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I No Longer Give a #&%! About Your Closing Ratio

I No Longer Give a #&%! About Your Closing Ratio

That's right, it deserved an explative.  Why in this industry do we get caught up on this number?  My question is how many leases did you get today (or this week)?  I don't care how many times you picked up the phone or how many people you showed an apartment to get that/those lease(s) as long as you get them.

Why, Mark, why?  Because you're all full of #&%! when you tell me how many calls or traffic you had anyway as you're afraid to have a low closing ratio.  We've been holding you to some magical closing ratio number, and it's time to stop.  I love interviewing new leasing candidates or managers and they tell me that they have a 50% closing ratio or higher.  I call BS!  How is that exactly measured anyway?  Is it based on people you actually showed an apartment to?  Is it based on everyone that inquired?  Does it include people that are interested in a one bedroom that you have no availability for? 

 And given all that criteria, what really matters?  I think two things matter.

1. Getting the leases to achieve the goals set for yourself and management.

2. Recording every single call, visit, or inquiry of any kind that comes in.

I believe these are the key measurements needed for leasing and marketing a community.  And that's why I no longer give a #&%! about your closing ratio.

 Enjoy your day!

Mj

 
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Mark,

I can FEEL the passion in your words! I, too, think that results are what matter; not arbitrary ratios that have no evidence to back them up.

-Charity

  Charity Zierten
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That was one of the best rants I've read in a while! And I completely agree. When I worked on-site, I would hear absolutely crazy closing numbers from others at different communities and realized there was no possible way they were reaching that without playing with the numbers.

  Brent Williams
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Thanks Charity and Brent. 2009 is going to be a passionate year for me. Bring it!

  Mark Juleen
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Mark,
Agree, completely, BUT, it isn't their fault. It is every property management executive that demand all those silly reports that take at least a half of a leasing day a week away to complete.

  Eric Brown
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I am normally so agreeable - but this is so WRONG!!! My turn to rant!!!!!! We look at those numbers to be sure that each and every lead is treated with respect and follow through. Too many leads are slipping through without being taken care of and in training we are working hard to get leasing teams to give each and EVERY lead their attention. Without a % we have no way of helping a leasing team realize the LOST LEADS and the value of paying attention. We can show them how focusing on each lead and working it increases that % and gives them a better chance at increasing occupancy. Closing % is about being responsible for each piece of traffic and not complaining about having NO traffic when you ignored the leads you already got! I teach leasing procedures that increase their success from 12 - 32% and I can show them verifiable results by looking at the closing % before and after. HELP - this industry is already bad at lead management - if you get rid of tracking the % you take away the responsibility a leasing team has to manage each lead.

  Toni Blake
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I love rants

In reality, you both are right. Closing ratio is VERY important as a reality of the job, but when the process is so rife with manipulation, then it loses all value as a measurement tool. I've found instances where leasing consultants did a worse job at prospect follow up because they were so intent on pretending that prospect never existed (and therefore, wouldn't affect their closing ratio). And then you have the backlash from good employees who aren't fudging the numbers but end up looking the worse for it.

So yes, the ability to track the leasing consultant's effectiveness at their job is key, but only if it is a reliable measurement, in my humble opinion, of course!

  Brent Williams
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Toni-

First, thank you for contributing. This is what MFI should be all about. Great discussions about different ideas and concepts for our business. That being said, to a degree I can see your view point. As a trainer closing ratios are a great measurement for you to use to show the improvements made due to training. If a company invests in training closing rates should go up, but on that same note what really is important is the quantity of leases going up.

For me as a manager, I view it as "what is most important to my bottomline." A higher closing ratio doesn't necessarily make us more money, nor does it help to effectively track traffic and make the best marketing decisions for spending.

It's more important for us to know where every single lead comes from whether they are qualified, they actually see an apartment, or if we even have the availability. In most cases (and with most management companies) prospects in these categories are not included in traffic numbers or recorded into the databases. The reason most don't record these is that they are not considered a true lead (whatever that means). I'd love to know who determined that back in the day. It must have been someone that wanted to improve their closing ratio.

