and throw it in and invest it. You should have a separate bank account for your real estate business, even if you're on a team, period. And with that, you should be able to know comfortably where to invest, what you need to invest. And the challenge is, when you're doing things shooting from the hip, like maybe monitoring your profit and loss by looking at your bank account, like how much went in and how much went out.
And that's why it's so easy for old guard agents that are just out there that got a lot of business because they've been doing it forever, to beat them, because they don't know these things generally speaking either. They don't know what's working in their business or why or how they're able. They just know that they have a consistent level of business every year and it just kind of comes and it's the old.... Been doing it so long that I been doing it that it just kind of works, type of thing. But when you get scientific with it and you start to measure these things, then you can really dial stuff in. You can dial things in to a point where you can grow so fast, so quickly and know exactly why you grew that way and how to again, duplicate it and multiply yourself through others. And just scale this puppy as high as you want to go. It's like being Babe Ruth, like, "I'm going there. I'm calling my shot."
TAKE OWNERSHIP
And when you have the baselines of each conversion percentage, if anything falls off, then you know where to go look and fix. It very rarely is the quality of the leads because if you got 100 leads coming in, you only expect 3 to buy. You're expecting 97 not to buy right now. You would be crazier to think every lead when you're talking to them is going to be a really good one, then somebody that's not going to do something for a while or ever. I just want to unpack that real quick because most of us don't want to look internally for the answer. We always want to look externally. So like, "Oh, well it's this thing out here that I'm not in control of that is dictating my outcome and my success." If I had a customer that didn't do business with me and went and did business somebody else that I had been working with. What I would tell myself is, "Oh, they're just a jerk." Instead of looking internally, like, "Hey, what could I have done differently to provide more value to them to make sure that they looked at me as really the best choice for them to do business with above going to that other competitor?"
Once you start thinking like that and taking ownership and responsibility, and looking internally for the answer, which it's not always going to be, you're going to be able to get farther faster.
It's a pride-swallowing kind of activity. And sales because we're in sales we deal with a lot of rejection just naturally. Even sometimes we don't even realize we're dealing with rejection, we just do. I think that we have this internal protection mechanism. We want to protect ourselves from facing the reality of that. The challenge of that is you're not going to get better. But you learn a lot. A great practice is, if there's an agent in your market that you want to beat, you should be surveying their clients as soon as they close. Especially the listings. Like, "How did you choose that agent? How was your experience?" And just call them up. "Hey, doing a local real estate survey, saw you just sold your house. Just had a few quick questions if you wouldn't mind about the process. How did you go about choosing the agent that you chose?" Insightful information if you're trying to come after someone and beat them. And especially if you lose a listing, call them back. I always knew why. They'd be like, "Well Mike, you were really hungover in our meeting" And I'd be like, "ah you know, I could have done better there" and then adjust for the next client. Now that's a silly example, but you get the point.
COMMIT TO YOUR GOAL
So with these numbers, if you can get into a habit of focusing on the front half of this and so... Like I did an exercise with our sales guys where I had them tell me what they're monthly goal was, why that was important. They had to write this down. Why? What happens if you don't hit it? You should have some pain if it's a real goal. And then what's your bare minimum. Like your actually built in alarm that if you fall below this, you start freaking out. And so I had them do that and then I had them break down and reverse engineer the numbers for both of those scenarios. Hit their goal and their bare minimum. Have them take an average of so far this year and where did everybody land up? In between. Which makes so much logic sense.
Because it's not in 911 territory, but I'm looking at things on on a monthly basis so there's a couple days where I can let it slip. So if I needed to have three conversations, like appointments, that day, and I had two. It's only one. But the compound effect of that is major. So like going back to what you said at the beginning, if you got 150 whacks to knock down a tree and you commit to doing 10 a day and there's a day that you're sick, the next day you got to put in 20 if you're serious about the commitment to knock that sucker down in that time frame. If you're not, well then here's the deal.
Three things, the first thing is that most people make exactly what they think they're worth. They have a "must" number and they generally don't go above that, no matter what the external circumstances are. We could throw more appointments. We could throw more this. We could thrown ore that. Generally speaking, they have a number in their mind and they're okay with that number. And then they'll make a goal which is like five times that. Which they know they're not going to hit. And so the hardest thing is to wrap your mind around being worth more. And the ways that I've done that are getting around people who make more, that's the first one.
Step two for me was something I mentioned in several times in the past, but writing down that number and looking at it every night before you go to bed and every morning when you wake up because your brain will subconsciously pull you towards the activities, the things you need to study, the peer groups, in order to get you to elevate to that status.
