Peak Development works closely with top business brokers in the nation. Below, you will find tips, hints, resources, and information on making all brokers in our industry better.
Important KPIs in Business Brokerage:
- Conversion Rate
- Peer Ranking
- Peer Ranking
- Peer Ranking
The first, leads, should be tracked at the agent level and the source level. Web leads should be tracked separate from business development leads, and separate from other sources. Often, lead conversion rates depend on lead source. Ideally, this is tracked in a CRM and would be available 24-7. Brokers should be able to easily click into each section to find not only recently received leads but also all leads ever received.
Conversion Rate: Leads
The conversion rate from lead to listing is one of the most important leading indicators of success in business brokerage. Top offices often say: “If you can’t prospect, you won’t be able to close.” Being able to effectively convert a lead into a listing is a desirable trait of any business broker. Sometimes brokers would rather, “Take the order” vs. “Effectively convey why now is a good time to sell.” This will become apparent in their conversion rate. If someone receives 10 leads and has the same reason for each of them “Not being ready to sell” this would be a sign to shift to another broker. Top performers operate above the 30% mark. Average is 20% to 30%. below average converters operate in the 10% to 20% range while laggards operate below 10%
Peer Ranking: Leads
Disproportionately give top performers more leads, however, watch for brokers who list deals outside the norms of reality. If they are listing companies just to boost their conversion rate to get more leads they may clog the listing pipeline because those deals may never close. Leads should be given in “Blocks.” Give an agent 10 leads and then wait for them to convert two. If that conversion rate is too steep given the lead source, adjust it until you find a good medium and stick to it. Brokers can frequently complain about lead quality, no matter the source, no matter how warm or hot the lead. If a broker can’t convert more than the minimum, top offices remove them from leads until they convert above the minimum. Once they get above the minimum, give them another “Block” of leads. Always circle back on leads every few months to stay front and center. Peer pressure and ranking often increases conversion rates. Nobody wants to be “Below the line.”
The Listing KPI is arguably one of the most important KPIs for business brokerage. They are a leading indicator of success and tracking who’s going to have closings coming down the pipeline. This should be ranked at the agent level and the office level. Each agent should track their new listings per month metric.
Listings: Peer Ranking
A simple listing chart with all brokers and current listings should be used in a weekly sales meeting. Top offices run quarterly contests to incentivize brokers to stretch.
The offer tracker lists all pending and accepted offers. Start to look for trends or “Sell through rates.” The sell through rate is the percentage of listings that end up selling. The offer tracker will give an office insight into future earnings by agent and by the total office.
Closings are the ultimate KPI. Closings are where the broker and the office earn a financial reward for months and sometimes years of effort. Top offices rank listings and closings on the same sheet and reset the number each calendar year.