Does all that chatter out there have your buyers, sellers, and even members of your team, feeling uncertain? It’s time to get back to the real meat of what should drive everything to effectively control the future of your business: the data.
Like banking, healthcare, and other major industries, real estate relies on data to drive critical decisions. At Weichert®, we use the power of real estate data every day to steer the work we do. Likewise, we coach our broker-owners to know their numbers and the market’s numbers, so they can make better business decisions, as well as inform and clarify the narrative to their agents and clients.
You can think of real estate metrics in different ways. For example, there’s traditional real estate data analytics we all live by, such as the housing market inventory, transactions, average prices, and year-over-year changes. And then there are nontraditional metrics that can provide insight into potential future trends, such as an area’s median age or the change in number of coffee shops. According to McKinsey & Company, “Being slow to identify subtle trends means leaving money on the table. Conversely, being a first mover on a compelling (and perhaps inconspicuous) opportunity translates into significant advantage.” At Weichert, we’re constantly connecting these dots.
Real estate data is always at our fingertips, literally a click away, from industry resources like Multiple Listing Service® (MLS) and National Association of REALTORS® (NAR). There’s also your own data, which can include the more nontraditional, “intuitive stats.” These are the insights that you’ve garnered about your customers and community over the years. For example, you may know of a particularly desirable block within a larger sought-after ZIP code that buyers seek out over and over again.
In today’s market, control is important for real estate professionals. Not as a way for disconnecting from reality, but rather as a strategy to shape the narrative in your favor. So, how can you take all of these pockets of information to control the future of your business? The following six tips can help:
- Ignore the noise. The sky is not falling, and real estate is not crashing. Period. If the mindset around you is not fact-based, shift it with real data. Focus on the numbers and the fundamentals that you know so well to prove the point that real estate is gently transitioning back to a normal market. It’s the antidote to media hype.Know your numbers. Do you know your numbers? Most of us are quick to say, “of course.” Go a little deeper and see what you discover. For example, do you pay your bills with revenue or gross profit? What’s your customer acquisition cost? Marcus Lemonis, entrepreneur, financial literacy advocate, and television personality, offers this insightful “Do you know your numbers?” quiz on his website to help you get into the weeds of how you run your business from a financial standpoint.Focus on your ROI. How can you measure ROI (return on investment) and use it to control your business? Quite simply, ROI tells you your profit or loss from an investment or spend after accounting for its cost. It’s a simple black-and-white metric for measuring the success of any given investment, whether you are talking about dollars or time. You can use it to rank costs and investments and prioritize activities that give you the greatest rate of return. If you aren’t already, practice looking at ROI from different angles of the business and get comfortable working with your numbers.Run your numbers frequently. According to Forbes, “When you run regular financial reports, you’ll see how much you’re spending on certain expenses and know to question the expenses when they appear higher than what you planned. For example, you may notice how high your marketing expenses are, and once you’ve identified that, you can monitor those expenses.” Running the numbers and focusing on your ROI go together like peanut butter and jelly.Maximize the capabilities of your CRM. There’s the external data that you leverage, and then there’s your own internal data that’s a real treasure trove. Your customer relationships management (CRM) system should allow you to see the total picture of sales in progress, browse business analytics for valuable insights, and identify coaching opportunities. Weichert broker-owners have access to all the capabilities of myWeichert® powered by kvCORE technology platform, which is the gold standard CRM for the real estate industry. If you don’t have a CRM that works as hard as you do, request a demo of ours so you can see the difference.Practice your narrative. This brings us full circle back to #1: Ignore the noise. Buyers and sellers, and even your team, may be feeling uncertain these days. As a leader, you can guide the dialogue to a calmer, more accurate place by leveraging the data. Focus on relevant facts and statistics from reputable sources to carry your communications. Pepper in some real data in your emails or face-to-face meetings to prove your point that the real estate market is in a solid place. It also shows that you have all the skills and knowledge to keep things under control.
See how an affiliation with Weichert will help you leverage real estate data analytics to control your business. Contact us today.