GUIDED BY THE STARS

An­ton Babkov

Elite Agent - - CONTENTS - An­ton Babkov is CEO of Rexlabs, a team of mul­ti­dis­ci­plinary en­trepreneurs who iden­tify needs, de­velop ideas and de­fine them in dig­i­tal prod­ucts. For more in­for­ma­tion visit rexlabs.io.

Be­fore some bright spark in China in­vented the com­pass in 206 BC – the west didn’t get their ver­sion un­til AD 1190 – nav­i­ga­tors used the North Star to find their way home (trivia!).

To­day, North Star met­rics (NSMs for short) are used to guide the ‘hack­ing’ tech­niques used to drive the growth of many of the fastest grow­ing start-ups and best-known tech gi­ants in Sil­i­con Val­ley. For Uber, it’s num­ber of trips. For Airbnb, it’s nights booked. For Face­book, it’s daily ac­tive users.

If your NSM is im­prov­ing, it’s likely that one of the other met­rics im­por­tant to you is go­ing in the same di­rec­tion.

Take Uber: if the num­ber of trips is in­creas­ing, it means: the num­ber of re­peat users (users who take more than one trip) is in­creas­ing the num­ber of new users (new trips) is in­creas­ing the num­ber of driv­ers on the plat­form is in­creas­ing

Be­fore you set your NSM, it’s im­por­tant to un­der­stand that the NSM is the means – not the end it­self. Once you’ve set an NSM you’ll be able to use it to drive a sin­gle­minded fo­cus on mea­sur­ing and im­prov­ing all the other vari­ables that af­fect how much you can grow your NSM – to drive sus­tain­able growth.

Ready to start us­ing a start-up men­tal­ity to grow your busi­ness?

SUS­TAIN­ABLE GROWTH IS THE GOAL

Run­ning a real es­tate busi­ness is a com­plex ecosys­tem of many mov­ing parts. If you add up your monthly sales vol­ume, it gives you a ba­sis to say, ‘I’m not gen­er­at­ing enough rev­enue; I need to get more sales’. But how do you get more sales? The clas­sic ap­proach is sim­ple: make more di­als, get more ap­praisals, list more and sell more! Or is it? The think­ing be­hind the NSM is to drive growth that is sus­tain­able rather

than sur­face level. Sur­face-level growth might look and feel good, but it’s with­out di­rec­tion – and, as the name sug­gests, it re­ally only scratches the sur­face of what you can achieve. Sus­tained growth, on the other hand, is the re­al­is­ti­cally at­tain­able growth you could main­tain with­out run­ning into cash flow prob­lems, or stag­nat­ing.

Long-term, sus­tain­able growth is born of ac­tion based on data-fu­elled in­sight. Achiev­ing that kind of growth starts with nail­ing your NSM.

STEP 1 Choose your NSM

Ev­ery­thing im­por­tant to your agency should be ac­counted for, and di­rectly or in­di­rectly af­fected by your NSM.

Your NSM must be spe­cific and mea­sur­able – and it’s likely to be rev­enue or vol­ume fo­cused. You’re in the sales game, af­ter all. How­ever, it won’t al­ways stay the same. Your NSM should change as your agency grows and the in­dus­try evolves.

Take Face­book. In its in­fancy, Face­book’s NSM was monthly ac­tive users. Then, as com­peti­tors en­tered the space and the in­dus­try changed, Face­book started fo­cus­ing on its daily ac­tive users. As the in­dus­try con­tin­ues to change and com­peti­tors like Snapchat be­gin track­ing hourly ac­tive users, Face­book’s NSM might change again to re­flect that.

So your NSM may be 20 new list­ings across your agency per month. How­ever, if your agency grows and your core area ex­pands to in­clude a sub­urb where prop­erty prices are sig­nif­i­cantly higher, your NSM may be­come rev­enue based.

STEP 2 Growth hack­ing

Now you need to cre­ate a mech­a­nism around your NSM to help drive growth. To do that, you need to map the vari­ables that de­fine your met­ric.

For ex­am­ple, if your NSM is num­ber of list­ings per month, the first vari­able will be num­ber of calls and the sec­ond will be num­ber of ap­praisals. These steps are the in­puts and your NSM is the out­put.

