Benchmarking Can Take You From Good To Great
If you haven't read the book, "From Good To Great" by Jim Collins, I highly recommend it. The sub-title is "Why some companies make the leap and other don't". The book is all about benchmarking. Simply put, benchmarking is all about understanding where you are today, objectively, so you have a way to measure progress again the benchmark to see if you are gaining ground or losing ground.
We have all heard how people with goals are so much more successful than people without goals and the people that write their goals down are exponentially more successful. Benchmarking works in the same way. It gives you the focus and opportunity to understand if what you are doing is working. When it is, keep it up. When it isn't make adjustments. Without benchmarks you are basically driving blind!
In real estate there are numerous things that should be benchmarked. Brokers, team leads and agents I know that are really doing great today can give you these numbers without hesitation. They are tracking everything they do and they are constantly tweaking things to find the next improvement. The key though, is that with benchmarks they can tell if it is working or not.
Here are some typical areas of real estate you should consider benchmarking:
- Number of total leads
- Number of referral leads
- Number of leads from past customers
- Percentage of previous clients that work with you again
- Total website visitors
- New website visitors
- New online leads/registrations
- Average response time to new leads
- Number of contacts, phone, email on new leads
- Organic online leads
- Paid traffic
- Your lead conversion rate
- Technology spend
- Technology RO!
- Buyer client customer satisfaction
- Seller client customer satisfaction
If you can't benchmark it, get rid of it!
I have lead many strategic planning sessions for MLSs, associations, technology companies and real estate companies and I always tell them, if you are setting a goal and can't benchmark it, get rid of it. Benchmarking is a great test for you to see if you understand what you are trying to do. It is amazing how often, during planning sessions, someone would suggest a goal and when asked, could not tell the group how we would know if we reached the goal. Numerical benchmarks are easy but when you start setting goals for things like satisfaction and effectiveness and motivation, important things that impact a business, it takes some creativity and effort to track them.
Don't ignore the soft benchmarks
Benchmarks that are numerical, like revenue and stats you can get from the REW website or Google analytics are the easiest to track, but it still takes diligence to stay on top of it. Others, like repeat customers are numerical but you need to create a system to track them. The softer metrics though, for things like customer satisfaction, or communication success require a little more work but are extremely important. Using simple survey tools or conducting periodic followup interviews are two easy ways to create and monitor benchmarks like these. Don't overlook them as they will have a direct impact on your revenue.
Why average companies, teams and agents don't benchmark
Setting up and using benchmarks isn't really that exciting. It is work and most people probably think they are doing it, at least to some degree. They measure somethings like number of leads and GCI but unfortunately they aren't measuring all of the little things that actually produce turn those leads into increased GCI. It takes work but it absolutely is work that you will get highly paid for. Companies teams and agents that are crushing it today all benchmark. They track their progress against goal. They know what is working and what isn't. They are tweaking things constantly and with benchmarks they get feedback on which way to move next. They have a map.
Communicate and share your benchmarks
It is really important for companies and teams, to make sure that everyone understands what benchmarks are and how they are being used. Creating benchmarks or a strategic plan and then not sharing it is a waste of time. The real value occurs when benchmarks and plans put everybody on the same page. It creates accountability. In addition to sharing benchmarks you most importantly need to share ongoing progress against them. Agents need to see if their average response times to leads is suitable or not. Your marketing group needs to see if a recent marketing initiative had an impact. Everyone needs to understand if their customers are happy with the work you do and so on. Benchmarks keep you honest and on track.
We can help
If you need any help on setting up benchmarks in your business feel free to shoot an email to firstname.lastname@example.org. I'll be happy to help you brainstorm on how to use benchmarks more effectively. Technology is great, but you need to use it the right way to grow your business. Once you start using benchmarks effectively you will definite results.