In This Issue...
Words of a Champion
Dirk Zeller
CEO
Consistency is the difference between massive success and a struggle. It is critical to establish the habit of doing the daily disciplines. Being consistent in your effort of new business generation leads to big success. Let me share with you an observation I have made. If our goal is to make 10 contacts a day for 5 days a week, we need to make sure to hit the goal each day. Being off a few days can cause tremendous damage to our income. Let me give you an example:
|
Monday |
Tuesday |
Wednesday |
Thursday |
Friday |
Goal |
10 |
10 |
10 |
10 |
10 |
Actual |
10 |
3 |
9 |
8 |
4 |
If you looked at this week, you would see it is a typical week for a lot of agents. There are a couple of really good days of prospecting, one solid day, and two poor days.
The goal was 50 contacts for the week. Actual was 35.
The actual is like losing 1.5 days of prospecting. If you worked a 50-week year, that’s 75 days that had no prospecting, that is almost one quarter of the year. You generally have about 3 months of zero prospecting. We cannot afford to take a hiatus from new business generation for 75 workdays.
Question: Can you afford to be short of your goal in deals and income by one whole quarter?
Can you afford to take one quarter off of prospecting?
This is pretty staggering stuff. It’s about creating a routine and doing it daily. Make the contact effort daily.
To Your Achievement of GREATER success,
Dirk Zeller, CEO
RealEstateChampions.com
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Competing with Other Agents
All agents are at different stages of their career and different levels of production. Each has their own philosophy for running their business and different levels of staffing for accomplishing it. I get asked constantly, “How do I compete with agents that have more listings, staff and production than I do?” That is certainly a valid question since there are a whole lot more new agents, inconsistent agents and average agents then there are mega-producers. How do you compete against a mega-producer? Before I answer that let me give you some rules of how you don’t.
-
Don’t compete on numbers or production (The number of listings or sales).
If someone does a whole lot more than you, you don’t want to point that out to the client.
You do want to question the client if that is an issue for them. A great question to ask would be, “Is a certain production level of the agent important to you?” or “Provided that an agent clearly demonstrates their ability to do an outstanding job for you, does it matter the size of their operation?” or “What are the top three items that you are concerned about when selecting an agent?”
-
If you are newer, don’t compete on years in the business.
We need to level shift that discussion to a job well done or satisfied clients. When competing with mega-agents, make sure you have testimonials handy. Clearly demonstrate the success you have achieved with satisfied clients.
-
Focus on per agent productivity if it’s a competitive point of difference.
I have seen far too many mega teams that do a lot of business only because they have a lot of bodies on the team. One of the first things we look at when working with a mega-agent team is the production in units divided by the number of people on the team. This number really demonstrates the skill level of the people on the team. Too often those mega-agents only have warm bodies.
I recently talked with a mega-agent that had a large ego. He was only a mega-agent because he had lots of assistants. He had 10 people on his team with 150 gross units sold – that’s only 15 units a person or only 1.25 homes a month per person! The truth is that’s pretty poor production for all those people. He is also fooling himself that he is making any money. You could easily explain to the seller that with all those listings and all those leads they are working with, they only get 1.25 transactions a month – which is not right; the conversion rate on leads is extremely low. You can do much better than that and not waste opportunities to sell their home and actually increase their probability of sale.
If a mega-agent has 20 active listings with an average of 10 calls a month per listing – that’s 200 calls a month. To only convert 1.25 transactions a person from over 200 inbound calls a month shows there is a problem. You then assure them that you personally take all the calls on their home; you are not passing it to someone who is obviously not prepared to convert the call to an appointment – which is the key to sales- and that your conversion ratio and production ratio is much higher.
The fundamental argument for any agent competing against a mega-agent is service based. A mega-agent cannot provide the personal service themselves that a singular agent can provide. They can provide great service through others on their team, but not themselves. When I was selling 150 homes a year there were only so many touches I could provide my clients in a personal manner. I had to rely on my transaction coordinator or marketing coordinator to do more touches than I did. Since the biggest complaint the consumers have toward Realtor’s, other than they falsely believe we make too much in commission, is communication.
When competing against a mega-agent, we must sell personalized service and personalized communication. “You won’t hear from three other assistants, you will hear from me. You aren’t listing with these assistants, you are listing with me. Who better to handle all facets of the transaction than the agent you list with … the one that you trust.” Doesn’t that make sense?
As a mega-agent it was my job to be prepared for this discussion by the other agents and show them the benefits to my system or business model. What it boils down to is who has the best presentation and sales skills. Does the need for personal service carry greater weight than more production? Did you convince the client the production part is easy, the service part is hard? Did you share with them you could run your business like the mega-agents, but you decided your clients were too important? You decided that you don’t want to take the risk of a dissatisfied client. (Provided you really believe that and can demonstrate that to the client or prospect.)
It is better to position yourself with a competitive advantage. There is an old adage that we must define our competition before they define us. When trying to grow your business and compete with mega-agents take the right steps and make a strong belief-driven presentation. More often than you think, you will come out on top!
