Gather the following information about your 2011 production:
- Number of new listings taken
- Number of seller sides closed
- Number of buyer sides closed
- Average gross commission per closed side (all closed sides)
- Average gross commission per closed seller side
- Average gross commission per closed buyer side
- Average listing price
- Average sale price
- Average sale price as a % of average listing price
- Average days on market
- % of sales occurring ‘in-house’
Inquiries generated by category:
Set big numeric goals for 2012:
- Increase production by 25% (or whatever % you choose). Take new listings and closed sides and multiply each by 125%; if you took 100 listings in 2011, your goal for 2012 is 125 new listings, etc.
- Look at the mix of closed seller sides to closed buyer sides in 2011. Your goal should most likely be a 50/50 mix. If you see it way off from that – say a 70/30 mix of buyer sides to seller sides, you’ll need to set specific short range goals to tackle the problem.
- Look at your average gross commission per closed side. How might you increase that? Go after more expensive property? Sell more buyer side transactions? Increase your set fee?
Now, get real.
Truth is, the annual goal is just mile marker set way on down the road. What’s important is what you’re going to do today, tomorrow and next week. Think of your annual plan as a road trip across country. You probably know where you want to end up and may even know some of the places you want to visit on the way, but by and large, you’ll invent your route as you go, responding to current conditions and opportunities in the moment. As long as you’re moving toward your final destination, you’re on track. So, for this exercise, consider the first quarter of 2012, January – March. What are you going to do in the coming 90 days to move you closer to that distant mile marker?
- If you took 24 listings in this period in 2011 and are planning for a 25% increase, what are you going to do to ensure you get 30 by the end of the quarter?
- If you closed 28 sides between January and March of 2011, what are you going to do NOW to ensure you will close 35 by March 31?
- If you are getting, on average, 95% of list price as a sale price, what are you going to do to ensure that you’ll increase that to , say, 97%?
- If your average days on market is 110, what are you going to do to reduce that to,say, 100?
- (By the way, the previous two items usually have most to do with how you price property at the time of listing)
- Look at your percentage of in-house closed sides. What can you do to increase that? Is it time to polish up your seller participation dialogues? Are you ready to rethink the notion that every listing must go into the MLS?
Compare what you did in 2010 against the MLS
- If your average sale price as a percentage of list price is 95%, what is it for the MLS? You’ll most likely discover that their number is worse than yours – say, 93% compared to your 95%. If this is so, how might you use this information in marketing and in seller consultations?
- If your average days on market is 110, but the MLS is 123, do you have something worth crowing about?
And then consider the number of inquiries you generated by category:
- How many ended up as contactable entries in the Buyer Pool Book?
- How many converted to listings or sales?
- What can you do (over and above taking more listings) to increase the number of inquiries?
- What can you do to improve your conversion rates of inquiries to clients?
By the way, the Inquiry category is very important AND many will be unable to examine results and set goals for inquiries because they don’t keep track of them, or do so inadequately. If this is YOU, make one of your first goals for 2012 to become obsessive about leads tracking, inquiry capture and conversion. Next year, when you do this exercise, you want to have the numbers at your fingertips.
Please, o please: do not create a ten page carefully crafted Business Plan for the year unless you want to go to the bank to borrow money. Other than in that specific instance, those plans usually end up as dead documents in a drawer that are never seen again. Instead, put your annual and quarterly goals in a bulleted format – preferably on one page – that you can get to quickly. Your goals and action plans for the immediate future should function almost as a set of affirmations that you look at every day. Reminding yourself constantly that you need to have 30 new listings by the end of March is a giant step toward making it happen.