Author: Mike McElroy, Center Coast Realty
Real estate agents, particularly ones new to the industry, love to set big audacious goals without putting together a roadmap to accomplish them. They often want the result of hitting a goal…but the real question is, do they want the result more than the time, energy and money they’re going to have to trade in order to get it?
Problem is, it’s impossible to know the answer to that question without doing some further analysis. When a bright-eyed, bushy-tailed agent comes to you with an ambitious goal, you don’t want be the manager who tells them they can’t do it. As a coach, you want to empower your agents to push themselves. So, take a positive approach, like, “Awesome! While that may be a lot more than a typical first-year broker makes, it’s definitely possible, so let’s talk about what you need to do to make it happen.”
Then, map out exactly what steps the agent will need to take to hit that goal. There’s a simple process you can follow, with two possible results:
- When you’re done, the broker will have a clear, actionable path to follow to hit their goals and take steps to follow it, or
- The broker sees how much work it will take to realize their goal and adjusts their expectations accordingly.
You can now re-work this path to lead to their new goals.
Set big goals.
Start by setting a big goal for the end of the calendar year. One goal for the year is preferable, and I would suggest no more than three. More importantly, your goals need to be SMART – you’ve probably heard this acronym before. It stands for Specific, Measurable, Achievable, Relevant and Time-bound.
Why are SMART goals important? Because if your goal isn’t SMART, there’s no way to tell if you actually accomplished it! Or, it might be the wrong goal – one that doesn’t lead to real success.
Here’s an example of a goal that is not SMART: “I want to focus more on social media.” Have you heard that one before? Let’s see how it holds up to the SMART goal test:
- Is it specific? Is it measurable? No.
- Is it achievable? Is it relevant? There’s no way to tell.
- Is it time-bound? Sure isn’t.
Now here’s a SMART goal for a REALTOR® that meets all the criteria: “I will increase my listing presentation closing ratio from 40 percent in 2018 to 60 percent in 2019.”
For the rest of our example, let’s use a simpler SMART goal: “I want to earn $150,000 after expenses in 2019.” This is a big goal, especially for a new agent. While a goal like this can potentially lead to frustration and burnout if not planned and worked for properly, it can also lead to, well, $150k in earnings.
Take the SMART goal criteria into consideration:
- Is it specific? Yes, we’re talking about $150,000 after expenses.
- Is it measurable? Yes, we have a clearly-defined amount.
- It is time-bound? Yes, we have a due date at the end of the year.
We’re off to a good start.
Let’s now ask if this goal is Relevant. This is an important question to ask. Why does the agent want to make $150k? What will that amount of money allow them to do – provide for family? Pay off loans? Invest in the future of their business? If so, what does that future look like? Many agents fail to hit their goals because haven’t truly bought in. Do not skip this step.
Finally, is this goal attainable? Let’s find out.
Break down the metrics.
Now it’s time to work backward from our goal. The idea is to keep breaking the Big Goal from into smaller goals until it’s completely within a broker’s control. This step can be a bit of work, so hang in there.
If an agent wants to make $150,000, factoring in the agent’s expenses, how much gross commission will the agent need to bring in to earn that? Let’s say that number is $220,000. You then need to break that down into the number of buyers, sellers, and renters it will take to generate $220k worth of GCI.
Let’s look at it in terms of listings. Based on what your brokerage charges sellers for commission, and your average sales per listing, you determine that it will take 22 transactions to generate $220K worth of GCI. Now we are starting to set some more manageable goals, but we’re not done yet. You can’t just step outside and pick a person out in a crowd to sell their house. You need to keep working backwards.
If they need to close 14 seller transactions, how many listing agreements get signed? How many listing appointments will it take to get to that number of listing agreements? How many listing leads will the agent need to generate to get the necessary amount of listing appointments?
If this sounds like a lot of work, it is. Software helps. Now would be a great time to dust off your Excel chops. At Center Coast, we’ve developed a tool that allows our agents to punch in some basic goals and assumptions. The tool then spits out a sales and marketing plan for the entire year and syncs with our CRM to measure results.
Set micro sales goals.
Once you’ve broken down the metrics and understand the conversion rates between each of those metrics, setting micro sales goals is easy. Let’s say that in order to close 14 seller transactions, they need to generate 200 seller leads over the course of the year. We can now set micro sales goals of 4 sellers leads per week.
Tie these sales goals to daily action plans.
Help the agent determine what actions every single day that will generate those leads. Door knocking? Cold calling? Open houses? Whatever the method, the agent needs to establish a good understanding of how much time or money they need to spend in order to hit their sales goals.
After you’ve walked through these four steps, it’s up the agent to decide if this goal is attainable. Now that your agent sees the entire process drawn out and they understand what they’ll have to do in order to hit their goals, ask them how they feel. Is this something they can commit to, and with your help, can they hold themselves accountable?
If yes, congratulations, you’ve got a new key player on your team. If not, it’s worth going back to the drawing board and coming up with a more realistic goal that will set them up for success within their reach.