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How to improve real estate agency productivity in 3 minutes |
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KPI stands for Key Performance Indicators. A KPI is used to measure how well the real estate agency or its employee is accomplishing corporative goals and objectives. The real estate agency typically outline a number of KPIs to evaluate progress made in areas where performance is harder to measure. KPI can be used to specify objective organizational and individual goals such as sales volume, outturn, average commission earned per salesperson, salary expense, average revenue per sales, earnings, properties sold per salesperson, etc. Let's examine here several KPIs for the real estate agency:
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Outturn This performance indicator shows accomplishment of a plan in percentage and calculated as a ratio between total price of sold properties and sales plan. The sales plan is specified by head of department or real estate agency Director. In order to get KPI "Outturn" you need to create the following custom fields in VIP Task Manager: |
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Sales volume is counted for Sales department and equal to the sum of the property prices. For example, when the realtor has a new client, he creates a group "John Smith" in the database and adds the price of property in the group custom field "Price". VIP Task Manager sums up all property prices and outputs total amount. The sales plan is defined by the real estate agency management. For example, head of Sales department works up a certain plan and types it in the custom field "Sales plan" of the group "Sales Department". When creating the custom field "Outturn" you need to insert a formula that outputs ration between custom fields "Sales Volume" and "Sales Plan" (for formula details see the screenshot). Outturn will be displayed in percentage. KPI "Outturn" can be counted not only for Sales Department, but for Lease Department as well as for the whole real estate agency. |
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Setting individual sales plans Indicators considered above characterize the real estate agency activity at a level of Sales department. However you can count performance efficiency per realtor. For example the head of Sales Department works up individual sales plan for realtor, calculates total value of property the realtor sold and then gets outturn. This outturn can be compared with outturns of other realtors. So the head can define which realtor gets bonus and which one is to be penalized. |
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| You can apply already existing custom fields: "Sales plan", "Sales volume" and "Outturn". In order to use these indicators you need to enable them for the following groups: "Realtor 1", "Realtor 2" and "Realtor 3". So the sum of all individual sales plans per realtor will be sales plan of the Sales department Commission earned per realtor The majority of realtors' income comes from the commission on making deals. Usually the real estate agency defines the rate of commission. It could be 1%, 4%, 10 % and other. For example, the rate of commission is 1%. It means that the realtor gets income of 1% from the price on client's property. To calculate commission per realtor, you need to create the custom field "Commission". When creating this field, you need to input the formula (multiplication between the custom field "Price" and 0.01). The realtor can use this indicator to define how much money he earned. |
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The head of Sales department can count up average commission per real estate transaction. It can be applied at strategic planning the future salary costs of the real estate agency. For example he can build and print out monthly reports on the custom filed "Average commission" and store them. Every quarter or half of a year the head compares average commissions and analyzes how a realtor's salary (commission) changes. So he can forecast the future real estate agency costs on realtors' salary. |  |
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First of all you need to create the custom field "Average commission". In order to calculate this custom field, you need to right-click on the group "Sales department" and go to "Custom field option". Then choose average value for the custom field "Commission" and check the point "View in preview section" on. So VIP Task Manager will output the average value of the realtors' commission (average commission per transaction).
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