English
Overview: Management vs. Sales Dynamics
The goal of any real estate organization is sales and revenue increase. This unites all departments and employees. Each department is a link in the value chain, starting with lead generation and ending with sales and after-sales service. Management improves the efficiency of this chain. Managers must understand how their decisions affect sales, for example, investing in a CRM to improve lead management.
Management provides resources to the sales team, including tools, training, and administrative support. Management improves internal processes to reduce obstacles for the sales team, such as simplifying the mortgage approval process. Management sets sales goals and KPIs. Management develops sales strategies and identifies target markets, requiring data analysis.
Scientific Management Theory (Frederick Taylor) focuses on improving❓ work efficiency❓❓ by analyzing tasks and streamlining processes. Management by Objectives (Peter Drucker) emphasizes clear, measurable goals for each employee to direct efforts toward sales goals. Total Quality Management (TQM) emphasizes involving all employees in improving product and service quality to increase customer satisfaction and repeat sales. Systems Theory views the organization as an integrated system where any change affects other parts; therefore, any administrative decision must consider its impact on all aspects of the sales process❓.
A real estate company implemented a new CRM system, resulting in a 20% increase in completed deals. A sales manager provides regular training to their team on negotiation and persuasion skills, increasing the average deal value. A real estate company divided the sales team into specialized teams based on property types (residential, commercial, land), increasing efficiency and specialized expertise. Incentive programs are designed to be directly linked to sales performance with financial (commissions, bonuses) or non-financial (recognition, promotions) incentives.
Conversion Rate (CR): CR = (Number of Actual Customers / Number of Potential Customers) * 100
Average Deal Size (ADS): ADS = (Total Sales Value / Number of Completed Deals)
Total Revenue (TR): TR = Number of Completed Deals * Average Deal Size
Return on Marketing Investment (ROMI): ROMI = ((Total Revenue Generated from Marketing - Marketing Cost) / Marketing Cost) * 100
Effective management in real estate requires understanding the sales process and how to support and improve it. Managers should strive to provide the necessary tools, resources, and training. Through the application of relevant scientific theories, data analysis, and experimentation, management can increase sales and revenues. A holistic vision, focus on common goals, and collaboration are key to success.
Chapter Summary
- The core idea is that management❓ and sales share the same goal: increasing productivity and profits.
- High-performing real estate teams and successful real estate offices share structural and functional similarities, including specialized teams for buyers and sellers, administrative support, and a leader coordinating operations.
- Learning from successful real estate models is important, allowing managers and agents to study and apply proven strategies.
- Documenting systems and processes is crucial for replicating success, scaling operations, and transforming a successful agent into a “billion-dollar producer” through team building and delegation.
- Managers are essentially “scaled-up” real estate agents who have developed their businesses by building effective teams and implementing organized systems.
- Continuous learning from experts is necessary for managers and agents to develop their skills and strategies.
- Organized systems and documented processes are fundamental for sustainable growth in real estate, enabling success replication and efficient❓ delegation.
- Managers should view themselves as sales team❓ leaders, understanding❓ sales challenges and providing support.
- Real estate companies should encourage continuous learning and experience sharing through workshops, training, and industry events.
- Companies should invest in developing effective and documented systems, including technology, clear❓ models, and employee training.
- Managers should focus on building strong and integrated sales teams by identifying individual strengths and weaknesses, providing training, and assigning tasks accordingly.
- Managers and agents should embrace modeling, studying successful approaches to develop their own methods by researching experts and adapting their strategies.
- Success in real estate depends on understanding the relationship between management and sales, leveraging the experience of others, developing systems and processes, and building strong teams.
