Am I reaching my full sales potential as a licensed Realtor? Understanding whether you’re truly meeting your sales potential in residential real estate can be a bit challenging. Last week we looked at the most direct feedback on your potential: how may homes are you closing every year?

But ultimately that feedback is binary (enough/not enough homes sold) and doesn’t offer much feedback or guidance on how to start hitting your potential. To get more insightful feedback on your sales skills and where they are not up to your real potential, let’s look at conversion rates.

Understanding the Sales Funnel

Every sales industry has a sales funnel (recall the Realtor sales funnel here). Moving a lead down the real estate sales funnel’s various stages requires a distinct set of skills for each step. By tracking your conversion rates from one step to the next, you can pinpoint where you might be underperforming. Let’s examine the typical stages of the funnel and discuss the ideal conversion rates for each:

1. Contact to Appointment: The initial step involves converting conversations with prospects into scheduled appointments. A healthy conversion rate here would be around 5%. This means that for every 20 interactions you have with people about real estate, you are booking at least one appointment. This number can vary depending on what lead sources you are most frequently working. This ratio measures your lead conversion skills.
2. Appointment Booked to Appointment Kept: Of the appointments you book, how many do you actually conduct? That is to say, what percentage of the time does the prospect actually show up to the appointment? This can be a non-issue with referrals, and a real challenge with strangers met over the Internet. If you are meeting strangers, you should be keeping at least 75% of these booked appointments. This rate measures your ability to qualify prospects, create urgency, and offer unique value.
3. Appointment Kept to Signed Agreement: Of your appointments kept, your goal should be to sign 75% or more into buyer-broker agreements or listing contracts. This rate shows how effectively you listen to your clients, present your value, and handle their objections.
4. Signed Agreement to Under Contract: Moving clients from signing an agreement to work together to going under contract should happen with about 75% of your signed clients. Broadly speaking, the rate measures your sales skills, fiduciary skills, and influence skills.
5. Under Contract to Closed: Finally, approximately 95% of the contracts you put under contract should close. This rate measures your ability to set expectations and to problem-solve.

Evaluating Your Skills

Each step in your funnel reflects different capabilities that can generally be organized into three different categories:

• Lead Conversion Skills: Necessary for turning conversations into appointments.
• Presentation Skills: Vital for converting meetings into signed agreements.
• Expectation-Setting Skills: Crucial for moving contracts to closings.

How to Improve Your Conversion Rates

If your conversion rates are lower than these benchmarks, consider the following strategies:

• Enhance Your Training: Invest in training programs that focus on improving your negotiation, presentation, and communication skills.
• Use CRM Tools: Implement or better utilize CRM tools to track your interactions and follow-ups systematically.
• Peer Learning: Engage with more experienced agents in your network or join a mentorship program to learn best practices.
• Get Help: Consider joining a sales team where sales skills are a greater focus, or hire a sales coach directly.

Know Your Numbers

If you aren’t already tracking these figures, start now. Understanding where you stand is the first step towards improvement. If you need tools or resources to begin tracking, don’t worry! I’ll be covering that topic next month and providing three different options.

Final Thoughts

For personalized advice on evaluating and improving your conversion rates, feel free to contact me. I’m here to help you maximize your potential and turn challenges into opportunities for growth.

Let’s crush some commissions and grow your cashflow!

Peter Chabris

Lockbox

CEO, The Chabris Group, Cincinnati

Keller Williams Seven Hills Realty