In This Issue...
Words of a Champion
Dirk Zeller
CEO
Being able to adapt to the changing world is essential to maintaining long-term success. Recognizing opportunity and seizing the chance will make you have many successes in life. We must equate challenges as opportunities towards success.
I have clients in every conceivable market condition. Each market condition brings about different challenges. It also brings along different opportunities. Don’t neglect to slow down to clearly evaluate the opportunities. To invest your knowledge in the unique skills you have and the opportunities put forth by the market. Don’t get too set in your thinking that you can’t make small adjustments and seize the moment.
Let me share with you the story about lost opportunity. From 1900 to 1967 the Swiss were the leading watchmakers in the world. In 1967, when the Swiss patented digital technology, they rejected it in favor of the traditional ball bearings, gears, and mainsprings they had been using for decades. They neglected to seize the opportunity of this “new marketplace”.
A Japanese company picked up the patent for the digital technology. Within a short period of time 50,000 of the 60,000 Swiss watchmakers were out of business. They didn’t react to the change. Overnight this Japanese company became the leading watch manufacturer. The company who seized the opportunity? Seiko.
Stop and look at your marketplace. There are opportunities everywhere. That is one of the greatest things about selling real estate. The field is wide open. Anyone and everyone can have success. Look at what opportunities are available now and where the market is going to create new opportunities in the future.
Wayne Gretszky was once asked why he was so much better than every other hockey player. His response was, “I always go to where the puck is going to be.” The great one was always thinking ahead of the game. He was playing a few shots or passes ahead of what was happening at the moment. He was playing in the moment, but also playing two shots ahead.
The question is, are you playing a few shots ahead or are you playing a few shots behind?
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Dirk Zeller, CEO
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Benefits of Coaching
Coaching for peak performers has been around for years. The most successful athletes, for many decades, have been coached to win the big event. Tiger Woods would not be the golfer he is without his golf coaches. Michael Jordan, John Elway, and Michael Johnson have all had coaches. Leaders in the business world, with some of the most successful companies, have coaches. Behind each great milestone, or accomplishment, stands two people — the one who executes the task or carries out the game plan and the one who helps to create the game plan and teaches the executor to improve his skills. Maybe it is time to evaluate and consider the benefits of a coach.
A good coach has five basic traits. When these traits are used to help you move forward in your life, the results are amazing. A coach can help you increase your production and enjoyment in life and help you craft a life of long-term success.
The first trait of a great coach is the ability to listen and help you clarify your goals and vision in all areas of your life. Earl Nightingale, the famous speaker, stated we are goal-seeking organisms. Our purpose is to set and achieve goals in life. The difficulty for people is not in achieving their goals, but setting them in the first place. We can truly accomplish anything in life provided we truly decide to do it.
The second trait of a successful coach is guiding you to understand that all goals must have deadlines. Deadlines get one’s juices and thoughts flowing to create the desired result. Have you ever planned to go away for vacation and two days before you are to go you get a flurry of activity in your business? It is because of the deadline that the activity increases and things begin to happen. How would you like to have that kind of production ongoing? Determine effective deadlines for all areas of your business.
A great coach will take the goals and vision you set for yourself and teach you to achieve them. He will help you create the step-by-step game plan to achieve the envisioned future. Even the big projects that seem like mountains can be broken down into bite size pieces, which are called daily disciplines.
For example, I had a client in 1998 that wanted to earn over $250,000 for the year, when the year before he had only earned $130,000. We worked diligently to break down into bite-size pieces what he needed to accomplish in order to achieve his goal. Once the bite-size pieces were determined, we were able to determine the daily disciplines for him to undertake. Because he had to just focus on his daily disciplines, the task was not paralyzing. When he got behind in achieving his goal, it was always caused by his not doing his daily disciplines. As his coach I helped him create the game plan and target him to execute it daily. He achieved and broke his goal by earning over $265,000 for 1998, which was over a 100% increase in his business. Coaching really works in real estate sales, as in other fields.
A great coach will show clients the consequences of not following through on their goals and commitments. The coach will provide ongoing motivation and inspiration during the storms of life. The storms of life will come. We will experience all the storms in this world. We cannot avoid them. Since we cannot avoid them, we must prepare for them. It is not the storm that causes the problem; it is how we react to the storm. A great coach will help you brace for the storm that otherwise might overwhelm you. Coaching provides the motivation and inspiration for our lives to overcome those storms.
