Productivity Per Agent Comparison

by | Aug 31, 2023 | Uncategorized

Today, we’ll be addressing an important question: How does the productivity of my agents compare to the general market and my direct competitors? 

Answering this question will give you insights into where your strengths and weaknesses lie within the marketplace and help you generate ideas on where to improve your brokerage. 

Let’s dive right in. 

Foundation 

First, we’re going to start by introducing a basic business principle: If you don’t measure it, you can’t manage it. 

Here is a suggested way to measure productivity per agent: 

  1. Take the total number of closings your brokerage has had in the last 12 months. 
  2. Divide the total number of closings by either:
    1. Total number of agents, or 
    2. Total number of active agents (Active agents being agents who did at least 1 transaction in the last 6 months.)

To illustrate these steps, allow us to introduce brokerage ABC Realty. 

ABC Realty has had 500 closings in the last 12 months. They also have a total agent count of 100 agents.

Calculation

  • 500 closings / 100 total agents = 5 closings per agent. 

Therefore, ABC Realty’s productivity over the last 12 months has been 5 closings per agent. 

General Market 

The second important business principle we’re going to introduce is: Compared to what? 

Because you now know your productivity per agent, you can now compare yourself to your general market by answering the following questions:

  1. What’s the total number of transactions that occurred in your market? 
  2. How many agents are in your market? 

Keep in mind that the agent count used in calculating productivity per agent needs to be consistent in all calculations. If you used the total number of agents, then use the total number of agents in your market.  

Once you answer those questions, use the same process you used for finding your productivity per agent. 

Let’s revisit ABC Realty. 

ABC Realty’s market saw 100,000 closings in the last 12 months. Their market also has a total agent count of 25,000 agents. 

Calculation

  • 100,000 closings / 25,000 total agents = 4 closings per agent. 

In other words, ABC Realty’s general market has had an average productivity in the last 12 months has been 4 closings per agent.

Direct Competitors 

To begin comparing yourself to your direct competitors, you first need to estimate their productivity per agent. 

To illustrate this process, we’ll use ABC Realty’s direct competitor, XYZ Realty. 

XYZ Realty has had 500 closings in the last 12 months with 100 total agents. 

Calculation

  • 500 closings / 100 total agents = 5 closings per agent. 

(Again, remember to keep in mind that the agent count needs to be consistent. Note how ‘total agents’ were used in every calculation so far.) 

Okay, so both ABC Realty and XYZ Realty have an average of 5 closings per agent. 

ABC Realty now knows that they’re in line with their direct competitor. 

But not so fast! 

This comparison only scratches the surface.  

Let’s dig a little deeper. 

ABC Realty looks at its agent roster and XYZ Realty’s agent roster to find the top producers.  

They’re looking to see where there’s a natural drop-off in productivity per agent. 

For example, at ABC Realty they have a team of 10 top-performing agents that all individually produce an average of 18 closings. The remainder of their agents produce an average of 3.6 closings. 

At XYZ Realty they have 3 top performing agents that individually produce an average of 25 closings. The rest of their agents produce an average of 4.4 closings. 

So, what does this reveal? 

The deeper dive reveals that ABC Realty’s direct competitors nearly produce one additional transaction per agent! 

And that’s not all.  

ABC Realty’s productivity per agent is lower than their general market! 

(On the flip side, XYZ Realty has a serious concentration risk at the top of its agent roster! If they lose their top two agents, they lose 50 closings.) 

All in all, even though the brokerages look the same at first glance, a deeper dive into the numbers reveals a different story. 

Summary 

To sum it all up, we covered 3 things today: 

  1. Figured out how to measure productivity per agent. 
  2. Compared that number to the general marketplace. 
  3. We then compared that number to your direct competitors. 

Oh, and we can’t forget the two business principles: 

  1. If you don’t measure it, you can’t manage it. 
  2. Compared to what? 

If your productivity per agent is higher or lower than the marketplace and/or direct competitors, ask yourself why.  

  • If you’re higher, what can you do to improve that ratio further? What can you double down on? 
  • If you’re lower, what systems, tools, and services, etc. can you improve or add on? Identifying the reasons why helps pinpoint potential weak points in your business. 

This exercise reveals a wealth of insights that give you a good idea of what to focus on within your business. 

Now, go out and give it a try! 

P.S. – If you did the exercise reply to this comment down below and let us know! We’d love to hear your thoughts.

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