I pay bills on the 20th of every month. This happened to be this past weekend. I have a process I follow when I pay bills. The first thing I do is log all of my balances. Whether it is the balance in my checking account, investment account, credit card statement or mortgage, it gets logged. I even track the estimated value of my home using…yep, Zillow. I know, there are probably better tools out there but it auto syncs into my Mint account, which makes it super easy. I figure it gets me in the ballpark.
Then I go through and pay the bills. Review my account balances and determine where I need to move money. Do I set aside money for the kid’s college? Do I move some money into investments? What debts should I pay down or off? Then, I track the amount I “saved”. The amount saved is anything I have set aside for the future which normally includes kids college savings and my investments.
For the last 15 years or so, with the occasional hiatus, I have been tracking everything that goes into my mouth. I have also been tracking my workouts more recently (the last three years or so).
What do these two things have in common? Tracking my actions helped me to produce some amazing results.
Our net worth has increased significantly since I started tracking our spending, saving, etc. And I have lost over 75 pounds in the last 15 years or so with a significant improvement in my body composition (body fat vs muscle).
I don’t find it coincidental that when I track something, positive results follow.
TRACK what you want to ATTRACT
How can this principal of tracking apply to your real estate business?
The best way to answer this question is to share what it has done for our mortgage business since they are closely related.
Over the past 6 years we have tracked just about every metric you can imagine, but let me share with you what we track for our buyers between the lead and pre-approval process:
- Lead Received (date and time)
- First Attempted Contact (date and time)
- Made Contact (date and time)
- Loan Application Sent (date and time)
- Loan Application Received (date and time)
- Pre-Approval Issued (date and time)
Why We Track
Tracking these items have done a few things for us.
First, it provides us clarity on whether we are doing the necessary activities to produce the leads we need.
Second, it helps us in tracking the progress of each customer.
We can also calculate conversion rates for different stages of the process.
Lastly, we can make our business more predictable based on cycles in our business, timing along the sales process, and so on.
Results from Tracking
Maybe some numbers will help show you what I mean:
- Our pre-approval to close conversion rate is 68.71% which is down 4.42% from last year
- We have 2.04% more leads than we did over the same period last year
- The average loan amount closed is up 13.90% compared to last year
So, What?
Great, now we have a bunch of data and some calculations based on that data. Now what?
Where should you focus your attention?
Every business has a weakest point. Do you know your weakest point?
Is it getting the business? Converting the business? Reducing the cost to obtain business? Your limitted amount of time?
If you have been tracking your business you will know your weakest point and that is exactly the point. You need to track to know. Otherwise you will be guessing. And you might be right if you guess, but you could be terribly wrong. Spending time, money and other resources on improving something that doesn’t need improving or, worse, not noticing something that needs your attention.
The Scorecard
Over time of tracking our business we have created a Scorecard. It is an at-a-glance sheet which provides us an overview the critical parts of our business so we can make informed choices.
Basically I have 9 areas of my business I track. Based on whether the metric is improving, staying the same of declining I turn the box green, yellow or red respectively. With this we can easily pinpoint where we need to focus to make adjustments.
The Crystal Ball![](https://www.lendingahand.com/wp-content/uploads/pexels-photo-369384-300x200.jpeg)
Creating a predictable business should be the goal for anyone in business. If I do X, then Y will happen. Without tracking your business this is impossible. Sure, you might know if you make phone calls you can generate business but how many phone calls and how much business, and when will they close?
The more data you have, for the longer period of time the more predictable your business becomes. You start to uncover trends. You start to hone in on conversion rates and the sales strategies that provide you with the biggest bang for your buck (both monetarily and with your time).
Stop guessing and get yourself the crystal ball that has all the answers…through tracking your business.
How to Track
Don’t over complicate this. You pick a method that works best for you.
To give you the best results I would suggest something that is on a computer. Sort-able, searchable and can calculate numbers for you. Which is why I like spreadsheets like MS Excel or Google Sheets.
You could do it on index cards, your calendar, a fancy CRM (like us), or some other tool. Ultimately, it doesn’t matter much.
Start Small
Pick one to two metrics to start. Don’t get caught up in everything you might be able to track, and instead focus on tracking a few things to get used to the discipline of tracking. If you go too big at first it will be overwhelming and frustrating and you won’t continue with it. Start small.
Continual Improvement
Once you get into the habit of tracking a few metrics, check and see if the tracking of those metrics can be improved. Rather than just tracking the number of leads you get, track the source of those leads, or when they were received, or the type of customer (buyer vs seller, first time buyer vs repeat vs investment).
Then, add more metrics to track gradually, over time…a long time.
When we first started tracking we probably tracked 5 things. We now track multiple variants of each item we track and have about 100 data points we collect, and can then analyze. I will tell you it is easy to track what we track now and we have a ton of info that allows us to make very disciplined and focused decisions in our business.