It is a good idea to keep score in commercial real estate, so you understand where you’re heading when it comes to listing conversions, meetings, and transaction. In his podcast today, you can learn how to track your activities, and most importantly the activities that matter. Take the ideas in this podcast and grow your business through deliberate and direct tracking of your KPI indicators.
When you think about it, there are plenty of things that you can watch when it comes to your activities each week and each day in commercial real estate. Those indicators will include outbound calls, meetings, inspections, and negotiations. All of those things lead to commission opportunities over time.
Listen to the podcast to understand how you can improve your activities each day with the things that matter in brokerage.
In commercial real estate brokerage, you will need to change your sales strategy from time to time as the market adjusts to economic pressures and financial activity. In any period of 12 months, your market share and property type activity will fluctuate between sales, leasing, and property management. For this reason, the sales team needs to adjust strategically with the presentations and proposals that they put forward.
Make no mistake, the new business opportunities are always out there in commercial real estate. It is just a matter of understanding how to reach into the market and identify the right people to work with. Certainly the proposal or pitch in your team will need to change from time to time based on market conditions.
Your success as a commercial real estate agent or broker depends on your flexibility to adjust to prevailing market circumstances. Here are some ideas to help with that:
Be aware of the brand impact that you have in the market. The brand will be both for the brokerage itself, and also the agents individually. Can the brand be improved? How does it compare to the existing competitors in the local area?
In an ideal world, you will be looking for increasingly activity across sales, leasing and property management. The quality of activity needs to be assessed from time to time. Good listings will give you better results and improve your market share. It should also be said that the exclusive listings should be part of that process. The agency team needs to be prepared for pitching their services at an exclusive listing strategy.
Review the quality of the listings that you are working with. Quality does not need to necessarily reflect in price, but rather it should be the quality that attracts enquiry. The quality listings attract the buyers and the tenants that can act in these market conditions. Generally speaking the quality of the property will be in cash flow, size, location, current usage, and future usage.
The best methods of sale and lease that apply throughout the year will change. Ensure that the brokerage team is working with the most appropriate marketing solutions for the clients that they serve.
There will be the opportunity for repeat business and referral business from the customers that you have served over the years. There should be a VIP customer program within your business that encourages referral opportunities.
Understand and promote the linkage between sales results, and leasing and property management opportunities. One thing can lead to another. When one transaction has been completed, prepare for the next property challenge that the client may be heading towards.
Some clients have factors of investment focus and targeted portfolios. They need certain property types, cash flow, tenants, and locations to make their investments work correctly. Your top agents should be working with a select group of VIP clients to ensure that their property needs are well served within your brokerage.
In looking at all of these factors, review the last two years of listing and commission performance. Look for the market segments that have worked for your brokerage and identify any trends that could be shifting or changing. Will you need to change your property focus or staff profiles and activities? Be prepared for the change when you see it.
Identify the strengths and weaknesses that will need to be addressed as part of ongoing business operations. A successful commercial real estate agency or brokerage is usually one that is highly aware of and flexible to the trends in the market. They make the adjustments quickly and effectively. Tracking your business on a weekly and monthly basis across all business segments will be required.
In commercial real estate, and most particularly with the property agents and brokers, sales team performance should be optimised throughout the year to adjust for the changes in property activity and regional demographics. In any period of 12 months, the market will change and on that basis similar changes will need to occur with prospecting, listing, negotiating, and marketing.
It is wise to have a process of tracking the key indicators in your property market. When you consider an average period of 12 months, most property markets have only 10 months of real activity in sales, leasing, and property management. Seasonal changes and market conditions will take up the other two months of downtime. Team performance needs to be suitably handled and adjusted within the agency to get the best results from 10 months of hard work.
Here are some ideas to help you improve your agency sales team performance:
Top agents and brokers specialise in particular market segments. The segments may be geographical, or set by property type. Either way, specialisation is recommended. Specialisation process helps you cover the quality properties, key clients, and pockets of high level activity.
Establish a prospecting model within the agency that can be tracked on an agent by agent basis. That will help you identify any weak links within the team. Some agents need help when it comes to prospecting, presenting, or negotiating. The tracking process will help you see those weaknesses and implement the necessary training and education programmes.
Establish budgets that can apply to each agent or broker. The budget should be split into key indicators. Those indicators will normally be cold calling, meetings, door knocking, presentations, listings, exclusive listings, inspections, and closed transactions.
Track the results that you get from every marketing campaign. The results that you get from an exclusive listing will be very relevant to your business activity. Open listings are not easily assessed in the same way given that the marketing of an open listing is random at best.
At the end of each week, have the agency team provide a summary of activity including call numbers, meetings, listings, and inspections. You will soon see the differences between the members of the team and how effective they are when it comes to building their business.
When you track all of these numbers, you can see where the priorities lie when it comes to each agent and each broker in the team. Given that the property market changes throughout the year, adjustments will always be necessary at an individual level to ensure that quality listing stock is attracted to your business.
So what type of listings should you chase and attract? Quality listings create better levels of enquiry and will sell or lease faster. Over time that will improve your agency market share and commission opportunity.
