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Sophie: The topic of KPIs is an incredibly broad topic that I’ve been trying to bring back and bring into context. And from a real estate perspective, without wanting it to sound a bit too twee, effectively what we have to do is work from the vision that you have for your organisation, work it back into the goals that you’ve broken it down to already. And then the KPIs have to sit below the goals.
So effectively, if you think of the vision as a house, the goals are the structure, and the KPIs are the bricks. So the KPIs are what brings it all together and actually makes it supportable and makes it continue on for the long term.
This is my favourite book at the moment, “Start With Why,” by Simon Sinek. Effectively, what he talks about is ‘circles of understanding’. So, within any organisation you have three circles. Effectively, everyone understands what you do in your organisation. The majority of people understand how you do it in your organisation. But the real key to a successful organisation, and also being able to get the full engagement of your team and also your clients–and I’ll segue into that later–is understanding why you do what you do. If people don’t really understand why they do their job, and they don’t understand why they have to do those particular KPIs, the danger is that those KPIs will never actually get done properly, and they’ll never be embraced by the team, because they just don’t get why you want them to do those things.
If I can break it right back to one particular situation: everyone would have their property managers who do routine inspections, yes? From there, a routine inspection is done for what purpose? Aside from the legislative purpose, what do we actually do routine inspections for?
So one of the values is definitely comfort, isn’t it? It’s comfort, it’s peace of mind, it’s knowing that someone is across their investment, and they haven’t gotta do it themselves day in, day out.
What other values do you think that you can put to a routine inspection, that a client would get from a routine inspection? Rent review? Which is giving them an increase in their income. So, the value of that to them is that they’re getting more value out of their property. But not only that, but if we told them what the property is worth in the routine inspections–I’m not sure whether everybody’s giving them that level of information in the routine–but if you were, or even if they just know that the property is being well maintained, they’re comfortable that they know that their investment is growing. And so they’re holding onto an asset that is appreciating. And in their mind, that relates back to a whole lot of different things. So, it might be that this investment is for a particular purpose. It might be for setting their kids up later on. So, there’s a whole lot of underlying reasons why people actually have investments.
It might also mean that it’s a well-maintained property, so it gives them options. So they know that the increase of value in the property means that they can perhaps borrow more, so they can leverage off that investment and buy more investments. So there’s a whole lot of things that actually sit behind the actual routine inspection, and the reasons why we do them, and the value to the client. But if you asked your property managers, they would probably stop at the point of, “Well I have to do them because it’s part of my job. I have to do them because it’s in legislation.”
So, if we can break down those KPIs into being actually able to demonstrate to the property manager what the value is to the client–so what the “why” is–suddenly it brings them into more of an engaged environment, because they start thinking about what it is that they can deliver to the client. Or in an ideal team environment, they would start thinking about what they can deliver to the client.
So, therefore that beds in the client, because they start appreciating that you understand where they’re coming from. It’s not just about them giving you the management of their property, it’s you understanding why they have that property in the first place.
So, with stepping back the KPIs, and the vision and the goals into the KPIs, is effectively reverse engineering your vision. You are looking at what your vision is, what your goals are. Then the KPIs are basically what make the goals happen, and then the goals make the vision happen.
In your own head, think about one of your core goals. So, therefore, some of the KPIs that you would give your team, to be able to reach that goal of gaining more managements… if you have to sit down and say to your team, “This is the way that we want to get to more managements,” what would we put that into for KPIs?
Phil: Number of contacts on the database.
Sophie: Yep, number of contacts on the database. And what would we do with those contacts?
Phil: Perhaps there their system contacts, so… touch points. So, contact goes on, seven days later you get another touch point, a month later, get another touch point, a month later, they get another touch point.
Sophie: Converting a client can be a really long process. It’s like seven times you’ve got to touch a client on average before they’ll actually convert. But being able to give them value before they’re even a client, you’re right: give them information. And give them specific information, perhaps around the area where their property is located, around activity that you’ve recently had in the market.
Your client portal, that’s an ideal thing to be communicating to the client, because you want to almost be giving them stuff that they look at and go, “I don’t get that from my current agent. I don’t get that from my current agent.” And as you said, Phil, they’re hearing from you more frequently than they’re hearing from their existing agent that they’re actually paying money to, but they’re not paying you anything and yet they’re getting all of this quality information sitting behind it.
