How to Increase Your Gross Commission
Income - 3 Ways
There are only three ways to increase
your gross commission income.
1) Increase the number of units you sell
2) Increase the sale price of the units you sell
3) Increase the fees that you charge
All of these ways lead to more income. Both take
effort and a good strategic plan to execute. In the end, they
don't happen by accident. In this article I will deal exclusively
with how to increase the sales price of the units you sell.
The biggest challenge for Agents who are trying
to increase their sales price is breaking into higher priced marketplaces.
Many times those marketplaces are dominated by long-time established
Agents who work hard to keep control of them. To really establish
or increase your presences in any marketplace you have to take
it from someone else.
I know a lot of you are going to find that last
statement uncomfortable, but it's the truth. There are only
so many deals in the higher end marketplace annually. Your efforts
will not substantially increase the number of transactions. You
can raise awareness and selection of those people who are considering
buying and selling, but your efforts have little effect on the
total inventory units sold. The marketplace might go up a few
transactions, but not enough to help you establish a presence.
To really establish a strong foothold in a new marketplace, you
will have to take it from someone else.
Before you decide to enter a new marketplace you
must be prepared to take transactions that you want from someone
else. I believe there are many Agents who are uncomfortable
with this concept. They hope that everyone can all get along and
all make money. You can, unless you want a greater amount of the
marketplace.
When you want greater market share, you create controversy
and potential conflict. The truth is successful people think differently
than unsuccessful people. When you are trying to take market share
away you have to think like a General. When in competition for
market share … you are at war. Again, I am sure some people
are uncomfortable with that analogy, but it is true. There is
no doubt that Coca-cola is at war with PepsiCo; that McDonald's
is at war with Burger King; that Budweiser is at war with Miller.
In each of these examples there is one company with a larger market
share and another that is trying to get it. There are companies
at war with each other in the real estate field as well. There
are national wars as well as regional and local wars. There are
also neighborhood wars for market share.
If you are at war you have to think like a General.
Generals do a few key things, they:
1) Define the objective and direct all efforts
toward that objective: The General sets a clear, obtainable
goal. They understand how that goal is to be measured. The goal
must be defined in detail. For this example it should be number
of units in a marketplace: listing-side units, sale-side units,
and buyer controlled sales, within a certain time frame. It
could also be marketplace percentage of the gross sales. What
is the objective you really want to achieve?
2) Understand the steps to success: Success has
a process to be followed. A great General understands the steps
and applies them with his army in the right order.
Step 1 - The goal will shape the plan
Each goal that you can imagine determines the
plan you have to apply; the more compelling, concise, and concrete
the goal, the easier the plan to create. The probability of
success also increases in relation to the clarity of the goal.
The errors or adjustments you make also reduce as your clarity
increases. The clearer and more broken down into chunks your
goals are, the higher the probability of accomplishment.
Step 2 - The plan determines the action
The plan you use sets the specific action steps
that you need. Having a clearly defined plan allows you to understand
the action that needs to take place. Without a plan you might
be taking action steps in the wrong direction. You could be
using an improper route to achieve results.
Step 3 - The Action creates the results
Success in the final analysis is about action.
It is about taking the actions that are necessary to increase
the likelihood of the results you want to happen. For most Agents
who want more deals, more income, more quality of life it's
all about doing. All those results are contained in the actions
you do and how consistently you do them. A great General has
a plan that is action orientated, and he and his army carry
out those actions. If the General doesn't carry out the actions
and expects the army to do it for him, failure is sure to follow.
As a General, the consistency of what is said and what is done
is essential.
In trying to increase the sale price of the units
you sell, you need to target areas that have the price range
you want to do business in. You need to evaluate the individual
market share of the dominant players in those market areas. You
also need to try to find out what they are doing to attract the
customers and market share they have. The next step is to evaluate
if you have any current customers in that area. The best way to
gain a stronger position is to work with your current clients
to expand your reach. To straightforwardly tell them that you
are trying to raise your sales price and expand into a certain
market section, and can you help me out. Most of your clients
that are in your corner will be happy to help. They could write
a testimonial letter for you. You could then mail this out to
the neighborhood. Then phone follow up behind it. Getting them
to call you when they hear anything in the neighborhood is essential.
Another very effective way to expand in a marketplace
is working with high probability listing prospects. Two
excellent high probability listing prospects are expired's and
FSBO's. These people have identified they want to sell. If they
are in the area you want to expand into, the match is powerful.
The key for expired's and FSBO's is going to the door if you can.
Since you are trying to take market share away in a new area,
you need to be physically visible in that area. By directing your
efforts to these areas, FSBO's and expired's, it shows success
by listing and selling these when others could not.
There are a number of ways to expand your business
in terms of sales price. Some are quicker and more rejection oriented,
like expired's or FSBO's. Some will take longer and are easier,
like working through your current clients. What is the timeframe
you want to achieve this in? For you to have more market share,
someone has to have less. There is no way around that issue. The
only question is what are you prepared to do?
If you'd like step-by-step training complete with
scripts and tools on "How to Protect Your Commission"... check
out my program here.
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