Conversion rates are the secret sauce that you discover when you are recording your numbers. Why? Over time, your conversion rates will help you determine how you are doing moving your business from stage-to-stage, identify areas for improvement, and give you needed insight for better planning in future weeks and quarters.
Included in the planner are some of the most commonly-used conversion rates by loan officers and real estate agents as well as ones that provide users with a better understanding of their business in order to make needed adjustments. Some users focus on only one or two conversion rates for simplicity. Other users really dig into the analytics of their numbers and dive deep into multiple conversion rates. I suggest using the conversion rates that resonate with you until you feel like you need more information or your results aren’t what you expected. The value in recording your activities and results is that you can use those numbers at any time for conversion rates that you may not have thought important at the beginning.
Conversion Rates You May Find Helpful:
Loan Officer Example – Lead Calls To App: This conversion rate measures the number of lead calls required to get to one application. This can help you quantify your Weekly Goal for lead calls. This conversion rate can be reflection of either the effectiveness of your lead follow-up process or your lead scripts.
Real Estate Agent Example – Buyer Leads To Buyer Closed: This conversion rate is the percent of your buyer leads that result in a closed buyer transaction. Many agents simply focus on this number, but it doesn’t really give much insight into how you are doing on the stages between a buyer lead and a closed buyer transaction. Analyzed in connection with other measures, it could reveal that you need a bigger lead funnel for buyers or improvement in your daily disciplines or target day commitments.
Now what to do with your conversion rates?
By looking at your conversion rates, you can see how you did with the opportunities you had. Today, you might only have 1 month of data, but you may still be able to identify some areas of your business or plan that need improvement. For example, if your weakness is your conversion of seller leads to listing presentations or leads to applications, then maybe you need to work on your initial call script and see if you can improve that number for the next month. Sometimes it takes digging and some trial and error to discover what is needed to improve your conversion rates, but initially you need to identify where your weaknesses lie. Calculating your conversion rates is the first step. It doesn’t always need to be a huge jump, one percent improvement over last month is a WIN!
What Is A Good Conversion Rate?
We are asked this question more often than almost anything else. Our answer is always: a good conversion rate is 1% better than YOUR conversion rate from last month or last quarter. What really matters is focusing on YOUR continuous improvement.
Is It Useful To Compare My Conversion Rates To Someone Else’s?
Our answer is: Maybe? If you’re working similar relationships, then it could make sense to compare. For example, if you and your accountability partner are both working online leads, then you could have comparable conversion rates. But if you are working your sphere of influence for leads, and your accountability partner is working online leads, then comparing conversion rates is probably not helpful.
How Can Conversion Rates Help Me Improve My Business?
The most commonly-used conversion rates compare Results to Results (e.g. leads to apps or closed). To really get more precise in analyzing your business, you need to also measure Activities to Activities (e.g. calls to meetings) and Activities to Results (e.g. calls to leads). Most of these measures are more impactful after a year of recording. Here are a couple of examples of how WBN users utilize conversion rates to help them plan their Weekly Activity Commitments to reach their desired results.
Loan Officer Example
Total Calls to Closed:
One user measures how many Total Calls (this includes calls to leads, clients, referral partners and partner prospects) he needs to make to get one Closed loan. After recording, he knows that he made a total of 7,800 calls (average of 150 calls/week) last year and closed 120 loans. That makes his historic conversion rate for Total Calls to Closed 1.5%.
He then takes the number of loans that he wants to close this year and uses his historic conversion rate to determine how many total calls he needs to make this year to meet his closed goal. In other words, if he wants to close 160 loans this year, he needs to increase his total calls to an average of 205 calls per week. It doesn’t really matter what the calls were about, what the distribution was between call types, he just knows that he needs to pick up the phone and call 205 times a week to reach the results that he wants. I know that I have said this before, but this is the power of recording both your activities and your results!
Real Estate Agent Example
Seller Lead Calls to Listing Presentation:
Another user focuses on what activities drive the other activities in her business. For example, after recording her seller lead calls and listing presentations last year, she can calculate how many seller lead calls it took to get one listing presentation, and then use this conversion rate to determine how many more calls she needs to make to hit her listing presentation commitment for this year. This power user dissects her entire process for her seller business by looking at her conversion rates for Lead Calls to Listing Appointments, Listing Appointments to Listings, and Listings to Seller Closed transactions. She now has a very clear understanding of where she needs to make improvements in her planning, execution and processes to hit her big goals for the year.