So being able to break it down to what the client actually wants is part of the broader business goals that can actually–so you have your business [goals], your financial goals, you have customer goals, and then you can also have employee goals, which are all kind of intersecting. But at the end of the day you need to understand the “why” behind all of them. And understanding the “why” behind the client and giving them the value, then that’s going to resonate with them and it’s going to want to make them interact with you longer term.
It also helps with team engagement as well, by giving them the understanding of what it is that they should be doing on a day-to-day basis, but why they’re doing it on a day-to-day basis.
And one of the really cool things that I heard–I don’t know if everyone is on McKinsey Insights, but highly recommend those. It’s an American organisation, but they do a lot of podcasts, a lot of emails and online. There’s a lot of research that sits behind the data that they have. The recent one that they had, which they’re actually talking about designing an organisation, and they talked about having singular moments of delight. Which I thought sounded like the coolest thing of all time. Because if you could get something like that into your organisation, if you could get your team thinking about how to make transactions a delightful process for the client, and have them recognise that as being something that was enjoyable, that they got value out of, and that made them want to interact with you again… even just by the phrase, you can appreciate how valuable that would be, and how impactful that would be for an individual.
When someone brings out for an appraisal, you know, you are having a chat with them as you always do and you are getting information from them and then at the end of it saying, “Hey, we are just doing a bit of a survey around the office, how do you take a coffee? And you know, “Why would you ask me that?” “Just, you know, we are just having just random kind of a survey that we are doing.” “Strong skinny flat white, no sugar,” “All right, okay.”
Then you turn up at the door to do the appraisal. They open the door and it’s, “Hi Samantha, here is your coffee.” So, it’s that costs what? You know, I’m from Melbourne, you know, coffee is expensive down there. I’m going to say about 4 bucks, but it’s $4 to create a really lasting impression with somebody and if you are not sort of the person who has a coffee maker at home and you are staying home to meet the new business consultant because you want to lease your property out, you haven’t had your coffee yet and some little angel comes to the door and says, “Hi, here you go. Here is a coffee.” It could be a complete norm thing for someone but it could really kind of tip the scales in your favour and then the next agent turns up and they are kind of like, “Well all right, what have you bought me? You bought me nothing.”
I’ve got myself all excited now, so I’ve gone off on a tangent. But in order to provide that level of delight to your customers, you need work back and figure out why they’re customers and why they choose to do business with you, why they stay and why they’d move. And one of the most essential ways to do that, obviously, is just to ask them. And to be able to see whether the involvement and the engagement and communication levels from your team, whether they’re actually paying off, comes down to the measurement of your KPIs as well. So there’s obviously different ways for you to measure KPIs, and one of them can be around client engagement.
Is anyone using Net Promoter Scores, at the moment? So, on a scale of 1 to 10, if you ask your clients how likely they are to refer you to somebody else, then they become your promoters, effectively. So, if they are an 8 or a 9 out of 10, then they are completely engaged with your business, and they’re the people who are out there talking about you in the market. If they’re a 1 or a 2 or a 3, then they’re one foot out the door. One more thing and they’re out, and they are effectively out there telling people that you are average, or below average, or a complete waste of time. Everyone in the middle is ambivalent, and so they really don’t count those people. You dismiss those numbers in the middle. So 4, 5, 6, and 7, you don’t worry about. They’re the people who are kind of ‘swing voters’, essentially. So, the Net Promoter Score, how many 8s, 9s, or 10s you get, actually adds up to a total number. So, the higher your number, the higher the value of your service to the clients that you have.
So, it’s quite an easy thing to do internally. It’s what you do with that data at the end of the day that can convert clients from the bottom rung into the middle and eventually up to the top. Now there are organisations that can do this for you, and then they can give you a bit of the background of the data, and the underpinning of the data. Even better if you can say to them, “Why did you give us this score?” give them the option to actually write something in. Because if people really don’t like you, they’ll tell you why they don’t like you and what you’re doing wrong. And if people ‘off-the-chart’ love you, they will more than likely come back and tell you why they ‘off-the-chart’ love you.
In some cases, it’ll be related to an individual. So, they might say, “Sally is the greatest property manager I’ve ever had.” But you want to drill into why Sally’s the greatest property manager that they’ve ever had. Because if you can find out what Sally’s doing and multiply that across your organisation, then you’re going to have a whole team of Sallys, not just one. So therefore, that’s going to push your Net Promoter Score up as well.