The Maths of Estate Agency
Some estate agencies are very target-driven, which, in this market especially, can be very frustrating if not managed well. For example, there is simply no point expecting an agent/negotiator to deliver their monthly target by the end of the month – just because that is their target and they need to achieve it! Too many managers absolve themselves of their responsibility to deliver through others by relying on a target-delivery expectation!
The issue is not what you expect to achieve by the end of the month, but what you actually do today that counts. The focus on monthly target is a bit like getting in your car and saying you are going to Salisbury, but taking no account of the various turnings you need to make along the way. When you are driving you don’t think about the destination – only the requirements of the journey.
Does this fly in the face of conventional goal-setting wisdom? Not really. I’m just suggesting that your goals should be broken down into bite-size chunks. Only when you do this can you see the value of everything you do. On one of my training seminars, I encourage agents to really think about their daily “numbers” and it never ceases to amaze me how few actually do so.
For example, let’s say you need to phone 15 buyers to get through to 10 of them which results in one viewing, and it typically takes say 14 viewings of a property in order to generate an offer, and it takes 1.5 offers, on average to secure a sale which is worth say £3,000. This means that every time you pick up the phone (even if the buyer is out) the value contribution of that activity to your business is actually £9.52 (£3,000 divided by 315 attempted phone calls).
Most people find it much more motivating to attach £9.52 to a phone call (even if they’re out) than some unreliable figure based on history in up to 30 days time, and it’s easy to work out how much extra such proactive work is needed in order to double your sales.
When we apply the same process to capturing vendors, the figures usually look quite exciting, with £30 to £90 per phone call being not at all unusual.
In a recession they say you have to focus on what really matters – and if you focus your attention on hourly activity, then the targets will look after themselves by default!