5 Things To Consider When Tracking CRE Agents Pipeline & Opportunities

5 Things To Consider When Tracking CRE Agents Pipeline & Opportunities

Daniel Levison | January 29, 2020

Effectively Running a Commercial Real Estate Brokerage Requires a Deep Understanding of Your Firm’s Cash Flow and Future Revenue

If you’re a principle at a commercial real estate brokerage company trying to get agents to project their future earnings is like trying to pull teeth without novocaine – it’s painful! Following up our recent blog, Do You Really Know Your Pipeline Opportunities Over The Next 12-18 Months?, we wanted to dive into some best practices when it comes to helping your brokerage team manage deals and your opportunity pipeline for better forecasting, increased productivity and profitability.

Convincing agents of the importance, both for themselves and the company,  to understand and manage their future opportunities and pipeline is not an easy task.  It’s critically important for agents, who are typically independent contractors technically running their own small business, and even more valuable for managing brokers and principals to understand their businesses future potential revenues. 

A Few Thoughts:

For managing brokers, without a real understanding of potential revenue, it is virtually impossible to budget for services and support for their agents and business. Given today’s plethora of new CRE technologies available to brokerage companies, an understanding of future revenue is more vital than ever. 

Coming up in the real estate industry 40 years ago we were taught “never figure out your commission or you’ll jinx the deal.” Although times are changing, salespeople are by nature superstitious. As a principal in a brokerage company, trying to determine what overhead and tools we can provide our agents and support staff has to be backed up by an intelligent estimate of our company’s projected revenue.

The ongoing drill of trying to coerce agents into projecting their future revenue is compounded by an individual agent’s perception of the probability their deals will close. Experienced agents are, at times, too cautious, and less experienced agents are always too positive with their probabilities.

So, to get an true and clear assessment of your business’ potential revenue what does a CRE opportunities tracking system need to include to give managing brokers and principals what they need to create accurate budgets while providing a process that will be easily be adopted by their agents?

(5) Key Concepts to Consider When Evaluating a Process or Platform for Tracking an Agent’s Pipeline and Opportunities:

  • The process should remove the fear agents are having sharing to much of their clients information
  • The process should standardize the probability of opportunities to avoid agent’s bias being baked into their forecasting  
  • The process should bucket opportunities into  stages as defined by management 
  • The process should address agent’s concern that they are jinxing a deal if they track their future opportunities 
  • The process should be simple and quick to use, if it’s too cumbersome or asks for too much information agents will push back and prevent adoption.                         

Having been a CRE agent and managing broker broker for nearly four decades, tracking my future opportunities is something I had to force myself to be diligent about.  Experience has shown – the only way agents will adopt a process to track their future deals is if the process addresses the concerns above.

Several CRE centric CRM’s have created elaborate pipeline features and processes that provide agents and managing principals a wealth of information on future deals.

However, experience and discussions with other managing brokers confirm agents resist providing their companies complete information on their clients and future deals especially if the information is required to be input in a centralized company managed platform.

Several newer platforms, such as, CommissionTrac, focused on back office automation and processing have created simplified opportunity processes to help managing brokers and principles with tracking and managing future revenues and their agent’s opportunities and deal pipeline.  

CommissionTrac’s approach, has been to create a quick and simple process agents can adopt without compromising on their privacy concerns while still providing the mission critical data to leadership to track the company’s  future revenues.

Here’s Our Approach at CommissionTrac:

In the opportunities module within CommissionTrac, the management of the company starts with setting the stages that agents assign to each new opportunity they create. Each stage is given a win probability, and we suggest using either historical data or a consensus of key leadership’s gut feel. If you know once a deal has gotten to the “LOI” stage, it has a 1 in 4 chance of closing on average, using 25% as your “win probability” will give you insights when reviewing the weighted value of all your opportunities in the LOI stage. Giving agents just a few stages to choose from will avoid confusion and make for quick and easy adoption by agents.

Now it’s time for agents to start adding opportunities they are working on in the deal funnel. We wanted to make this as dead simple as possible. CommissionTrac is not a full blown CRM. There are no cross relationships between contacts, companies, buildings deals and more. We have excellent partners and integrations options with companies like Rethink CRM if you are craving infinite customizations and levels of data management. We created our opportunities module to be a replacement for every manager’s favorite spreadsheet they circulate every so often and beg agents to fill out.

We kept it dead simple. There are only 6 fields you need to fill out to submit a new opportunity:

  • Name: Give the deal a name
  • Stage: Agent selects from one of the deal stages provided by management
  • Deal Type: Sale, Lease, Fee (sub-types do exist for leases and fees to be more granular)
  • Estimated Inside Commission: how much is the deal worth in brokerage gross value
  • Estimated Close Date: When will this deal close by
  • Inside Agents: Who all is working on this deal, who are we representing and how is the deal gross being shared amongst the inside agents

That’s it! An opportunity can be created in less than 30 seconds. There are optional fields to add an address, notes and comments or any attachments related to the deal.

As opportunities get created, leadership and management can see all opportunities across the whole company. As an agent, you can see only opportunities you are on, even if someone else made the opportunity and added you. This view can be filtered by Name, Address, Type, Stage, Estimated Commission or Estimated Close Date for quick access to the deal(s) you’re looking for:

Of course, we give agents and leadership reports. We have a fully configured report that updates in real time. As a manager, this report allows you to aggregate opportunities based on type, stage or agent(s). If you just want to see one agent’s deals that are in the LOI stage, add the filter and get deep insights on what that agent is working on, how much value is in their pipeline and help them close close close. As an agent, you can drill into opportunities in your own funnel by stage or type, but you can’t see what deals others are working on. Privacy is key when it comes to agents and their deals.

Finally, when the deal is won. Click one button and you can easily convert the opportunity into a voucher. It will bring across all the information, address, agents, share of commission, notes and attachments into a voucher for you. 

Here’s a quick GIF showing everything from creating an opportunity all the way to converting it to a CommissionTrac Voucher:

To find out how you can use CommissionTrac to gain clarity and insight on your brokerage’s performance including future opportunity revenue, your company and agent’s receivables, commission split plans, invoicing, and commission distributions while also understanding why Techstars Atlanta and Cox Enterprises are lead investors in CommissionTrac, request a demo today by visiting our website at www.commissiontrac.com

Author: Daniel Levison – Chairman CRE Holdings (Atlanta Investment Properties, CommissionTrac, SharedSpace) and Turner Levison, CEO, CommissionTrac

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