This week we have a special post from Doug Molyneaux. Doug is a partner in COMVEST Properties and its subsidiary, Net Lease Developers, LLC. He is responsible for acquisitions and investment sales. Learn more http://COMVEST.net. In addition, Doug is a CRE coach with us at The Massimo Group. Doug’s post “Increase your income like a PGA Tour player!” is timely with the golf season now in full swing.
It’s Masters Week and I have golf on the brain. The analogies between golf and sales are endless. Except for sponsorships pro golfers are on straight commission. There is no guarantee of a paycheck at the start of a tournament. Game planning, goal setting and execution are all part of the golfer’s and broker’s playbook. In this blog, I am going to focus on statistics. Every tour player has them and every broker (or any salesperson for that matter) has them. Do you know your stats? If you don’t know your stats it becomes much more difficult, and maybe even impossible, to plan, achieve goals, improve your game or even execute.
You can go online and look up virtually any statistic on the top golfers in the world. To illustrate the importance of tracking and knowing your stats, I have compared just a few statistics of the top 2 golfers on the money list with the average tour player on the chart below. The numbers in parentheses are their ranking. What can this chart tell the average tour player?
|Player||Driving Accuracy||Greens in Regulation||Putts per hole||Scoring Avg.||Season Earnings||Earnings per Event|
|Tiger Woods||55.8% (147)||67.01% (81)||1.653 (2)||68.33 (1)||$3,787,600 (1)||$757,520|
|Brandt Snedeker||67.7% (18)||72.95% (4)||1.699 (10)||69.63 (4)||$2,859,920 (2)||$408,560|
|Tour Average||60.08% (90)||66.05% (90)||1.78 (90)||71.39 (90)||$393,171 (90)||$56,167|
Let’s say my income goal is $1,000,000 and I am an average tour player. What must I do to achieve my income goal? One way to achieve that goal is to play in 20 tournaments this year. Another might be to improve my putting by 10 basis points and play in 2 or 3 tournaments. Has anyone seen Steve Stricker?
Now let’s apply this strategy to your brokerage business. Below is a simple chart for prospecting statistics. The first row assumes Average Joe Broker (let’s call him A.J.) is a twenty percent kind of guy across the board. Can you see A.J. in a listing presentation saying “you should list with me because I am successful 1 out of every 5 times”? The chart below assumes someone will answer the phone 50% of the time. Between the first and second row of the chart A.J. read a book or hired a coach and improved his stats from 20% to 25%. Maybe he read The Barron Blog.
|Average Joe (A.J.)||250||125||25||5||1||$25,000|
How can these numbers help the broker increase his or her income? One benefit to tracking stats is motivation. If you look at A.J., who hates to make cold calls, and do the math, he makes $100 per dial whether someone answers the phone or not! If I were to stand next to your desk and give you a Benjamin every time you dialed the phone, what would you be doing all day? I can handle rejection all day knowing I make $100 (or even $20 for that matter) every time I dial the phone no matter what. When someone tells you “NO” just say “Thanks for the hundred bucks” (to yourself).
I also can set realistic goals and achieve them if I know my statistics. If I am A.J. and need to make $1,000,000 I have to dial the phone 10,000 times during the year, or 200 times per week or 40 times per day.
Finally, knowing your stats can help you make better investments in yourself. You can look at your numbers and do the math to determine what skill you should focus on that will make the largest impact on your bottom line. Should A.J. spend his money on a book about closing, a webinar on winning more assignments or a coaching program that considers every aspect of his business? In the example above, A.J. made very small improvements in a couple of areas and doubled his income for the same number of calls. In brokerage and golf you will find very minute differences between average performers and those at the top of their game.
Now if I have sold you on the importance of tracking your statistics, here are some key stats you want to keep;
- Source – what percentage of your business comes from cold calling, referrals, repeat client, company lead, etc.?
- Commission – what is the average commission per deal, and what is the average commission per deal for each source of business?
- Calls – as discussed above how times do you have to dial the phone to have a conversation, how many conversations do you have to have to get a meeting, how many meetings do you need to get an exclusive, what percentage of your listings turn into contracts, what percentage of your contracts successfully close and what is the average commission per closing?
For those of you who already track your numbers, I would be very interested in hearing your stats. How much do you make every time you dial the phone, whether you speak to someone or not?