All the training and policies in the world could force our leasing associates to record all their traffic, but if we hold their efforts up against some mythical closing ratio benchmark it just creates an unnecessary level of frustration.

Giving a goal of 1 lease a week (per associate) at most properties is a benchmark that is much easier to measure. If an individual is not achieving their goal of one lease a week we know they need to work on their follow-up, leasing process, etc. Why throw the other measurement in there? Managing each lead is not as important as actually achieving the goal of getting the lease. Using this benchmark we can still identify individuals or properties that are struggling, and by throwing out...

Toni-

First, thank you for contributing. This is what MFI should be all about. Great discussions about different ideas and concepts for our business. That being said, to a degree I can see your view point. As a trainer closing ratios are a great measurement for you to use to show the improvements made due to training. If a company invests in training closing rates should go up, but on that same note what really is important is the quantity of leases going up.

For me as a manager, I view it as "what is most important to my bottomline." A higher closing ratio doesn't necessarily make us more money, nor does it help to effectively track traffic and make the best marketing decisions for spending.

It's more important for us to know where every single lead comes from whether they are qualified, they actually see an apartment, or if we even have the availability. In most cases (and with most management companies) prospects in these categories are not included in traffic numbers or recorded into the databases. The reason most don't record these is that they are not considered a true lead (whatever that means). I'd love to know who determined that back in the day. It must have been someone that wanted to improve their closing ratio.

All the training and policies in the world could force our leasing associates to record all their traffic, but if we hold their efforts up against some mythical closing ratio benchmark it just creates an unnecessary level of frustration.

Giving a goal of 1 lease a week (per associate) at most properties is a benchmark that is much easier to measure. If an individual is not achieving their goal of one lease a week we know they need to work on their follow-up, leasing process, etc. Why throw the other measurement in there? Managing each lead is not as important as actually achieving the goal of getting the lease. Using this benchmark we can still identify individuals or properties that are struggling, and by throwing out the closing ratio we can insure we record all our incoming traffic.

Just my thought process. Again, I appreciate your contribution to the post and look forward to more conversation! Until the next time, enjoy your day!

Mj

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  Mark Juleen
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I would like to add that I have been in property management for over 26 years, never have I heard the term a "true" lead? When I was on-site I learned, and as a Regional Supervisor for over 13 years, I teach, a Lead is a Lead. Period. Any time the phone rings, Any Time a client walks in (qualified or not), Any Time you receive an email inquiry, that is a Lead. There has to be a way to make leasing personnel accountable. Hopefully, we, as an industry, have finally realized we need a sales mentality at the front line, not order takers. If we are hiring the right people, in my experience, the closing ratios might be off a little, but they do paint a true picture. The winners and best sales people always have higher closing ratios and higher retention ratios, thus getting the property's bottom line headed in the direction it needs to be. I truly believe it is all about the people you have in place. The right people produce the right numbers Every time! After all, in most of our markets, which are very competitive and are surrounded by the same product, the same amenities, etc., the client is ultimately buying the agent and not the community.

  Tracy Orn
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Tracy-

Thanks so much for the comment! I agree with you 100%, a Lead is a Lead! While I have not been in the industry 26 years, it is apparent that our industry holds on to many old methods and ways of conducting business. The "order taking" mentality, as you called it, still lingers. It's evident in the way we compensate our leasing associates as well. How many companies are straight commission, or at least 50%+ commission. I don't know of any myself. You are so right that it is the right people that make the difference. When you have the right people closing ratios don't matter. Great comment and thanks for contributing!

Mj

  Mark Juleen
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You are right on. To may people want to play a numbers game about leasing percentage. I would rather lease to residents we really want at our communities. You need the right staff to create a community, not to lease to everyone who walks in the door.

  Jerry Winograd
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