Running a successful real estate business means knowing your numbers. If you don’t have a handle on where your revenue comes from, how it’s affected by expenses, and how client and agent behavior impact the profitability of your operation, you might be in some serious trouble.
Top producers often use tools such as a CRM platform to stay updated on their business performance in several key areas including sales and service. However, CRM systems provide you with more than just your basic operating data. They can also offer insights into market trends and consumer behavior.
Here are some of the key areas to focus on and track in your CRM platform that will set you up for success.
Cost Per Lead
Figuring out how much money you spend to acquire new leads, whether they close or not, is crucial to understanding your bottom line. While a standard cost per lead will differ from agent to agent, having several months or years worth of data can help you zero in on how much money you spend to earn new business.
A simple way to calculate your cost per lead is to take your total advertising expenses for a given period (let’s say a fiscal quarter or three months) and divide it over how many leads were generated over that same period. While this won’t tell you the quality of leads you are earning, it may provide information you can use to adjust your marketing plan. Consider using social media or weekly blogging to generate leads for little to no cost.
Time to Close and Closing Rates
Knowing how much time it takes for an average transaction to close, as well as how many successful closings you have (based on your overall leads) will give you insight into how long it takes for you to convert that lead into real dollars and cents. Narrowing in on your sales turnover is important and can be a strong indicator of how well you manage your time.
If you have a slower time to close rating, this may mean you should evaluate what processes you can implement that can improve productivity so that you can close more deals faster. Furthermore, it may help you identify referral sources that provide more quality leads worth pursuing over others with tepid intentions.
It may seem simple, but you would be surprised how many agents don’t track where their leads are coming from (especially when it comes to referrals). Figuring out where your leads come from is essential to growing your business.
Not only do you want to know where the most quality leads come from, but you also need to know which sources you need to focus your time around. It may be better to develop that relationship with a local accountant who sends you multiple quality leads on a monthly basis, versus the financial advisor who only refers clients to you who have horrible credit.
Never forget about the customer experience you provide to your clients. If you don’t already do so, consider tracking how many clients review your services, and of which how many provide positive feedback. Most often than not, customer reviews can provide information about the source of referrals. A source may have received happy customers who were satisfied with your services and that is the reason they continue to refer business your way.
Zillow Premier Agent also notes that “just because [clients] haven’t posted a review or passed your name along doesn’t mean they wouldn’t recommend you. It could mean that you never asked them to – or they forgot that you did1.” Make sure to track this information so you can follow up accordingly.
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1 Quick Real Estate Statistics. (2018, May 11). Retrieved March 16, 2020, from https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics