Who are the high performers?
Our Pulse Check reveals how high performance real estate agencies are winning listings, managing costs and keeping margins high.
High performers are agencies with profit margins of 20% or higher. Nationally, 40% of the agencies in our survey beat that benchmark, with an average margin of 28%. They include agencies of every size, in every state, and every real estate market.
What sets them apart isn’t local market conditions, but the way they have responded to them. Here are five tips to help you emulate their success.
Five tips for outperformance
The main driver behind these margins is higher staff productivity. The average sales agent in a high performance agency generates 35% more in gross commissions each year than a sales agent in a low profit agency.
By rigorously measuring the productivity of your agents, then doing everything you can to increase it, you can increase margins without the need to reengineer your business or hire expensive new heavy hitters.
High performance agencies create strong systems to support and monitor productivity — making it easier for staff to do their jobs while giving them continuous feedback about their performance, and rewarding them for success. By honing your systems and automating processes, you can liberate your staff to concentrate on the things that really matter: winning new listings and making sales.
The first step to higher productivity is to build the skills of your team through ongoing staff development. High performance agencies continually work to develop their staff — and they don't simply rely on on-the-job training. Almost half their staff development effort takes place through purposebuilt training, including internal activities like role plays, and sessions with professional coaches from outside the business.
High performers excel at nurturing a high-performance business culture in tandem with a strong market presence. That not only supports productivity, it also helps them attract and motivate great staff without overspending on salaries. In fact, high performance agencies pay lower salaries and commissions than their competitors across all staff categories, helping them achieve a higher return on investment relative to their size.
Our Pulse Check shows that an agency's database of prospects is overwhelmingly the most important source of business, accounting for around 54% of new listings. So you need to make the most of it.
Ensure you have a good customer relationship management (CRM) system in place to manage leads. Be scrupulous about gathering leads from open houses and rental showings, and make sure they go into your database. Then set up your CRM system to automatically prompt your sales team to follow up.
That way, you not only make the best use of your database, you also increase the productivity of your sales team by arming them with qualified leads to generate more listings with less effort.
For more Pulse check findings view the Executive Summary.
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