Throughout my 25 year career in the Multifamily Sales space, I’ve worked with thousands of property managers, and one thing has always stood out to me: they’re constantly juggling so many different responsibilities.
Successfully running a multi-million dollar asset requires property managers to fill many roles, often all on their own. Among a property manager’s many roles is one that’s easily overlooked: Sales Manager. When you think about leasing agents, you might not immediately think of them as salespeople. But that’s exactly what they are. They’re the ones actually selling clients on the property. That’s why it’s important for property managers to manage their leasing agents just as a sales manager would manage a sales team. If you’re like most property managers, managing a sales team might feel unfamiliar; it’s hard to know what a successful salesperson looks like if you’ve never managed one before.
As a veteran in the sales space, and having hired and developed hundreds of salespeople throughout my career, I’ve watched many property managers make the same easily-avoidable mistake when managing their agents: they pay too much attention to the lagging indicators and overlook the leading indicators.
Let’s break down what that means and how you can make the move to manage your agents based on the leading indicators.
What Is a Lagging Indicator?
Lagging indicators measure the actual results of the sales process. What does that look like for property managers, specifically?
Think of it in terms of tour-to-lease ratios. Let’s say your leasing agent has 30 tours in one month and they turn 10 of them into leases. Knowing this agent’s tour-to-lease ratio is great when determining and measuring long term performance goals, but it doesn’t leave much room for improvement during the actual sales process. In fact, identifying weaknesses in your leasing team at the point of tour-to-lease conversion can take two to three months to fix, which can quickly spiral into a vacancy issue.
Perhaps there was an opportunity to correct course and turn more of those 30 tours into leases, but you weren’t aware of what was happening during the actual sales process. This is a prime example of the flaws with managing to the lagging indicators: it’s really difficult to directly improve them and get your agent back on track if their “results” are already in.
While you should still track the lagging indicators, take a deeper look at them and you’ll find that they’re really a product of different leading indicators, all of which can still be improved upon during the sales process.
Leading Indicators and Why They Matter
Let’s go back to the example of the agent’s 30 -10 tour-to-lease ratio. As a sales and property manager, how can you get in front of that result so that your leasing agent has the best possible ratio? The answer is simple: manage to the metrics or the leading indicators.
One major leading indicator to watch is the number of inbound leads your agents are receiving. If your agents aren’t getting enough leads, that also means they aren’t touring enough prospective tenants, stunting their tour-to-lease ratio from the start. Lead-to-tour conversion is another leading indicator. If your agents are getting plenty of leads but aren’t converting them into tours, it’s going to be pretty difficult for them to hit their leasing targets. The last leading indicator is the total number of tours booked. This goes hand in hand with lead-to-tour conversion and should be monitored frequently so you know if your agents are on track to hit their leasing targets.
How to Manage to the Leading Indicators
Start by scheduling weekly 1:1’s with each agent. Give your agents access to the data so they know how many leads per week they’re managing, what their lead-to-tour ratio is, and what their closing ratio is. Every week they should come prepared with their numbers and results, as well as the steps they took to improve their numbers.
Take a close look at their metrics to get a better understanding of where they can improve their sales process. The following will help you coach to their individual needs, based on the leading indicators:
- Number of inbound leads: Make sure you aren’t setting your team up for failure right out of the gate by not providing them with enough leads to hit their sales targets. There are two levers you can pull to fix the problem: 1) increase your marketing efforts to get more leads; and 2) coach your leasing agents to increase the number of leads they convert into tours. Even if their tour-to-lease ratios don’t improve, converting more leads into tours will increase their number of leases.
- Lead-to-tour conversion: Identify how quickly they respond to a lead, how many times they follow up before deciding to kill a lead, how frequent do they follow up on non-responsive leads, and what the messaging is for these follow ups.
- Total number of tours booked: If tours are high but closing rates are low, shadow a tour with your agent, hear their pitch and value proposition, and suggest improvements to help close a lease. Work through it together and provide constructive feedback.
It’s an easy trap to pay attention to the lagging indicators, but a good sales manager knows that it’s all about the leading indicators.
Instead of waiting until things aren’t going well, start thinking about your leasing team as a world-class sales organization and track the leading indicators for each individual agent. Manage to the metrics and the rest will follow.
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