As a former wide receiver and defensive back for Ole Miss, RE/MAX Experts agent Quintavius Burdette knows that, in both football and real estate, the touchdown scored last week doesn’t count toward next week’s score.
“You can’t beat a team from last week’s results,” says Burdette, or Q as his friends and colleagues know him.
So when the former athlete walked away from a promising accounting career to pursue real estate two years ago, it wasn’t long before his self-created 4-Point System had this real estate rising star well on his way to selling nearly $20 million and 106 sides his first year.
His system is simple: Every day he sets a quota for his daily productivity with a signed contract netting four points; two points for a signed listing agreement; one point for a buyer showing; and a half point for meeting a potential customer who’s planning to do business within 90 days.
While it may be tempting to take off the rest of the day after scoring a big closing or signing a large contract, Q’s day is never done until he puts 4 points on the board. The system, he says, turns a negative, like meeting with a buyer who doesn’t move forward after a showing, into a positive because he’s that one step closer to reaching his goals.
“The system totally changes the mindset of selling real estate,” he says. “It also keeps me from burning out. Every day is different. Some days, I’m working until 7 p.m. Others, I’m out of the office by 10 a.m. once I’ve scored four points. There’s nothing like that feeling when you’ve hit your goal.”
Indeed, Q has reached his daily goal every day for the past two years, even during the height of the pandemic’s shutdowns, when he checked in on his database with daily calls. In fact, 90 days after implementing the new method, Q had eight customers looking to do business.
“Top agents who double or triple their business year over year put together a plan and break it down by monthly and weekly goals.”
Sherri Johnson Coaching
There are numerous theories and goal setting systems designed for real estate agents, teams and brokers, and, while the variables will change with experience, audience type and local market conditions, most involve some form of intentional practice, tracking and accountability.
But how do agents know how high to aim their goals for 2021, especially with so much uncertainty in the market? How does an agent find the right mix of communication with clients? Even more importantly, what is the one key element that will keep agents laser-focused and motivated to reach their goals throughout the coming year?
Recently, we asked four top-rated real estate coaches to share their best formulas for success to help make the unpredictable as predictable — and attainable — as 2020 turns a corner and heads into a new year.
Coaches agree that real estate pros who follow a few simple steps on the front end of the year will be much more equipped to succeed than those who jump in without a plan. It all begins with asking a few questions, most notably “Why” and “What.”
“What is your ultimate goal or objective?” asks Jan O’Brien, Trainer, Speaker, Coach and Co-founder of WBNL Coaching and Podcast. “Picture yourself at the end of your life and write down what you see, feel and hear. What is really important to you? What is your big why?”
According to O’Brien, only 10-15% of agents sit down and actually create a comprehensive business plan that outlines how many transactions they closed in the previous year and sets detailed goals for the coming year.
Justin Letheby, broker/founder of The JBL Team and certified trainer, speaker and coach with The John Maxwell Team, agrees, citing lack of goal setting as the No. 1 reason why real estate businesses fail.
“Top agents who double or triple their business year over year put together a plan and break it down by monthly and weekly goals,” adds coach and former top-producing agent, manager and top-three national independent brokerage executive Sherri Johnson of Sherri Johnson Coaching.
But for goal-setting to work, Jeff Cohn, host of The Team Building Podcast and owner of kwELITE Keller Williams, notes, “every person in the organization has to be willing to self-confront and ask themselves, ‘Why am I doing this?’ ‘What can I get out of the next 12 months? Based on the lifestyle I want to live, how much time am I willing to invest? 10 hours or 40 hours every week?”
Next, agents should break down their vision into objectives for three, five and 10 years and write down their monthly actionable goals, says Johnson.
“What action steps and commitments are you going to make on a daily, monthly and quarterly basis?” she asks.
Johnson typically suggests setting three annual goals: a bare minimum goal, a great goal and a stretch goal — “an outrageous crazy number that an agent may say, ‘I could never do that,’ and we say, ‘Why not?’”
Cohn asks agents to identify the highest income-producing activities that will net them the highest return, whether it’s cold-calling or texting or nurturing a social media presence.
“It’s a constant game of trading time for money,” says Cohn. “You need to figure out the best way to make the maximum amount for the least amount of time and energy.”
Many agents are surprised year-end when they track their metrics to learn that 70% of their revenue streams from 20% of their activity, says Cohn, who recommends agents and managers constantly reevaluate and make strategic adjustments where necessary.
Case in point: In his first year of selling real estate, Cohn sold 50 doors netting him $96,000 in 2007. In the second year, he spent $30,000 to hire a Transaction Coordinator. Although he spent a third of his revenue on a new hire to do the admin work at $20/hour, he was able to free his time to build higher-producing relationships with customers.
Many agents have a good idea of how much they want to make in a year but struggle with breaking down that goal into attainable quarterly, monthly and weekly steps.
While some agents might be able to immediately identify how much they want to make, newer agents may struggle with an exact sales figure. Where data exists, review what’s worked, what hasn’t and make changes accordingly. For new agents, Letheby often recommends identifying the number of units as a goal then converting it to dollars.
“Talk to your managing broker and figure out what they’ve experienced from new agents. Did they make $25,000 or $100,000? Then translate that figure into units, using the average sales price, the average commission and your office split,” he says.
Once those figures are known, Letheby says, an agent can adjust for the side(s) represented and the commission and determine the number of units needed to reach the goal. For example:
|Per Side Goal||$80,000||$20,000|
*Per transaction is avg. price X avg. commission
**Goal number divided by per transaction
Most agents can determine how many conversations equals a close goal for the year with this next formula, which Cohn devised after years of reviewing his own site traffic:
5 calls* = 1 contact
10 contacts = 1 appointment
3 appointments = 1 close
150 calls = 1 close
$150,000 = 36 units
150 (calls, or 1 close) x 36 (units) = 5400 / 52 (weeks/year) = ~100 calls /week needed
What happens next depends on how many leads an agent chooses to work at any given time. As Johnson notes, agents typically make the mistake of short-sighting themselves by working only four or five customers at a time.
“They’re only devoting themselves to a handful of people who want to do something now,” she says. “When they build what I call a ‘Goldmine Pipeline™,’ they have a pipeline for business for months and years.”
With this approach, agents and their managers look at the potential dollar value of each potential buyer and listing client and then plan accordingly. “This system creates predictable, consistent monthly income,” Johnson says. “When an agent can fill the pipeline effectively, they create business for three to four months, and even 12 months out from now.”
According to this formula, an agent fills the pipeline with enough customers to represent 1 ½ times the amount of sales targeted. For example:
Goal = 26 sales
O’Brien finds three is typically the magic number of niches agents should target in their goal setting. “If you say you’re going to work expireds, FSBOs, social media and more, you’re stretching yourself too thin,” she says.
Find a specialty like serving veterans, millennials, the 55 and over set or those looking to buy and sell horse properties, she says.
“My philosophy is, ‘Don’t try to be all things to all people.’ Find where your passion is. Make a connection with something you like, and have fun with the business,” O’Brien says.
There’s a reason why this next step holds such a prominent role among SMART Goal system followers. Accountability is often the difference maker between those who simply set or attain and those who exceed their goals. All real estate pros — individuals, team and brokerages — must be held accountable to ensure they’re tracking toward their goals.
Cohn recommends establishing weekly meetings, in which agents meet with a success, admin or ops manager to review key KPIs and the goals that will help them raise the bar.
“It may be, ‘I want to spend 20 hours a week making prospective calls to neighborhoods’ or ‘I want to post five times a day on my social media pages.’ It’s about finding where you’re most successful,” he says.
While a common mantra tells new agents that at least 70% of them will fail, Johnson says the manager’s script should be more like, “‘You can make $1 million the first year.’ We should create that success and get momentum. Agents need coaching beyond new agent training; we can’t just hire them and send them out. Managers have to ask who are the people who want to grow and coach them up to double or do 10 times the deals.”
“We know that anything that is tracked and measured will improve,” she says. “So when it’s tracked and improved and turned into a coach or accountability partner, performance will exponentially improve.”
For an agent to be held accountable to their goals, the year’s leads and transaction data must be tracked and measured. Take stock of what’s working and what’s not, then pivot when the plan isn’t going well or double down on those activities that are working.
Many agents struggle with this step of the process, Johnson says. When they don’t hit their goals, they recalibrate and downsize their goals when they really should be underscoring all those activities that are getting results.
