The first quarter is over. Have you thought about your second quarter goals?
You’re probably feeling one of three ways heading into Q2:
- “I had a really bad first quarter, and I’m not happy about it.”
- “I’m on pace with my goals,” or
- “I’m ahead, and I’m feeling good. Maybe I need to up my number.”
I imagine most people are feeling the first or second way, given everything going on in the market. It’s been a bit of a challenging year and inventory is low—we’re all feeling it right now. It’s just the reality of the 2023 shifting market.
But whether you’re ahead, behind, or right on track, you need to be able to answer the question, “What’s your second quarter goal?”
Are you on track with your year-end goals?
There’s a statistic everyone needs to know, write down, and remember:
60% of your year should be booked—meaning pending and settled transactions should be on the books by June 30th. So, whatever your goal is for the year, you need 60% of it locked in by the end of Q2.
That means if you want to sell 100 homes, you need to have 60 settled and pending by June 30th. Or let’s take a more reasonable goal: a lot of agents want to get to a place where they’re closing two deals a month. That puts you roughly in the top 3% of agents in the country.
So, if you want to sell 24 homes, you want to be at 15 sales by the end of June (24 x 0.6 = 14.4, but since we can’t do four-tenths of a sale, we’ll round that up to 15).
Let’s say you’re at six sales right now. You did two a month for January, February, and March, and you want to catch up. That means you need to put nine sales on the board over the next 90 days (averaging one sale for every 10 days).
How do you plan for this?
Let’s start at the beginning of the second quarter, which is where we are now. To stay on track for getting those nine sales in by the end of June, you want to lock in three sales for the month of April. Then, you break it down to get your daily target.
Control the controllable
You need to focus on things you can control.
Here’s how to do that: You know you want to get three sales per month. How many offers do you have to write and how many listings do you have to take to make sure that happens? That number is going to vary for everyone.
Let’s assume your offer acceptance rate is 50%, and you’re working heavily with buyers right now. It might be tough to plan on getting a listing given how competitive the listing market is. A lot of agents are in this position. That means you’ve got to write six offers to get three accepted.
So, that’s your first KPI (key performance indicator): How do I write six offers? How many homes do I need to show to write an offer?
Brian Blouch, our killer sales manager, knows that for every six homes he shows, he’s writing an offer. So, to write six offers, he’s got to show 36 homes during the month of April.
How many appointments do you need to set?
Now, we’ve got two indicators:
- How many homes do I need to show?
- How many offers do I need to write?
The next question is “How many appointments do I need to set to be able to show 36 homes?” For Brian that might be seven or eight appointments.
You get the idea: the more you track, the better you’ll be able to forecast the activities you can control.
Let’s break it down further. We’ll assume Brian needs to set nine appointments to show 36 homes. How many conversations does he need to have to set those nine appointments?
The number that we see trending right now is 15-20 conversations will lead to an appointment. Let’s go with the high-end number and say it’s 20. So, Brian needs to have 20 conversations for every appointment that he sets, or 180 conversations to set nine appointments.
What about no-shows?
Here’s another number to consider: not every appointment is going to show up.
Let’s assume a 50% show rate, which means Brian would need to double his number of appointments to get to those showings. So, if he wants to set nine appointments that lead to showings, he needs to set twice that many (18) appointments.
To make the math easier, let’s round 18 up to 20 and multiply it by the number of conversations he needs to have (20) to get 400.
That’s 400 conversations Brian needs to have in the month of April to get the number of appointments he needs to show 36 homes and get those three offers accepted.
Now, take those 400 conversations and divide it by 20 work days, and you get 20 conversations per day. It’s that simple.
Twenty conversations a day will get him to 20 appointments set, which gets him to 9-10 appointments that happen, which gets him to 36 showings, then to those six offers, and finally to those three deals he needs to make to stay on track for his second-quarter goals.
[True, 20 conversations times 18 appointments equals 360, but 400 gives you a buffer that could help you either get ahead or help offset any surprises along the way.]
Know your KPI ratios
The point here is this: You need to know these ratios:
- how many people you need to talk to get an appointment
- your appointment show rate
- how many appointments turn into clients
- how many clients you need to acquire to write offers
- how many offers you need to write to get a contract accepted
That’s how you come up with a real estate business plan. And you really want to boil it down to appointments that are happening, new people you’re meeting, and conversations that you’re having.
If you’re not tracking your numbers, you may not have a viable business. To hit your goals in the second quarter, get familiar with your ratios, and use them to calculate the number of conversations you need to be having every day.