As business owners, brokers will naturally want to know whether their real estate technology investments are paying off. They can do this by calculating their return on investment( ROI), or net profit from an investment divided by cost. For example, if you spent $1,000 on new software that earned you $2,000, your ROI would be 100%.
But this metric can be limiting. That’s because traditional ROI doesn’t account for other industry-specific factors that can have a big impact on your brokerage. Read on to learn about three unconventional ways you can measure the ROI of your tech stack that go beyond profits.
Adoption Rate
Only 27% of agents strongly agreed that their brokerage provided all the technology they need to be successful, according to the 2021 Technology Survey conducted by NAR. This means broker/owners have a major opportunity to meet agents’ technology needs more effectively. The most valuable technologies included e-signature, property search, social media marketing, and customer relationship management tools, according to the agents surveyed.
Many factors affect the rate of tech adoption among real estate agents. One of those was the COVID-19 pandemic, which pushed many late adopters to more fully embrace technology. Other factors include the perceived and actual usefulness of the technology, ease of use, perceived or actual benefit, and the behavior of other agents.
Market Share
The US’s ten largest brokerages accounted for about 20% of nationwide market share by sales volume in 2020, according to T3 Sixty’s Real Estate Almanac 2022. This means there’s a lot of room for brokerages of every size, from international giants to niche boutique offices, at the regional and local level.
Market share is a great way to understand how you’re faring against your competition and measure your growth over time. If new tech allows your team to gain market share faster, you know it’s working, even if ROI doesn’t increase as quickly.
Customer Satisfaction
The potential cost of dissatisfied customers in real estate is astronomical. Agents will agree that reputation, word of mouth, and referrals are the biggest source of new leads. If past clients aren’t singing your praises, there’s a problem.
In 2022, home buyers and sellers expect brokerages to use technology to make it easier to buy and sell homes. That means e-signatures for signing important documents on the go, robust social media marketing campaigns, and tailored customer service with a personalized touch. The solutions you add to your tech stack need to meet these expectations. If your customer service ratings increase after adding new tech, it will have a positive effect on your bottom line.
There’s More to ROI Than Just Revenue
Technology is revolutionizing real estate, and industry actors around the world agree that new technology adoption is a strategic priority.
Real estate tech is an investment that can pay off for your brokerage over time. By measuring your return in terms of agent adoption, market share, and customer satisfaction, you can assess the impact of your tech stack beyond just dollars and cents. These metrics help make sure you’re getting the most out of your investment.
For more tech insights from real estate industry leaders at Constellation1, Vylla Home, and Howard Hanna, you can watch the recap of our recent Inman Connect Now event here.
