Realtor Production Standards – Learn the production standards that top brokers and team leaders hold realtors on their teams accountable to.
When it comes to successful real estate teams, establishing Realtor production standards are the secret sauce. It is essential to understand why they work, and also how to create them and stand by them.
Even if you don’t have a team, and never plan on being on a team, you should still understand how Realtor production standards work. You will always be working around teams during your career. And, it’s a good idea to understand how they function to see if being on a team or leading a team may actually be a good fit for you.
Today we are going to go over the key component that makes a real estate team successful — implementing Realtor production standards. Specifically, we will talk in detail about the Matching Standard.
VIDEO: Realtor Production Standards – The Matching Standard
First: use a team scoreboard
Creating a scoreboard that tracks each team member’s actions from week to week is essential. In the video within this blog, I walk you through how I’ve set up a scoreboard for teams, and many of our clients use this method. The Closed YTD (year to date) total is the most important measure in this tracker. This Closed YTD includes the total number of transactions closed, and of that number, how many the agent generated themselves and how many the team fed the agent. These team-generated leads either come from online leads that the team has paid for or another agent’s SOI.
Good real estate teams will meet every single week to go over these numbers together. This is what all top producing teams do.
Agent-generated closing vs team-generated closing
Breaking down these numbers on your team scoreboard is crucial. Showing the numbers for how many closings the agent generated themselves from their own SOI as well as how many were from the team needs to be displayed. If you don’t track these numbers, you will have retention problems. You will lose agents left and right. Your agents need to know what percentage of their business they are getting from the team.
Lead generation vs. lead conversion
This is the next fundamental concept for your real estate team members to understand. There is a difference between lead generation and lead conversion. Lead generation refers to any lead that was created by a given entity. So if the lead was agent-generated, that agent harvested that lead independently by their own means. If it was team-generated, it came from an outside source within the team — not from the agent who converted the lead.
Your team members must understand that the team is providing them with these lead sources. Sure, they may have converted the lead, but they did not generate the lead. It’s not the same thing.
The “But For” Test
This is an important test that you can use to determine if the lead was agent-generated or team-generated if there is any doubt. “But for the existence of this team, would this lead have been generated?” If the team paid for the Zillow lead, nope! If the team leader generated this lead from their own SOI, nope!
A tough one to determine revolves around leads generated from an open house. Technically, but for the team’s listing, there wouldn’t have been an open house at all. And if the lead came from the open house, technically it would have been a team-generated lead. That said, I let the agents count the open house generated lead as agent-generated because I want to encourage agents to hold open houses. I see teams go both ways in this scenario.
Why the Matching Standard
When it comes to choosing Realtor production standards, I promote the Matching Standard. The number of closings that an agent on the team generates on their own should match the number of closings they get as a result of a team-generated lead. Obviously, it doesn’t always have to be dead-on, but it should be close. It shows that the agent is holding up “their end of the deal” and pulling their own weight in the team. It demonstrates that they aren’t just feeding off of the team’s leads, but that they are bringing their own leads to the table. This is an essential metric by which to measure the agents on your team!
With our coaching clients, we have found out that by implementing the Matching Standard in teams that are struggling in one way or another, it will solve 90% of the problems. This is a proactive solution because it solves problems before the problems even happen. The Matching Standard changes your team or brokerage fundamentally, with a new organizational structure. The primary reason that a team or organization fails is that there is no Realtor production standard in place.
The Matching Standard can also alert you to team members that may be a flight risk. For example, if your team member is generating significantly more closings on their own than from leads they receive from the team — that’s not good. That’s a sign that they might be starting to reevaluate whether or not they are benefitting from being on your team at all. In fact, oftentimes when you factor in commission splits, this agent may actually make more money if they leave your team! It isn’t financially worth their while if they aren’t getting enough team-generated leads converted.
Realtor production standards keep everyone honest
Setting up your Realtor production standard will keep both the team leader happy and the team members happy. Every closing is tracked and put into its category, and with weekly meetings, the numbers are out in the open. Each team member can clearly see how many leads they are closing that came from own their own SOI, and how many they are closing that came from the team.