GCI is up, but owner earnings aren’t. If that sentence hits home, your problem isn’t effort—it’s instrumentation. Most brokerages track activity and celebrate volume while margin erosion hides in plain sight. Scaling without operational visibility creates fragility: expensive recruiting, soft productivity, and bloated overhead.
This brief codifies the nine real estate brokerage KPIs that actually move profit. No vanity metrics. You’ll get definitions, how to calculate, what good looks like, and how to operationalize them inside a weekly leadership cadence. Use these consistently and you will remove guesswork from hiring, spending, and capacity planning.
Acquisition Economics
1) Recruiting CAC (Customer Acquisition Cost)
Definition: Total recruiting spend divided by the number of productive agents hired (agents who post at least one closed side within 90 days).
Formula: (Salaries for recruiting/ISA + ads + events + referral bonuses + onboarding labor) / Productive agents hired.
Why it matters: If you can’t quantify what it costs to acquire a productive agent, you can’t price splits, forecast payback, or prioritize channels. Segment by source (referral, advertising, events) to expose waste.
Action: Instrument every line item tied to recruiting. Exclude unproductive hires from the denominator. Review CAC by channel monthly; drop the bottom quartile each quarter.
2) CAC Payback Months
Definition: The number of months for a new agent’s gross profit (company dollar) to repay their Recruiting CAC.
Formula: Recruiting CAC / Monthly gross profit from the agent (average company dollar).
What good looks like: Lead-fed teams can accept 9–12 months; cap/split-heavy brokerages should target sub-6 months. The more the firm funds lead/ISA/marketing, the longer the payback tolerance—but it must be explicit and monitored.
Action: Publish payback by channel and cohort (rookies, mid, top). Freeze spend on any source consistently over your threshold.
3) Marketing Efficiency Ratio (MER)
Definition: Gross Commission Income directly attributable to marketing divided by total marketing spend in the same period.
Formula: Marketing-attributed GCI / Total marketing spend.
Why it matters: MER normalizes across channels and seasons. It forces channel-level accountability and prevents over-funding low-yield pillars.
What good looks like: Sustained MER above 4.0 across a full cycle, with top channels exceeding 6.0. Attribute conservatively to avoid double-counting with sphere/referral.
Action: Build a rules-based attribution model (first-touch for awareness channels, last-touch for conversion campaigns). Reallocate monthly to the top two channels; cap experiments at 10–15% of spend.
Productivity and Margin
4) Sides per Agent (Trailing 12)
Definition: Total closed sides over the last 12 months divided by the average active agent count.
Why it matters: Average hides the truth. Track by quartile to expose the middle—where most margin is gained or lost.
What good looks like: Stability or growth in the middle 50%. If growth comes only from the top decile, you’re concentration‑risked and not scalable.
Action: Publish a quartile report monthly. Require performance plans for the bottom quartile; resource the middle with targeted systems that replicate top-quartile behavior.
5) Company Dollar per Side
Definition: Company dollar (GCI minus agent comp) on a per-side basis.
Why it matters: Volume without company dollar is motion without margin. Industry gross margin compression is well documented; you need precision on every side to defend profit.
Evidence: See Brokerage Gross Margins Hit Record Lows for a clear view of margin pressure across models.
Action: Track company dollar by source (sphere, referral, portal, team-generated). If portal deals produce lower company dollar per side than your threshold, adjust splits or fees on that channel—don’t subsidize it with higher-margin business.
6) Contribution Margin per Agent
Definition: Company dollar minus all variable costs attributed to the agent (lead gen share, ISA, marketing seats, transaction coordination, E&O, tech seats).
Formula: Company dollar − Attributable variable costs.
Why it matters: This is the real profitability per desk. Splits, fees, and value stack must reconcile here—not on top-line GCI.
What good looks like: Positive contribution margin by month within two quarters of hire. Set a minimum floor and a time-bound runway; exit or redesign roles that don’t clear the bar.
Action: Build a per-agent P&L. Color-code cohorts (new, core, top) and review monthly. Tie resources to contribution, not promises.
Pipeline Health and Conversion
7) Pending-to-Closed Conversion Rate
Definition: Ratio of closings to pendings within a 60–90 day window, segmented by agent and lender/title partner.
Why it matters: This is your fallout detector. Contracts failing to close destroy cash predictability and inflate perceived production.
What good looks like: A stable rate by price band and by partner. Volatility signals process gaps, unrealistic pricing, or weak financing partners.
Action: Instrument aged pendings, appraisal/inspection fallout, and financing denials. Coach where fallout clusters. Change vendor mix if partner-level fallout persists.
Expense Discipline
8) Operating Expense Ratio (OER)
Definition: Operating expenses (excluding cost of sales/agent comp) divided by gross profit (company dollar), tracked on a trailing-12 basis.
Why it matters: OER is the guardrail for ambition. Growth without OER discipline produces headcount inflation and software sprawl.
What good looks like: Mature, steady-state brokerages can target sub-50%; growth-phase firms often operate 55–70% while building capacity. Directionality matters more than a single point—trend it.
Action: Run a zero-based review quarterly. Kill underused software, consolidate seat licenses, and convert fixed cost to variable where possible. Publish OER targets by quarter and manage to them.
Retention
9) 12-Month Agent Retention (By Cohort and Quartile)
Definition: The percentage of productive agents still active after 12 months, segmented by cohort start date and performance quartile.
Why it matters: Retention compounds profit—experienced producers carry higher win rates and lower enablement cost. Retaining the right agents is more profitable than perpetually recruiting to backfill churn.
Evidence: Retention’s contribution to profitability is well established. See The Value of Keeping the Right Customers for an overview of the economics.
Action: Instrument a 30-60-90 onboarding scorecard tied to first contract, first closing, and sphere activation. Flag early churn risk (no signed agreements by day 45; no active buyers/sellers by day 60). If your top quartile retention falls, the issue is leadership and enablement—not recruiting volume.
Execution Cadence: Make the KPIs Run the Business
Real leverage comes from rhythm. Here’s how to operationalize these real estate brokerage KPIs inside a lightweight leadership cadence:
- Weekly: CAC payback tracker by channel; pending-to-closed health; OER flash (month-to-date).
- Monthly: Contribution margin per agent; company dollar per side by source; MER with reallocation decisions.
- Quarterly: Quartile productivity review; agent retention by cohort; zero-based OER reset; compensation and fee model check.
Publish the scorecard before the meeting. Decisions must tie to thresholds set in advance, not opinions formed in the room. If a KPI is red twice in a row, it triggers an action plan—budget shift, coaching intervention, vendor change, or exit.
Context: Why This Set Works
These nine real estate brokerage KPIs are designed to interlock. Acquisition economics (1–3) force clarity on spend. Productivity and margin (4–6) expose where profit is created or destroyed at the desk level. Pipeline health (7) stabilizes cash. Cost discipline (8) protects the bottom line as you scale. Retention (9) compounds returns over time. Together, they counter the industry’s two biggest risks: margin compression and talent churn.
For additional operating models, scorecard structures, and cohort analyses, explore RE Luxe Leaders® Insights. We routinely benchmark top-quintile producers and leadership teams, and we pressure test cost structures against market realities reported by the 2024 Profile of Real Estate Firms.
If you lack the instrumentation or accountability cadence to run these KPIs, build it now. In our advisory work, we implement a RELL™ operating cadence that centralizes data, eliminates vanity metrics, and ties weekly decisions to quarterly outcomes.
Bottom line: Let these real estate brokerage KPIs govern spend, hiring, and enablement. You’ll trade anecdote for evidence, protect margin, and scale on purpose—not hope.
