Numbers and Ratios: A Glimpse of the Future

It doesn’t take a genius to figure out when a salesperson is in a performance slump, although many leaders don’t appear to notice until the salesperson has been in the slump for too long – sometimes months.

In aviation, pilots have a saying, “Stay ahead of your aircraft”. There have been many pilots involved in serious accidents or killed because they were flying aircraft that were too fast for their skill. Flying fast aircraft requires thinking ahead especially when landing. Pilots must slow fast aircraft sooner, washing off speed early so that they don’t approach the airstrip too quickly.

We could extend this thinking to real estate agencies – “Stay ahead of your business” and operate proactively, not reactively.

The art form that leaders must master is to recognise behaviour in salespeople that will lead to a slump. Correct the behaviour before the slump and you stop the slump.

A knowledge of each member’s numbers and ratios will help leaders to recognise which salespeople are heading for a slump.

Leaders must know their salespeople’s numbers and ratios in these key areas. These figures are calculated weekly, monthly and quarterly:

• Prospecting calls. That’s people spoken to
• Listing appointments set
• Listing appointments attended
• Prospecting to appointment ratio
• Number of listings obtained
• Current number of listings being managed by the salesperson
• Number of listings withdrawn
• Number of listings sold
• List-to-sell ratio
• Number of buyer property inspections (BPI). Show 1 buyer 3 properties, and it’s 3 BPIs
• Number of sales
• BPI to sales ratio
• Number of sellers (vendors) appointed for feedback
• Substantial Price Reductions obtained
• Sides* obtained
• Fee production year to date

* Each sale has two Sides, the listing Side and the sales Side. One Side is awarded to the listing salesperson and one to the selling salesperson, when the contract has become unconditional. Salespeople who sell their own listings are awarded two Sides. Sides recognise the company’s good listers. If somebody has a low sales result but a high Sides result, their listings are selling.

Leaders often complain that they cannot get their salespeople to do the right actions, yet many of those leaders fail to measure the actions their salespeople are or are not, doing, and do not calculate their salespeople’s individual ratios. And so, slumps come as a complete surprise.

A major function of leadership is to look ahead, to anticipate.Ratios and numbers give leaders a glimpse of the future. If prospecting numbers are down, it’s only a matter of time before listing results fall and, eventually, sales and fees. It’s simple numbers.

Getting salespeople to count their actions is an ongoing battle that leaders must not shirk. Do you know your agency’s numbers and ratios? Are you regularly getting a glimpse of the future?