Peter Drucker was famous for saying:
“If you can’t measure it, you can’t improve it.”
After all, you can’t expect to hit your New Year’s weight loss resolution if you don’t know where you started. It’s like trying to run a race without a starting line.
There’s another great saying that was famously spoken by your coach, or maybe by your parents—or maybe even by your school teacher when you were upset about a poor grade:
“You get out what you put in.”
Or perhaps you’ve heard the more forceful version: “Garbage In, Garbage Out” (G.I.G.O.). However you spin it, it’s often uncannily accurate.
So what do these two famous sayings mean to real estate brokers?
With the new year barely out of the gate, setting profitability goals is still on a lot of brokers’ minds. Some brokers are doing deep dives into their datasets with the hope that they might see a pattern that helps them strike gold.
But the problem is, having data just isn’t enough for a broker to set workable goals if the data doesn’t help them focus on the right key performance indicators (KPIs). Brokers who experience this challenge—or the challenge of having no data at all—are left scratching their heads and wondering how they can improve what they haven’t measured.
Often, this leads to setting arbitrary goals, which leads to…well, see the above description of G.I.G.O.
Peter Mueller sees this problem all the time. An industry vet of more than 30 years, Mueller has lived and breathed real estate since he was 19 years old. As CEO and founder of The Profit Centre, he speaks to thousands of brokers and agents annually.
“My passion is helping brokers make their business truly profitable,” said Mueller. “A common roadblock faced by brokers is that they have data, but they don’t know what to do with it—or even worse, they don’t feel like they can trust their data.
“This makes it really hard for them to get an operating view of their business and identify ways to improve profitability.”
Meet Lone Wolf Insights.
Stepping up to solve this industry-wide data conundrum is Lone Wolf Insights. Insights is a new solution coming to Lone Wolf’s broker suite that translates brokerage data into plain language.
Specifically designed to give managing brokers an operational view of their business, Insights provides brokers with prescriptive information they can use to run their business, manage their agents, and improve profit margins.
“Insights is something I wish all my clients had,” said Mueller. With on-demand access to KPIs like company dollar, sales volume, and GCI, Insights gives brokers operational snapshots that are customized to their business and comparable across timeframes.
“One thing I love about Insights is that it allows a broker to specify exactly what goes into calculating their company dollar,” Mueller continued. “This is one area where brokerage data tends to get polluted, which makes it very difficult to set profitability goals.”
Clarity of numbers leads to the logical conclusion.
In an industry that often focuses on vanity metrics, it’s more important than ever to cut through the noise, especially when it comes to setting goals.
“Some brokers get so caught up in focusing on volume and recruitment that they overlook the profitability levers that are right in front of them.”
- Peter Mueller
Having run profit analyses on over 700 brokerages, Mueller has developed a normalized method of analyzing profitability. Part of his aptly-named “The Profit Analysis” focuses on being able to draw conclusions from clean, pertinent data.
“When you have clarity of numbers, it leads you to logical conclusions,” Mueller explained. “For example, once you have a clear picture of which agents are achieving your profitability goal, only then can you figure out which agents should receive certain compensation plans.
“But it all starts with finding the right numbers so that you can measure it, set goals for it, and improve it”.
Launching at Inman Connect New York on January 28, Insights has set its sights on providing this clarity of numbers—on giving that 20/20 vision into brokerage operations. And on helping brokers change the G in G.I.G.O. to “Gold.”