How are your agents doing year-to-date? Are you on target to hit your firm’s goals? Are any budget items out of line? Here are a few tips to make sure you finish up 2019 strong and are ready for whatever next year brings.
Erica Ramus is an indie broker and a tech geek in Pennsylvania. Her regular monthly column publishes on Thursdays and covers and array of topics including recruiting, independent brokerage, technology and social issues.
How are your agents doing year-to-date? Are you on target to hit your firm’s goals? Are any budget items out of line? Here’s a few tips to make sure you finish up 2019 strong.
1. Go over your budget
If you’re not doing this weekly or monthly, you should at least be doing this quarterly. We’re halfway through the year. Run a year-over-year report to see where your income and expenses compare to this point in 2018.
Are any expenses out of whack? If income is up, it naturally follows expenses probably will be too, but they should be tracking similar percentages.
For example, if commission income is up 10 percent and advertising expenses are up 10 percent, too, that’s not surprising. But if advertising is up 30 percent, what is going on there?
2. Do an ROI analysis
You should be tracking the source of every closing. Every buyer or seller closed should be in a spreadsheet with amount of commission income brought in, amount kept in-house (brokerage net) and the source.
Don’t just use generic “internet lead.” Break this down deep, such as Zillow, realtor.com, brokerage website forms, Facebook ads, etc. Calculate your return on investment for everything you spend money on to bring leads in the door.
I spend thousands each month to bring leads in from one particular source, and it looks huge on paper, but I know I have a 4.5 ROI on this product.
As long as it is profitable for me, I will continue doing it. If the ROI drops off, then I will re-evaluate paying for this product, but as long as it is making money for the office, I’ll spend it.
Similarly, cheap products might not be so cheap at all if thy don’t produce a positive return.
We invested in one lead source that looked inexpensive ($35 per seller lead paid upfront, supposedly vetted as ready to sell) that produced zero signed listings over a three-month period. We quickly decided it was not worth the trouble.
3. Examine your vendors
Just as you are going over your lead sources and paid lead generation tools, go over contracts and vendors. Know the end dates of important business relationships, such as your leases, equipment rentals and technology commitments.
I reviewed one lead gen contract recently and knew that they the contract was due to renew in July. Then, I realized that because I called their company in March and tweaked some of the services, it extended the contract another six months. I e-signed the contract and did not pay attention at the time that this was part of the terms.
If you have issues with any contracts, don’t be afraid to be vocal about it. Vendors make money off our agents and brokerages, and they rely on good word-of-mouth — just as we do.
When I reached out to the tech vendor above and expressed dissatisfaction with the contract extension, at first they pushed and shoved me from department to department.
My original sales rep said he had been promoted to a different department so he sent me to a new sals rep, who sent me to customer service, who said I had to give 30 days notice in writing to cancel the service.
While I was being shuffled back and forth, they hit my card again for another monthly charge. I pushed back and eventually got the service canceled immediately.
4. Assess your agents
You should be sitting with your agents and going over their goals at the very least annually. I have a weekly meeting (even if it’s only over the phone) with each agent to go over their current deals and problems, so I always have a pulse of what is going on in the office.
I have a team of 10, so this is manageable for me, but the National Association of Realtors’ statistics show that most brokerages in the United States are more like me than the large 100-agent offices. This should be doable. In larger offices, you may delegate to the manager that this is one of their functions.
I sit down with each agent quarterly to discuss goals and where we are in the year. Halfway through, they should be hitting the mark halfway.
If they are not, where are they falling down? Lack of inventory certainly is affecting most agents and offices this year. My agents are scrambling to find enough houses to meet their buyer needs.
But is there something else happening that is affecting an agent’s sales?
You don’t have to have a formal meeting to do this quick check. Run their numbers, and take them for a quick cup of coffee or sit by their desk for 15 minutes.
I believe in management by walking around — meaning I don’t just walk through the agent area, but I pause to sit with them and even sometimes bring my laptop down from my office and sit in the agent area to work side-by-side for a few hours.
Listening to their conversations and being a part of the group allows me to problem-solve on the spot and address concerns before issues crop up.
Sometimes things come up where an agent would not have thought it important enough to “bother” me in my office, but because I’m sitting there, they approach me.
5. Make changes now
Now is the time to adjust things, before you hit the fourth quarter. I cut a few advertising items this month and shifted the money into other places. I’m also taking a defensive approach to the budget, in case we hit a downturn in 2020.
By the time October hits, you’re in the home stretch. It’s hard for agents to catch up in their sales targets at that point, and it can be difficult to adjust budget items enough to make a true change in the end-of-year results.
By fall, you should be thinking about the next year and already starting to set that budget and agent goals. Take some time right now to do these things, and you’ll be prepared for whatever 2020 brings.
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