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Target the Right Stats To Boost Results

By Christopher M. Leporini, REALTOR® Magazine

Moneyball: The Art of Winning an Unfair Game By Michael Lewis 288 pp., $24.95
Buy this book from Amazon.com.

How did a team with the one of the lowest payrolls in Major League Baseball become one of the sport’s winningest teams? Moneyball offers an inside look at how the Oakland Athletics’ general manager Billy Beane disproved the widespread theory that money is the primary driver of success in baseball. The book offers a key lesson for building a successful business: think outside of the box in order to identify and track the right numbers that lead to success.

Using extensive statistical research, Beane incorporated a scientific approach for managing his team’s finances and guiding its hiring strategies. Beane created a system of evaluating statistical data that more accurately reflected a player’s ability to contribute to a team’s winnings rather than the traditional, subjective scouting methods. Beane determined that two stats—on-base percentage and slugging percentage—were most directly linked to baseball success. Having identified the right numbers that lead to success, Beane was able to strategically and efficiently manage his team’s recruiting practices.

The same lesson is applicable to real estate brokers and agents: Identify your key stats that lead to success, and plan your spending accordingly. Don’t try to match your competitors dollar-for-dollar. Instead, reevaluate your financial strategies. Is your money being spent on expenses that bring the highest return? Is your spending geared towards short-term or long-term planning? As a real estate professional, you have many different numbers to use to measure your success: total number of listings, the amount of commissions, or overhead costs. But it’s important to zero in on which numbers equate to higher profits. The most effective salespeople might not be those showing the highest-priced properties, but their coworkers who maintain a steady stream of lower-priced listings. Once you know which measurements correlate most closely to greater profits, you can better focus your business efforts.

Many of the lessons played out on the baseball diamond can apply to any business—even if you don’t know an RBI from rib-eye.

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This post was contributed exclusively for REALTOR® Magazine.

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