Lastly, a great coach provides accountability and is available for you. A great coach will help you evaluate your progress against your goals and vision. He will hold you to the standard that you have set for yourself.
The truth is everyone needs a coach. Hiring a coach is making an investment in yourself. The benefits of coaching pay years of dividends. Where would Michael Jordan be without his coaches? Great coaches enable their clients to increase their abundance more rapidly without experiencing the many mistakes and pitfalls of being on their own. We have had coaches and teachers throughout our lives. The most successful people never outgrew them. They work with them today to achieve peak performance. Do not neglect to make the investment in yourself for you and your family.
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Calculating and Analyzing Real Estate - Part 3
Three key statistics reflect real estate sales success better than any other indicators. These statistics are: Average list price compared to average sales price, average number of days on the market, and average number of listings sold versus listings taken. In this article we will take a look at Average Number of listings sold versus listings taken.
Average listings taken versus listings sold
This competitive number will demonstrate to the world how well you do your job of selling homes. When you can say to a seller that you sell more than 98% of all the homes that sellers list with you, you present strong evidence that your clients will assume a greatly lowered risk when working with you.
One of the greatest fears a seller experiences stems from the concern, “What if I pick the wrong agent? What if I’m hearing fast-talk from a salesperson who wants to pound a for sale sign in my yard without the experience to get the job done?” By presenting your track record in the form of a high percentage of listings sold versus listings taken, you quickly erase concerns and provide comfort and relief to prospects.
In a neutral marketplace with good sale activity, the average listings taken versus listings sold historically hover around 65%. In a seller’s market, the number is higher, but on average when you look at the number of sales against the number of expired listings and withdrawn properties from the marketplace, the average is 65%. Think about it: That means that a full one-third of the homes that are listed fail to sell for some reason or another. This is an astonishing figure that escapes the awareness of average agents and most sellers, and it’s a nugget you can use to your competitive advantage.
Doing the math
To calculate your listings taken versus listings sold ratio, follow these steps:
- Add up the total of all properties you listed over the recent period of not less than three months.
- Of all properties listed over the recent period, add up how many sold.
- Divide the number of sold listings by the total number of listings to arrive at your listings taken versus listings sold average.
- Ratio: Number of all listings sold ÷ Number of all properties listed = Average listings taken versus listings sold ratio
Benefiting from a sky-high average
When I was selling, I took more than 120 listings a year, of which only a couple failed to sell. I knew this average distinguished me and created a strong competitive position that I used in my listing presentations.
I would ask the sellers: “Based on my average listings sold versus listings taken percentage of 98%, would you agree that you really have no risk listing your home with me?”
If I encountered hesitation or resistance after that statement, I’d present an analogy like this: “Mr. and Mrs. Seller, let me ask you this. If Bobby came home with his math test next week and he scored a 98% out of 100%, would you consider that an outstanding result?”
If they didn’t answer that last question with a strong “yes,” I had to question whether they were the type of clients I wanted to win over. If they did say yes, I’d continue, saying something like: “So then you agree that 98% of listings taken versus listings sold is outstanding as well?”
Agents are paid to achieve results. Truth is, you can be the nicest person in the world. You can call your sellers weekly, send them stuff in the mail, share marketing reports, and hand out coffee house gift certificates. You can love on them as much as anyone can. However, if you don’t sell the home within the listing period, in their view you didn’t do your job and you are incompetent. Not only will you not get paid for the sale of their home, but also you’ll lose future sales from all the friends they would have otherwise referred to you.
Sellers base their assessment of an agent’s service on results, period. Did the home sell? Did they achieve the expected sales price? Did it move in a reasonable time frame? Were they able to move when they wanted to?
Obviously, during a listing presentation, sellers can’t know what their experience with you will be. But the statistics and competitive positions you present give them a pretty clear idea of what they can expect. Performance ratios tell your story in numbers and give prospects the facts they need to make good decisions.
Over the course of my career I regularly went head-to-head against a strong competitive agent who did almost as much business as I did. Frequently, we both sought the same expired listings. Often, our calls and mailings to the owners arrived almost in sequence. Yet when all was said and done, ultimately I never lost a listing to him. He never knew why, and I am sure it bugged him.
My secret weapon was my list-to-sale ratio. His was terrible, sitting somewhere below 60%. When the client was making the decision, all I had to do was show the list of my active, pending, sold, and expired properties. Then I would put his list next to mine for the seller to review.
I knew what I was up against when I was competing with him. I had the facts to present. And they worked in my favor every time.