And the third, and most important, or equally important anyway, is to make it an attainable goal. Don't just be like, "Oh, I'm going to make a million dollars," and make that your goal. You're going to be disappointed. When you go...Like I was telling her, when you go to the gym, you're not just going to jump and start bench pressing 200 pounds. You go to to start with the light weights. And number one you got to show up. You got to make a new habit in your life to show up.
WRAPPING UP
That's what this boils down to. The leading indicators are about having trackable habits that you know at the need of the day, whether or not you got to the outcome you wanted, you are accomplished. And for me, Jake, that is still something that eludes me on a regular basis. And I do still walk around feeling like I didn't get enough done and I needed to do more. But in real estate, I always call it realtor PTSD. I couldn't be at a function. I didn't have a family back then, like my own family. I couldn't be at a birthday. I couldn't be on vacation without feeling this guilt like I'm neglecting something. But having these habits and having these leading indicators that I want to go over again, the exact leading indicators because I feel like we could do that two or three or times just to drive the point home.
But at the end of the day, when you're done doing X, Y, and Z, which is now becoming your new habit, your habit of success. You know that you did everything you can. And when you're done, you're done. That's it. You get to go home and feel accomplished. I think it's so hard because in real estate, there's so much crap we can do and there's so much busy work and there's so much cleaning the desk and taking up time.
And the process from exposure to the client and closing a deal is so delayed that if you don't have these habits in place and you don't know exactly what you need to set out to accomplish on a daily basis, and what to track, you're going constantly be wondering what's happening instead of making things happen and that's not a good spot to be in. It just does not feel comfortable, especially if you've got financial pressure on top of it. Especially if you haven't hit the level of success that you think that you should or think that you could more importantly, then you're just walking around all the time like with commission breath.
For lack of vision, the people perish. That's a Bible verse and I just agree wholeheartedly with that. So you got to have the vision first and you got to make it something that's attainable and start with even the littlest personal discipline. They say making your bed changing that habit everyday is a strong one. But as far as real estate, let's go over these one more time.
So, number one: the amount of leads that you have. Now this isn't on a daily basis. If you look at a daily, it's not going to be very beneficial, but if you look at it on a 30 day average, going to help. It's going to help tremendously.
Numbe two: the appointments that you set from those leads, how many people you get face to face with, and then how many closings you have.
Number three: How many face to face appointments? How many listing presentations did you give?
Number four: Of those, what is your conversion rate to get somebody to list with you.
I always ask people whenever we're getting people's goals. "Okay, what's your goal? For the next 12 months." Sometimes they have the next 3 years. So I want to make a million bucks. If you're doing 50 grand right now, not a good 12 month goal, but maybe a good 5 year goal. Three year goal even, could be attainable. But there's going to be a lot more that you have to invest into yourself to learn to be able to become the person that's going to be able to accomplish that. If you're going to multiply yourself through others and grow a team now you've got to get some skills in management. There's a lot of management skills that you don't possess that you don't know that you don't possess. So you're going to have to start to research and sharpen and study.
When you deal with humans, you've got to be able to talk to them properly, motivate them properly, you got to be diplomatic and most importantly, you got to give them a plan for success that can actually work. Because you don't want to waste somebody's time or livelihood.
I'll break it down real quick. Let's say... Because we were just doing this, we were going to do the calculator. If somebody wanted to make another 100 grand this year in addition to what they were making and they wanted to do it from online lead generation. Average commission was like $7,000 something on $246,000 average sales price nationally times 3% it was like 7,000 bucks. 7,000 divided by 100 grand is 14.33 transactions which is just a little more than one a month.
If you had 100 leads a month and you had a 1% conversion ratio, you would get 12 transactions which would get you darn close. You'd probably need about 120 leads and I'm shooting from the hip. At a 1% conversion rate, in order to achieve that. So of that 1% conversion rate, now because there's 120 leads coming every month, you need to be able to sift those suckers to get to just the people who are worth talking to right now which would be the appointments.
Of those appointments, you need to sift and sort those people of the people who will actually meet with you face to face and you go to have some skills and some benefits for them to meet with you face to face, because they're not just going to get in their car and drive over because you said so. You got to give them some benefits.
But of those people, that you meet with, then X amount of those people are going to become clients and that's going to turn into that 1%. And off to the races you go.
And listen, if you'd like some help with these things that's what we do here. We'd love to help you. We want you to go to marketmakercall.com watch a short video on how this works, how we generate these leads for you, nurture these leads in a way that elevates your status of authority, and then ultimately, drops them on to your calendar as an appointment so that you can track these things that Jake is talking about on a regular basis, have a goal and have a plan to hit that goal with leading and lagging indicators. If you want some help with these things, go to marketmakercall.com that is marketmakercall.com.