A good CRM can help by providing a highly valuable tool that tracks the origin of leads. Some platforms, including BoomTown, kvCORE and cinc, integrate with dotloop’s transaction management system. Such integrations make it easy to tag a lead source and follow through to the close for solid ROI tracking.
Cohn’s team tags all their leads as “hot,” “nurture,” “watch” and “archive” in BoomTown and dotloop, then follows up with the relevant email and text nurture campaign messaging. When deals close, the team reviews the source and tracks it in a master database.
“Admins can see everyone’s transactions and the team lead can access reports,” she says. “This helps track and measure results and develop a successful action plan.”
While 2020 has been good to most agents in one of the most unexpected real estate business years on record, most coaches agree that it’s a good idea to have a backup goal heading into 2021.
“You might start a property management company, look at new construction or speculative houses. Find a niche that complements the other markets. There’s always going to be a market going up or down,” Cohn says.
Johnson advises having a realistic outlook and recommends setting some backup goals. “Buying power is at an all-time high, and I’m a big fan of big goals, but I wouldn’t make any major expenditures with so many unknowns heading into the new year,” she says.
For team leads and brokers, goal setting requires a well-grounded strategy in determining how many leads to distribute among their agents, as well as when to increase new hires and how to hold agents accountable.
Based on years of analyzing his own teams data, Cohn has found that approximately 2.5% of all leads convert into a deal:
If a team lead allocates 30 new leads to an agent every month, the typical agent will be working approximately 50 to 100 leads at any given time — “the optimal number for lead conversion,” says Cohn.
While it may be tempting to throw more leads at every agent, leads and brokers need to understand that more leads won’t necessarily translate into more deals. “There’s a point of diminishing return when you give an agent more leads than they can properly execute, which means you’re overspending,” Cohn notes.
Also as a general rule, he recommends team leads add one agent for every 30 new leads generated.
Of course, finding the right mix of leads is key. Considering 20% of the spend typically yields 80% of the results, Cohn coaches teams to look closely at those activities that net the top 70-80% of their results.
“Diversify your lead gen spend,” he says. “Put 70% of your spend into the top three lead gen sources like Google Ads, Facebook and Craigslist, and reserve 30% for smaller or experimental sources.”
New brokers will want to consider their agent cap when goal setting for the new year. If an agent caps at $25,000, and the broker wants to net $1 million for the year, divide the goal by the cap to help plan for recruiting, keeping in mind that only about one-third of agents cap, says Cohn.
$1 million / 25,000 = 40 agents
For brokers, the goal is simple: To attract enough quality talent to sustain the momentum year after year. This takes a recruiting plan that defines how many recruiting appointments they’ll need both monthly and weekly to meet their goals.
The same general principles Johnson created for agents works for recruiting brokers. “Brokers need to have a full pipeline to recruit prospects with people taking the test and in training. It’s all done on purpose,” she says. “So if I want to recruit three people a month, I might need to meet with three people a week.”
Once the recruiting goal has been set, brokers will need to track the activity that creates the wins and define the right mix for attracting talent, whether it’s recruiting through Facebook, email or mailers to agents, says Johnson.
Brokers can also assign a value to each recruit to improve their predictive planning. “If I want to grow my operation by X million in sales or X%, I need to assign the value of a person’s contribution to the team. What is the top-line revenue that these agents will bring to my team? The goal with new agents is to get them up and running quickly so they’re adding to your bottom line.”
Whether agent, team lead or broker, goals must be owned, which is why Letheby tells all of his agents to write down their goals, preferably by hand, and to read them twice a day.
“The trick is you read it in the emotion and energy you will feel when you accomplish that goal,” he says. “When you write it out by hand, you are actually doing something with your subconscious and making it more powerful. You’re building a burning desire to do everything you can to motivate yourself to make those calls and get past your fears.”
Letheby recommends agents, teams and brokers post their goals so they’re within sight throughout the day. It may be a chalkboard in the kitchen, a note on a bathroom mirror or the wallpaper on a smartphone, but goals must be seen and heard as a daily reminder, he says.
Now is the time to plan and set goals. Considering it takes 60-70 days on average for a listing to close, and with less than two months until the new year, there’s no better time than today to start closing that first house of 2021.