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Defining Leads
One of the major challenges facing a real estate salesperson is managing leads. Selecting the right lead becomes critical to your success.
The first key step is defining what a lead is to you. I have found from coaching and training real estate agents worldwide that, for even the best of them, the definition is rather broad. Most real estate agents define a lead as a human being who will create condensation on a piece of glass held up to his mouth. In other words, it is anyone breathing.
The most successful real estate agents have clearly defined definitions of what is a lead. Let me share mine with you: An “A” lead is someone who would buy or list their home in the next 7 days. These people are highly motivated and ready. Whoever gets to them first wins the game. For me, they had to be pre-approved with a lender as buyers or be in the pre-approval pipeline for my lender. They also needed to be realistic as to what they can buy. The key to landing these people is the ability to set appointments; to convince them to come in and meet with you again.
A “B” lead is someone who will buy in the next 30 days. They need to be pre-qualified by the lender and ready to move forward when the proper property comes along. They also must be realistic as to value, pricing, and what they can afford. The people who are trying to find the perfect house will never find it. There are people who look at homes regularly who would move if they could sell theirs for $30K over market and could buy for $25K below market. They will even make this statement as if they are doing you a favor. Do not waste your time. These people will never buy. The conditions will never be ‘just right’.
A “C” lead is someone who will buy at a specific time in the future. The key word is specific. There is a reason for the move. They are retiring at the end of the year. They have one child left to graduate high school, and then they will downsize since their child is a senior this year. These are specific reasons and time frames. The people who say, “We are thinking about moving in two years,” rarely do.
Take the time to evaluate your leads to find the motivation. Be sure to classify the leads clearly into categories. Focus on generating the “A” and “B” leads. These are the key leads for success. Remember if the lead is 6 months away from buying, your commission check is at least six months away. How much time can you invest for the future payout?
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Three Areas of Business
Any successful businessperson, over a span of years, has embraced the focus to build three areas of their business simultaneously. These three areas are the growth areas, working “in” the business, and working “on” the business.
Growth
Growth is the engine that drives sales growth. It’s the part of the business that brings in the revenue of the business. The more time invested in growth daily, weekly, monthly, the greater the resulting income. The vast majority of Agents spend too little time in growth. Growth is the DIPA activities that I have talked about throughout my writings. Growth is the critical part of the business, without growth, a business will fail.
I know a lot of Agents who are highly skilled at growth, but poorly skilled in administration and business planning, who earn large amounts of money. I know very few Champion Agents who are not highly skilled at growth. You can have huge deficiencies in administration and even customer service (I don’t recommend it) but still win the income game through growth. You can’t be deficient in growth and win. Growth is the engine that powers the train; you must first pay attention to growth. Your prospecting should comprise 65% of the time you invest in growth daily. If you don’t prospect, the other growth areas won’t happen.
“In” the business
Working “in” the business is the administration or production supporting activities. These need to be done, but not at the expense of growth. The “in” area focuses on you being an employee working in your business doing functions any employee would do. Our goal through the segment of working “in” our business is producing results for our delighted clients. We are trying to turn clients into evangelists so they generate referrals. Their transition to that level of customer satisfaction comes from working “in” the business. If you create good systems, processes, checklists, and have highly trained staff you can reduce the time you invest in this area.
“On” the business
This segment is the segments most Agents neglect until they want to retire and find out they have nothing to sell. In Michael Gerber’s book, The E-myth, he talks about the myth of an entrepreneur. He describes that most entrepreneurs have really bought a well paying job and don’t really own a business. Realtors® clearly fit into that category of entrepreneur. We also clearly fit into buying a well paying job.
When we work “on” our business, it really shapes our long-term success and growth from just running faster on the treadmill of your business and life. Your long-term financial wealth is contained in the working “on” your business segment. Your ability to earn a profit and increase the profit is key. Remember, sales is a margins game. The more time we invest to plan, read, strategize, evaluate, and implement new ideas, tactics, and strategies, the more we evaluate the market, our time, our numbers, and return an investment, the more ownership we gain. Becoming the owner of your real estate business only happens through diligent working “on” your business. Instead of being a highly compensated employee who pays the bills, why not become the one who orchestrates the growth of the company? Be the one who has something to sell when you want to transition or retire.
Working on your business is critical to helping you move to the next level of production, or to decrease time worked without reducing income, or finding where to cut expenses by 10%. Working on your business will help you create economies of scale in administration and new ways to produce growth and income in your business. You need one hour per day of working “on” the business. For every minute you plan, you will save ten minutes in implementation.
What do you think your business would look like in 90 days, or even six months, if you were to implement the below daily routine?
Growth: 3 hours
Administration: 1 to 2 hours
Business: 1 hour
By following the review patterns or pausing at the end of a day, week, month, quarter, six months, and year, you automatically increase the “on” time in your business. Another technique would be to schedule a block of additional planning and execution time at the end of each week. Most of our clients have ninety minutes of planning time each week where they work to improve their business. If you work to employ these techniques, you will transform the results of your business in a few short months.
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