Evaluating your performance against the statistics of other agents or companies in your market segment is a great starting point, but it is rarely enough to uncover your unique edge or point of difference.
When you compare your numbers to MLS stats for the number of units sold, number of listings taken, number of listings sold and total sales volume in your market area, you arrive at a picture of how you did compared to the market at large. However, chances are good that your business is focused on certain segments of the total market – likely you specialize in certain neighborhoods, certain price ranges and even certain types of residences. To uncover your edge, you need to segment — or what I call slice and dice — the market-wide numbers.
• You might shrink the geographic area down to a concise neighborhood or region in order to compare your own performance with market performance in that niche region.
• You might expand the geographic area to include several neighborhoods or even towns in which you operate.
• You might want to analyze real estate activity only in a certain price range.
• You might choose to focus only on a segment that includes a particular property type.
I caution you that you must be ethical and fair when you segment the numbers. You need to create true comparisons and honest evaluations of the sales numbers and sales volume in each category you create. So long as you disclose the approach you took and define the segment you analyzed, I personally feel that focusing your analysis on a specific market segment is a fair way to define and present your strong competitive position.
Using statistics ethically and to your advantage
When you compare your sales performance with that of other agents, sometimes you will want to show how well you rank in terms of all sales in your entire market area, and sometimes you’ll want to focus on your dominant position in a specific segment of the market. You can expand or contract the portion of the market you focus on, so long as you’re drawing a valid conclusion that you explain clearly to your client.
For example, consider an agent who is making a listing presentation to sellers in a specific development. She knows that if she presents her track record solely in the seller’s home area she will rank squarely in the middle of the agent pack, hardly a winning position.
However, if she expands the market area to include the seller’s development and the development called Arrowwood, her ranking will shoot straight up to the top of the list, since she outsells her nearest competitor two-to-one in the Arrowwood area. She decides to show her sales performance based upon market activity in both developments. When presenting her findings – and her dominant market position – she explains to the sellers that she expanded her market study to include transactions in Arrowwood as well as in the sellers’ development, because most buyers consider both the developments when selecting a home of the type the sellers will be listing.
Her approach put her in a strong position. But it was also ethical, clearly explained and the basis for a valid comparison that was useful to her and to the sellers.
Calculating Per Agent Productivity
Often, the largest company in a market will account for the largest sales volume and sales numbers, creating a strong market presence that eclipses the performance of small companies and individual agents. If you face a David and Goliath situation, reach down and pick up the stone of per agent productivity to put in your slingshot.
Calculate per agent productivity by dividing a company’s total performance by the number of agents working at the firm. You can use this calculation to bring listings taken, listings sold, total unit volume, sales volume or buyer-represented sales down to a per agent basis. Suddenly, Goliath won’t look quite so dominant.
Using market-area statistics to set your goals
Always know the average agent success numbers for your marketplace. These are the numbers you want to eclipse by the end of your first six months in the business – at least.
Know the “Big Three” statistics and know exactly how your own performance stacks up against market averages. I tell agents: Know thyself and know thy competition is the first rule to follow when you want to acquire a competitive advantage.
Then, once the numbers are in front of you, compare your performance to the market area average. Ask:
• What doesn’t look good at first glance?
• Where are you falling behind?
• If you broaden or shrink the criteria, does your positioning improve?
• How can you craft a position from which to sell if you’re stuck with these stats?
Use the first two questions to set improvement goals. Use the third question to determine a segment in which you excel. Use the fourth question to package the facts, whatever they are, into a position that you can present with confidence
Dirk Zeller is a sought-out speaker, celebrated author and CEO of Real Estate Champions. His company trains more than 350,000 Agents worldwide each year through live events, online training, self-study programs and newsletters. The Real Estate community has embraced and praised his six best-selling books: Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, The Champion Real Estate Team, Telephone Sales for Dummies®, Successful Time Management for Dummies®, and over 300 articles in print. To learn more regarding this article, please visit realestatechampions.com.