Should you walk away from a low quality property listing? The answer is yes, if it will take you away from the other good properties in your area and sales or leasing territory. Commercial real estate marketing is a specific process needing effort and focus. Don’t waste your time.
In commercial real estate agency, the sales team forms the central part of the income base for the business. A highly performing team will bring in many commission and listing opportunities over time. That being said, the team really does need to be built, guided and optimised for results.
Here are some challenges to look at when addressing sales team performance issues:
Some salespeople operate best when they are left alone to get their personal plan in motion. Over time this group can rise to the top of the market using a plan and strategy that works for them. On average this type of salesperson is in the minority. Agents in this group know what they have to do and they make sure they are doing it every day of the week.
Other salespeople (the majority) are more inclined to take random action in the market place. This group requires constant guidance and redirection from the team leader. If left to their own devices and actions these salespeople will usually underperform and stagnate with listings and commissions. Agents in this group usually experience ‘peaks and valleys’ in listing conversions and commission income.
The administrative team should support the sales team with back up listing and marketing infrastructure.
So just how do you adjust to this challenging team and get the best out of them? Here are some ideas to help:
Know who your best agents and salespeople are. Let them work with autonomy on their plan (providing the plan matches that of the business). As long as they are getting results there is no need to interfere. Top agents understand what they have to do and they get on with the process. The income and commissions for these agents will be constantly growing.
Determine just who your ‘rising stars’ may be in the sales team. They will require special guidance and assistance to grow and improve. Provide them with personal coaching and training so they can achieve set key performance indicators. Each week and each month this group will need shaping and nurturing. They should continue to get the dedicated attention providing they are responding to fresh ideas and showing growth.
Some of the remaining members of the sales team will be operating in the ‘ordinary zone’ of performance and will be quite ‘happy’ to do so. Members of this team segment usually have plenty of excuses to apply when it comes to a lack of listings and commissions. The income that they generate will fluctuate greatly during the year. Should you tolerate these people in your team? Probably not over the medium term (over 6 months and beyond). Give them some guidance and training to correct performance problems; if they fail to adjust then it is better for all concerned if they move on to another agency.
It is better to have a smaller team of top agent performers than a big team of below average agents. Below average agents drain the life out of the business over the long term. Choose your sales people well by undertaking a ‘sales character assessment’ prior to employment.
One of the significant problems in a commercial real estate team today is the lack of goals or the focus of individuals on previously set goals. Goals are commonly set by the team leader for both the team and the individuals on a yearly or quarterly basis. In many cases the personal goals are simply a ‘wish list’ that never really gets activated. At the end of 12 months, the goals have simply not been achieved and the salesperson has not changed their personal performance. So everyone heads ‘back to the drawing board’ to set new targets.
The reasons salespeople should be setting their personal goals is to give some firm targets to aim at and strive towards. Goals should never be a ‘wish list’ that is relegated to the bottom drawer of the desk and only to be taken out when questions are asked.
Commercial real estate sales and leasing is a result driven industry and career for those that are prepared to work hard. It is certainly not and industry for the feint hearted. Constant focus and continual action are critical parts of personal improvement and results.
Most salespeople and agents will understand the focus on listings and commissions; they will not however change their habits to generate more listings and commissions. That is the reason why so many salespeople struggle in difficult markets and move from agency to agency looking for the ‘pot of gold’ at the end of the rainbow. The answer ‘lies within’ as they say.
The real purpose of establishing goals is to set some clear perspective on where the salesperson can head if they take consistent and relevant action. Goal setting and goal management really does work providing you give it the due regard and focus that it requires.
Here are some rules to the process of goal setting in commercial real estate today:
Understand your local property market and the possibilities that it provides. There is no point focusing in a market segment that has no future or opportunity. There should be plenty of listing opportunity available for your choice of property and choice of market. Get this information sorted and defined before you continue.
Define your market geographically on a map. Set the boundaries that you want to work within based on the major highways and any of the main roads. Inside the relevant area you should have sufficient listing stock that is easily identifiable.
After you have defined your market geographically, look at the history of the area relevant to the property type. Research the sales and leasing activity that has occurred over the last 5 to 10 years. That research will show you trends and opportunities for the future; it will also show you the players or property owners that are active at various times.
Having satisfied the previous three points, it is now time to decide exactly what advantages you bring to the market in and with your property specialty. Why are you different? What can you do for your client that is relevant and important? Are you better than the other agents in the area, and if so why?
Providing all of the above points are ‘in balance’ and suitably positive, you can now set some clear goals and targets. With due regard to the history of the area, you can set some targets around quality listing stock, exclusive listings, time on market, and commissions. Have a serious look at the quality of property that you can work with. Quality listings bring in better enquiry in any market; for this reason you need quality properties that are controlled by you or your agency on an exclusive listing.
All of your goals should be quantifiable and easily tracked. Each few days and certainly at the end of each week you should be revisiting your goals to identify how you are progressing. In most cases many salespeople need to adjust as they proceed in their goal management plan. The road to success requires effort and change. Be flexible and be open to adjustment.
The process of goal management and goal targeting is one of the best ways to get salespeople on track. Expect the entire process to take personal effort and real focus. After approximately three or four weeks of hard work, the whole thing gets a lot easier and results start to come in. From that point onwards you know where you are heading and how it’s occurring.