So if you know that your con­ver­sion ra­tio from con­ver­sa­tion to ap­praisal is 10 per cent and your ap­praisal to list­ing ra­tio is 50 per cent, then you know you need to make 400 calls to get 20 list­ings per month.

This is where plenty of agents get to and then stop. But it’s not just about mak­ing more calls to book more ap­praisals to win more list­ings; it’s about re­fin­ing and im­prov­ing your pro­cesses to do bet­ter.

Where is your team fall­ing down – and why?

Are they mak­ing plenty of calls, but get­ting called in for barely any ap­praisals? Fo­cus on their prospect­ing. Do you need to work­shop some scripts? Learn, train and buy books.

Or are they get­ting called in for lots of ap­praisals but win­ning only a small por­tion of those as list­ings? Your ef­forts would be bet­ter spent re­vis­ing how your agents are pre­sent­ing to po­ten­tial sellers. Re­view your mar­ket­ing ma­te­rial. Are you of­fer­ing enough ser­vices? Are you dif­fer­en­ti­at­ing your­self from com­peti­tors with some­thing like dig­i­tal mar­ket­ing?

If your NSM is rev­enue based, your list-to-sell ra­tio would be a sig­nif­i­cant vari­able. If you take 20 buy­ers through a prop­erty and re­ceive zero of­fers, work out why. Go through your buy­ers’ feed­back. Is it over­priced? Can you set a more re­al­is­tic mar­ket price? Or maybe you’re mar­ket­ing to the wrong de­mo­graphic – or across the wrong channels.

It comes down to analysing your data and us­ing it for deeper in­sight. Work out your con­ver­sion ra­tios and de­ter­mine whether they’re be­ing in­flu­enced by ex­ter­nal or in­ter­nal fac­tors. If it’s be­cause the mar­ket is poor, then you may sim­ply need to ramp up the vol­ume of calls. But if it’s in­ter­nal then train­ing should be your fo­cus.

STEP 3 Mea­sure and ex­per­i­ment like a start-up

You’ve likely also heard of the say­ing, ‘It’s a num­bers game’. Well, the dif­fer­ence be­tween tra­di­tional sales and start-ups is that tech com­pa­nies fo­cused on growth are fas­tid­i­ous with mea­sure­ment.

You know all the vari­ables that con­trol your NSM – so how do you mea­sure those vari­ables? How do you as­sess staff per­for­mance? What about your own ac­tions?

Say the vari­able im­pact­ing your NSM the most is the num­ber of calls your team is mak­ing. Your con­ver­sion rates are great, but there sim­ply aren’t enough hours in the day.

You could tackle the prob­lem di­rectly: Min­imise the wasted time be­tween calls. Time how long it takes for your team to go down a call list and man­u­ally dial num­bers; you’ll be sur­prised how long it takes. Should you in­vest in a di­aller?

An­other ap­proach might be to re­think your start­ing as­sump­tion: Are calls the whole so­lu­tion?

With the right tech, per­son­alised emails and let­ters can be sent to thou­sands of po­ten­tial sellers.

If you send out in­for­ma­tion ahead of a call, the peo­ple you con­nect with al­ready know a lit­tle about your agency – im­prov­ing your con­ver­sion rates.

Less time ex­plain­ing who you are also min­imises call time, giv­ing your staff more time to make calls that con­vert.

Self­ishly, we can point out here that a good real es­tate CRM can let you send a mail merge email or let­ter to thou­sands of peo­ple in a few sec­onds of work. What’s more, good CRM re­port­ing can be used to track how your ‘ex­per­i­ments’ in driv­ing growth are im­prov­ing your con­ver­sion, vol­umes and other fac­tors.

STEP 4 Keep go­ing

Set­ting an NSM for your agency will give pow­er­ful fo­cus to your growth ef­forts, and can be the driver to dig deeper into your data and cre­ate levers to drive fu­ture growth. It can help unify your team on what suc­cess looks like, and lay the path to get there. Once you start, keep go­ing; try new things and watch as the busi­ness rolls in. 

LONG-TERM, SUS­TAIN­ABLE GROWTH IS BORN OF AC­TION BASED ON DATA-FU­ELLED IN­SIGHT. ACHIEV­ING THAT KIND OF GROWTH STARTS WITH NAIL­ING YOUR NSM.”

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