38. Simplifying My Process to Focus on What Really Matters

Send us a text

Ever had one of those 'aha' moments where numbers suddenly make sense in a way they never did before? That was me today, diving headfirst into the math of real estate. This episode takes a different angle on math as not just a necessity, but a powerful guidepost towards meeting annual sales goals.

I've always been math-averse, but learning to interpret key performance indicators (KPIs) has been a game changer in my approach to client onboarding and conversion. Realizing that I don’t have 12 months but really just about eight to generate leads for this year was eye-opening. This understanding of timelines—from warm lead to consult, consult to close—enables a more strategic focus on when and how to enhance my lead generation activities.

In today's episode, I break down the crucial metrics: the journey from consultation to closing, the conversion rate of consults, and the ratio of warm leads needed to book a consult. Get ready to discover how pinpointing these metrics can provide clarity and keep you aligned with your real estate goals. Listen in to rethink your strategies and use KPIs to transform how you manage client pipelines.

As we wrap up, I invite you to continue the conversation in our Business Systems for Realtors Facebook group. Let’s explore how these insights might refine your strategies or even shift your perspective on closing deals this year!

Episode Transcript

Alexa (00:00):
Before we jump in today, I have to apologize in advance,
because we're talking about math, and if you guys are anything
like me, I was never a mathperson.
I can multiply pretty much anynumber times 0.03.
But beyond that, like math wasnever my specialty.
And yet I find that the morethat I lean into my KPIs and
really understanding how thenumbers work together to tell a

(00:22):
story is, the easier that itbecomes to stay on track for my
goals, and so I know that thereis a lot of different models
around this, but I found thatthe one that works best for me
is understanding how many isthree very simple ones.
Number one is how long does ittake to get from consult to
close?
For us that number is 93 days,and so understanding that if we

(00:45):
sign on a client today, we'renot going to get paid for 93
days later on average right, weactually tracked this down to
from the time somebody entersthe pipeline as a warm lead into
when they schedule theirconsult, and then from there we
looked at their what we calltheir live date.
So for sellers, obviouslythat's going live on the market.
For buyers, that is when theyactually start shopping for

(01:08):
property, so in some cases,that's like they have a lease
that's ending and they're notready to start shopping yet.
All those things.
Then from there, how long ittakes them to go under contract
and then contract to close.
And so, for us all, in, fromthe date that they enter the
pipeline as a warm lead, it's118 days, and then, once we sign
them on as a client, that's 93days.

(01:28):
So those run concurrently.
Now, for us, what that reallydid for me was to show me, based
on my goals, the last day thatI have to sign on a client, the
last day that I have to addsomebody into my pipeline if I
want them to close this year isAugust 3rd, which means that,
like it's not that we have 12months to lead generate, we
really have eight months to leadgenerate in order to actually

(01:50):
fill the pipeline for the restof the year.
And then we have to sign on ourvery last client for September
29th in order for them to closethis year.
Right, because again, we'retalking about that 93 day lag.
Now, that doesn't mean that westop lead generating at the end
of the year.
It just means that we'rebuilding our pipeline for 2025.
And so, if you think about this.
A lot of agents get really,really like hustling in the

(02:12):
fourth quarter and then they'relike, well, why is nothing
closing?
And then you end up not beingable to buy your family gifts
for Christmas, right, but if wefocused on in second quarter
that that those transactionswere actually setting us up for
the fourth quarter, that's wherewe'd go.
Oh okay, I know exactly what Ineed to do.
The second number that I reallypay attention to is what percent
of our consults close.
Now, to be clear, this is notthe same as what percent of

(02:36):
consults turn into a client,right, because if we go from
that number, in my businessthat's actually about 80%.
So four out of every fiveclients that we sign on end up
closing.
That one out of five is liketheir plans change, they decide
to stay in the property, thefinancing doesn't work, whatever
it ends up being.
But that number, fromconsultation to close, is 62%.

