When it comes to business, we all want to measure our success—it’s common nature. But, how do you ensure that you’re on track to reach your goals? By implanting and tracking Key Performance Indicators, better known as KPIs.
In today’s episode of Stay Paid, Josh and Luke sit down with Sales Director Nick Bianco as they discuss all things KPI—what to track, how to track, and how to relate it back to your growth.
- KPIs help you determine if you’re able to reach your goals
- It’s best to start at the top and work backward
- You should constantly be auditing your metrics
What is a KPI?
According to Klipfolio, a KPI is a measurable value that demonstrates how effectively a company is achieving key business objectives. In simple terms, a KPI is an objective value that gives you an indication of your performance.
How do I track my KPIs?
The majority of companies want to know if they’re making a profit, and rightfully so. Utilizing KPIs can help you better understand if you’re reaching your revenue goals. It’s best to start at the top and work backward. Determine what you need to be doing today to get to tomorrow. This can help you decide where you need to be focusing your efforts.
It’s important to try not to bucket all of your metrics together. Your sales goals will vary from your marketing goals. Instead, continue to break down your business. Try to identify additional metrics that you will need to keep track of in order to help you reach your goals. Identify as many metrics as you can, until there’s nothing left to measure.
In addition, you should be continuously auditing your KPIs. If you’re not looking at your KPIs every 90 days, you’re going to miss out on valuable opportunities to alter your strategies. Not only can altering your strategies help you develop new measurables, but it can help you reach your end goals.
What KPIs should I be measuring?
For the majority of real estate agents, net profit (or gross commission income) is one of the most popular KPIs to track. But in order to determine your GCI, you need to take a look at your overall goal. Next, determine how long it will take you to reach that goal by determining your conversion rate.
Your conversion rate is your next KPI to measure. In order to do such, you’ll need to keep an eye on your lead generation campaigns. Whether it’s door knocking, Facebook ads, or print marketing, how you bring your leads in will help you measure the rate of your conversions and ties back to your gross commission income.
Client lifetime value
Have you ever thought about what your clients are worth in the long run? Client lifetime value measures your prediction of the net profit attributed to the entire future relationship with a customer.
Retention and return rates
It’s important to keep an eye on your retention and return rates. Losing clients will affect your net profit.
Your most valued KPI should be whether your clients are not only staying with you, but referring your services to their spheres. Not only should you take note of this metric, you should become obsessed with this number. The most successful businesses are obsessed with their clients.
A lot of people overlook their team’s morale as a KPI. But, it can actually be a great metric to use when you’re trying to determine their progress. A team that is more motivated is more likely to reach their goals and perform better.
Following the podcast, our goal is to provide you with as many actionable tips as possible. This episode includes…
- Put down on paper what your goal is from a net revenue standpoint
- Reverse engineer out how many sales you need to hit that specific revenue goal
As always, take action on these tips!