One of the things that continues to frustrate me about our industry is the general lack of measurement and adherence to analytical decision-making. Don’t get me wrong, we’re much better now than when I first entered the industry in 1999. But we’re still woefully behind many other industries—and even when we do measure things, it’s often not the right things.

To align with this blog’s focus on leasing/sales, I’ll cover 1 metric we should STOP measuring and suggest a few worth focusing on.

STOP measuring closing ratio! What? Isn’t that the classic measure for all salespeople? In industries with essentially unlimited supply, of course it is. But in capacity-constrained industries like multi-family housing rentals, it’s an incredibly dangerous metric. That’s because the metric itself implies that a higher number is good, and a lower number is bad. If a community has high exposure, that’s true; but if it has low exposure, then it’s not true—show me a high closing ratio at a low exposure community, and I’ll show you units that are priced too low.

Accurately measuring closing ration is practically a herculean task. We are forced to get everyone to understand that whether this metric should be high or low is situational, and what typically happens is that leasing associates learn how to “manage” the metric by selectively entering and not entering guest cards. This hurts our ability to understand demand and to judge the success of our marketing efforts. Plus it encourages a culture of “cheating” on data entry. That’s just lose-lose-lose, so let’s stop doing this.

DO measure raw lease counts and hold associates accountable. It’s what we pay leasing associates to do, and it’s almost impossible to game. The trick, of course, is that our expectations for sales volume depend on exposure, seasonality and other factors but that’s not hard to calculate. At the end of each month, we can analyze our exposure, the number of leasing associates at the property, our expected lead counts (plus what’s already in our pipeline), etc. and set goals for each leasing associate. Now we’re in alignment!

Here’s a new metric for you to consider. How about measuring the amount of time it takes each new leasing associate to get to “full productivity?” It’s would be easy to calculate. The first step is to calculate the average number of leases all your experienced leasing agents ll in one month. Next, measure how long it takes a new associate to achieve that same number—you could look at time over the first month or maybe time to average over 2 or 3 months. If you want to get more sophisticated, you could also look at these numbers on a seasonally-adjusted basis as well.

A third measure involves a “visit to call” or “tour to call” ratio. While it has the same weakness that closing ratios have—it can be gamed by burying initial leads—tours are not as affected by exposure as leases are. So low exposure doesn’t necessarily mean fewer tours per guest card even if it means fewer leases per guest card. This measure also has the advantage of helping to isolate where leasing associates are doing well or doing poorly. Do they succeed or struggle converting leads to tours, or is it in the tour to lease phase of the sales pipeline? This measure helps isolate that.

It’s very difficult to control what you don’t measure—and you often get exactly the behaviors that your measurements incent. So it’s time we put some effort into systematically measuring our sales success. And let’s make sure we’re measuring and rewarding the metrics that matter the most!