Sellers want to know their odds of success. Use your stats to show them the proven competitive advantage you bring to the table.
Interpreting the Findings
Be ready and willing to invest time to analyze and interpret your own and your company’s competitive position in the marketplace. Your broker may have useful stats to contribute, but likely you’ll need to do additional work to calculate the Big Three ratios described in the preceding section of this chapter and to apply the stats to various segments of your marketplace, including geographic areas and specific price ranges.
Without solid facts, you can’t possibly know, define, or describe your competitive advantage.
Jack Welch, in one of his six famous rules for business says, “If you don’t have a competitive advantage, don’t compete.” Without stats, you have nothing to compete with. So begin right now to compile the data, slice and dice it in every ethical way possible to find your edge, and then present that edge as your proven competitive advantage to prospects.
Finding your edge
Maybe your edge is that you move the most units, or that you have the highest sales volume, or that your Big Three stats top the charts in a specific geographic region or price range. Once you know your edge, you can market and leverage your point of difference to expand your business.
For instance, you may find that you rank in the top five for units sold in your area. You can leverage that strength as you expand into a nearby geographic marketplace with similar homes. Instead of starting from zero in the new market area, you can use your current dominant stats as a bridge. Instead of ranking in the top five for sales units in your current concise market area, spread your numbers over your current and future market areas and you’ll probably rank in the top ten for the combined area. Then you can work from that respectable statistical position to gain more market share in your new and currently weaker area.
Once you know your numbers you can put them to work strategically and tactically as you devise a plan to expand your market share. The key is to start with the facts, dig to find your edge, interpret your edge, and exploit it to your advantage. No one is going to hand over listings and sales; you’re going to have to win them over.
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Your Business Vision Establishes Your Principle
Your principles in how you run your business will be influenced by your core values and core purpose. If your core values and purpose don’t match, you will have incongruence in your business. The first people who will see it are the members of your team. You will lose credibility, trust, faith, passion, and commitment to you and your cause. They will begin to accept cutting the corners in your business that you allow yourself to take.
The next group that will become aware is your customers. This is especially true if you publicly state your core purpose and core values verbally or in your marketing pieces. Even if they don’t read it or hear it publicly, they will observe it. It is impossible to get away from the observable elements.
Once you have established core values and a core purpose, you might have to change. You might have to change yourself first. When leading a team, the leader is the one who usually has to change the most. You might also have to change your systems, procedures, marketing, advertising, customer service, communication, lead generation, lead conversion, strategy, and tactics. There are numerous changes that might need to be addressed once you have clarity in your core values and core purpose.
You might also have to change people. My belief is you can’t train people to adhere to and believe in your core values. They either buy into them 100% or they don’t. There really is no middle ground on this. As the lead agent and owner of the business, you do have to train them on the core values and purpose and the quantifiable actions that fulfill those values and purpose. You can’t just hand them a piece of paper with them on it and consider it done for good. There will be a constant education as to the meaning of your core values and core purpose. Through training, education, and coaching of your core values and core purpose, you want internalization applied to their decision making, so you create adherence. If a staff member doesn’t share your view, you can’t change it; you can only improve it.
Champion Team Rule – If you can’t change people, you have to change people.
You might have to read that a time or two for it to sink in. It’s always a better statement from the platform than on paper. What I am trying to express is that if someone on your team won’t improve or change, you will have to find someone else for the position. You will have to change to someone else.
An effective business vision will help you make cogent decisions on staffing. Do you want to provide Lexus customer service or Kia customer service? Is the experience for your client important or is getting the job done professionally and well more important?
Look at Starbucks. Their whole vision and passion is about the experience. We pay almost $3 for a latte that costs them less than $.50 to make for us. They are getting in excess of an 80% profit margin at the cost-of-sales level in their business. This is all due to the experience. In fact, a recent memo that came from the CEO to all the employees expressed concern that, since Starbucks went to the totally automated machines, the experience of Starbucks had suffered. The aroma of coffee is less noticeable, the grinding sounds are absent, and the barista measuring coffee and tamping it down (pounding out the used grounds) are all missing from the Starbucks coffeehouse experience.
As a business, if your core vision and core purpose define the service and experience for your clients at this level, you’d better make the commitment to have enough staff to pull that off. You will need to guarantee that your systems are customer oriented; that they are easy to understand for your staff and clients. The clients you select can’t be focused on a service model that Joe Cheap Discount REALTOR® uses. If the price you list the house for and the fee you charge are the most important concerns, this is probably the wrong client for you.
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