This week we are going to talk to you about Hard Key Performance Indicators (KPIs). Hard KPIs are significantly more important than the Soft KPIs we discussed last time. These are the numbers you can’t hide from.
The Hard KPIs in your real estate career are your foundation: Total number of listings, the number of sales you’ve made and the amount of income that you produce. When looking at your hard KPIs it is important to first understand how much revenue you need to write per month and then break that profit down into a 10-month calendar.
The reason why a 10-month calendar is important is that it gives you eight weeks of holiday per year for rest and renewal.
How to work this out: Let’s for example say you have a target of $500,000 in gross fees and you divide that target by 10 months. That will show you need to do $50,000 in revenue per month. Next, work out what your average fee needs to be from a dollar perspective: Let’s say for example that your average fee is $10,000. That would mean you will need to do a minimum of five sales per month.
Now, we know you need to list more than you’re going to sell, so to do those five sales you will need to list around seven new properties every new month. If you’re listing seven and selling five you will generate your target of $50,000 in income.
You should also be reviewing your Soft KPIs every day, including your numbers of calls, connections, and appointments you have made. You should also review your Hard KPIs around their listings, sales and income for your target versus actual. This is critically important so that you know when you are on track to hit your target, and where to focus if you are not. It is also important to know the numbers around stock and transactions for your existing marketplace today to determine whether or not you should be operating in a secondary marketplace as well in order to hit your target.
If you don’t know the numbers in your marketplace, you can’t achieve market share and get the total number of listings, sales and income that you deserve to write this year. Review those Hard KPIs daily, make sure you’re on track for success, and remember, there are only three ways that you can increase your income: One, increase your average sale price; Two, increase the total number of fees and the amount of your fees, and the third thing you can do is to increase the volume of properties you sell.