(02:58):
So for every 10 consults that Ido, six of them will end up
closing.
Now, that gives me a reallygood idea of how many consults I
need to do in order to hit mygoals.
And then the last one is howmany warm leads do I need to set
a consultation, and for me thatnumber looks like about one out
of five.
For every five warm leads thatenter my pipeline, one of them

(03:20):
is going to end up booking aconsult.
Now, that doesn't mean that theother four are never going to
end up booking.
It just means that in terms ofthe timeline, in terms of
falling into that 93 days, onlyone out of five is going to do
that.
The others are still going toget nurtured.
That's what the database is for, but that one out of five is
the one that I'm looking for.
So from that then we can startsetting some real numbers in

(03:42):
terms of goals.
Right, if I want to do 12transactions for the year, then
I need about 97 warm leads forthe year.
Based on, if you were to usejust my numbers, if you wanted
to do 24 transactions, that'sabout 195 warm leads.
36 transactions is almost 300,so 291 warm leads, and 50

(04:05):
transactions is a little over400 warm leads.
And so when we think about likeokay, let's get really, really
technical about this, then thequestion becomes like, how many
warm leads do we need to beadding to the database?
How many warm leads do we needto be finding every single week?
Now that doesn't mean that itneeds to be a new person.
It means that it can be areferral.
It can be someone from yourdatabase that you've reactivated

(04:27):
.
It can be a new lead.
That came in In my mind.
A warm lead is someone who says, yes, I want to buy or sell
real estate in the next 12months.
Okay, and so from there we takethose breakdowns, and so 12
transactions for the year isabout two warm leads per week.
24 transactions is about fourwarm leads per week.
36 is about six and 50transactions is about eight warm

(04:50):
leads per week.
So when we think about, like,okay, what do I need to do today
in order to do my job and makesure that I hit my goals, if we
can focus on what we call theleading indicators, the early
indicators of making sure thatwe're going to be successful
towards our goals, and we justfocus on that right, forget
about all the other stuff, wejust know, as long as I bring
this many warm leads into mypipeline every single week, I

(05:13):
know that I'm going to be ontrack for my goals and that, as
long as I do my follow-ups, thatthis is going to become very,
very predictable.
But, like I said, the trickhere is that we have to make
sure, if we're playing catch up,that we're accounting for the
fact that we only have untilreally August 3rd to do the lead
generation for that.
Okay, so now let's say so.

(05:33):
The date that I'm recordingthis is March 5th, right?
So you might be listening to ita little bit later.
You might be listening to thisa lot later.
It just kind of depends.
Now, if we were to think about,from today, we have about 22
weeks until August 3rd, right?
So it's not that we have enoughtime.
That if let's say, for example,we wanted to do 36 transactions

(05:53):
for the year, it's not six warmleads per week.
It actually ends up increasingbecause we have a shorter time
period.
So if we were to look at that36 transactions goal, then that
would actually come out to about13 to 14 warm leads per week.
If we were to break that downfor the others, right, for 12
transactions, it's about fivewarm leads per week, because now

(06:14):
we're not looking at a wholeyear of lead generation, we're
really looking at six months oflead generation.
Essentially, 24 transactionswould be like nine warm leads
per week and 50 transactionswould be about 20 warm leads per
week, right?
So from here we can get reallyintentional about saying, if
there's nothing else I do in mybusiness except add these new
people into the warm or hotstage in my pipeline and make

(06:38):
sure that I follow up with themon a recurring basis, that's
going to put us on track for ourgoals.
And so when I always say, likethe funnels and all the other
stuff is extra, but it doesn'treplace the conversations and
the relationships, that's neverbeen our goal here.
It's been to facilitate theconversation, to make the
conversation better and moreeffective, but it's not to
replace it.

(06:58):
But at the end of the day, itall comes down to the
relationship, right?
Like content and relationships,they work hand in hand.
High tech, high touch, right.
So high touch is actually beingin relationship.
High tech is all the thingsthat work to support those
conversations.
So think about the technologyis to make your business run
better so that you can have moretime and more presence when

(07:19):
you're in conversation.
So that's the episode for today.
I hope you have an awesome restof your day and, as always,
please join us in the dailyFacebook discussion and the
business systems for realtorsFacebook group and I will see
you in the next episode.