Fear is a great short-term motivator. And so it was in 1980, when I was selling real estate, and having my best year ever. I wasn't driven by fear; the buyers were. Homes were appreciating in the Seattle area 30% per year; buyers would literally stand on a plot of ground and ask, "How can I get a home built here before this lot is sold to someone else?" Agents were finding it easy to 'close' buyers.
In fact, agents didn't need to close; buyers closed themselves out of fear that they wouldn't get a particular home! Then, the market turned. Rates shot up to 18-22%. Many agents languished. Although I continued to have a great year, most of the agents in our office were earning about one-quarter of what they had previously made. You can imagine what this did to the bottom line of the office. At this time, my broker abruptly quit. Without any training in management, I blithely said I'd like to manage the office. I believed that the agents merely needed training and motivation-and they would bounce back to their previous levels of production. I was half right.
So, in the middle of 1981, I started managing. As you can imagine, agents weren't knocking down the doors to join the office. And, the office was bleeding 'red ink'. I knew I had to recruit and train. Here are the lessons I learned from the school of hard knocks. Recession-proof your agents BEFORE you experience a recession. What I didn't realize at the time I was selling was that I was recession-proofing my business. What was I doing differently from other agents? Two things. First, I was pro-actively prospecting. Others were just sitting and waiting for leads-they were
'dependent' on the company floor time and open houses for 'leads'. When these lead sources dried up, their incomes plummeted, along with the office profits.
Second, I took a great Dale Carnegie sales course and really learned to sell. Then, when fear didn't motivate buyers, I knew how to take buyers through the sales steps to reach good decisions. Pro-activity is key. Brokers, what does this mean to you? You must teach your agents to pro-actively get 'leads'. Oh, I know you want to recruit by promising agents that you 'give good floor time'. That's so dangerous. When floor time dries up, the agents blame you. You love to recruit by promising
relocation leads. Watch out. You can't determine the number of those affinity relationship leads, or how much they will charge you. You only really have control over your pro-active activities. Teach your agents to become aggressive, consistent prospectors. It's more personally challenging, but you have control over the outcomes, and, I guarantee you, you will become much more profitable in all markets. Teach your agents the sales process-and how to sell effectively. Today, too many agents believe that systematizing everything is the answer to more income. It's only part of the answer. There are still the people-you know, those sellers and buyers! They need salespeople with sales skills. Yet, when I analyze the
training programs of real estate companies, there are very few sales skills
taught-and even less taught in a process. And, even less taught interactively, where the agent practices part of the process-then all of the process. You can't rely on fear to drive buying decisions. Teach your agents to sell-or send them to a great sales course. I mean a course where the agent learns the sales process, how to answer objections, and practices every step of the way. To be effective, this course must be spaced repetition learning-workshopping over a period of time, with time out for practicing and reflection between workshops.
Watch for three attributes for a successful, effective sales course:
1. It employs spaced repetition to assure the sales skills 'stick'
2. It includes in-depth, critical, built to increase difficulty sales practice
3. It has high accountability on the student to practice the sales skills
in and out of class through an activity plan
Teach your agents to analyze market trends and anticipate changes. I've been teaching business planning for managers and agents for over a decade. My book, The Real Estate Agent's Business Planning Guide, is the most-used planning process in America. Still, it amazes me that real estate professionals don't do the whole process. They just skip to the 'fun part'-goal setting for the next year. Yet, a very important part of the business planning process is the first step-analyzing where you have been and where you are now, before you decide where you intend to go next. This means doing a market analysis to determine market trends-so that you can meet those market challenges quickly. This also means analyzing your own
business habits-where you got most of your business in the last year, how much money and effort you spent on that best source, etc. In changing markets, this is especially important. Our management team did a business planning series for the top ten percent of our agents during a changing market, and helped them switch the emphasis of their businesses from new homes to re-sales. So, they were able to avoid the stagnant coming new home market that we saw from our market analysis.
Help Them Analyze Where They Will be in Three Months.
Most real estate offices have software programs to project income in various time
increments. However, few agents have such software-or know even that they
should do this for their own businesses. Because I was taking over a real estate office that was languishing, I created several types of analyses to help agents see where they really were. Then, I helped them create plans to change their business projections for the better. Most of the agents were blithely unaware that, if they kept up their present pace, they would have no closings in three months. So, I created a short-term projection analysis. It's in my business planning book.
About YOUR business plan. Now, let's get real. Very few brokers have a business plan. It's not too late for 2003. You need to think through your business moves. To do that, you need a great process to teach you how to think about your business. You need to do that same market analysis you're having your agents do. Set up your plan based on the realities that you've analyzed. Then, you're ready to create a business plan to meet your challenging market. Include a detailed recruiting plan with a budget. Create a training plan that meets the training needs you've defined through your review analysis
The good news. By teaching my agents to go pro-active, sell, and analyze business trends, I turned my office into the number one office in productivity per agents and profits in the company. It will work for you, too. Start now, so you'll have a splendid 2004.
