When listing the benefits of a sales career, real estate agency profit consultant, Gary Pittard, thought, “This is truly a great career. I wonder how many real estate salespeople actually appreciate the golden opportunity their real estate careers offer them”.
Gary believes that when you landed a position as a real estate salesperson, you won the lottery. Are you making the most of your ‘winnings’?
With another financial year behind us, it’s a good time to ponder: “Are you happy with your profit?”
Stating the obvious: Profit is the money you keep after expenses are paid. I’m compelled to mention this because the real estate industry and its systems focus on turnover. Turnover is not profit. MORE
Profit is seldom mentioned in typical real estate training.
So, are you focused on profit? If not, you should be.
There are two ways to increase your profit.
The first is to grow your business – increase income.
Without money, you have no funds to grow your business. Growth needs cash, and if you want to build a winning team, which will give you more profit and more free time, you need money to do so. It is far smarter to grow from profit than it is from borrowings.
My friend, Dave Anderson, author of Up Your Business, says, “You cannot shrink your way to Greatness”.
Building a team requires a foundation of intent and purpose. Set up attraction systems to increase your incoming hiring enquiry. Set up sorting systems to help you determine the winners and eliminate those who won’t make it. Set up training systems to bring out the best in your people, and set up induction systems to get your recruits off to a flying start.
Also set up sales management systems to keep the team focused on results over the long term.
Don’t have those systems? Pittard does. Let me know if we can give you a hand.
The second way to increase your profit is to reduce expenses.
Know your Break Even Point (BEP). How many sales do you require to break even?
Profitable businesses are built on a platform of solid financial foundations. The most fundamental of all financial foundations is to know the point at which all expenses are covered and you begin to make profit.
To maximise your profit, you should do both – increase your income and reduce expenses.
Sometimes leaders are too busy listing and selling to focus on profit. The trouble is, you can be busy bringing income into the business while large sums go out.
It’s like filling a bucket with holes in it: you pour the water in at the top, only to have it leak out at the bottom.
Think profit. May your next financial year be profitable!
PS Pittard periodically broadcasts a webcast entitled How To Make Sales In a Tough Market. This webcast is free and designed for agency principals. It is by invitation only, as we cannot accept some agents owing to contractual obligations to our current members. For more information and to check your eligibility, please follow this link.
In this short leadership session, real estate agency profit consultant, Gary Pittard, discusses Succession Planning. Many agency leaders talk about it, but when questioned about what they have done with their succession planning, Gary finds that often very little has been done.
Selling Rent Rolls is a relatively straightforward process, but sales departments can be a little trickier, mostly because outside buyers do not expect them to be profitable. Therefore, you don’t have people queuing up to buy them. So, what’s your plan?
A common complaint from leaders is that their salespeople lack focus. It has a been constant theme in my 30 years as a real estate agency profit consultant.
One leader said his salespeople had the attention span of a gnat.
A short attention span is not a problem for most people. Watch people doing leisure activities – things they love to do. They have no trouble giving these activities their full attention. MORE
When they watch a film at the cinema, they’re not fidgeting or walking in and out. If the film is interesting, it gets their full attention.
When the activity is interesting, it has no trouble garnering focus. Salespeople who aren’t focused on the job have managed to turn selling into a chore. Simply, they don’t find the work interesting.
Most salespeople love to do listing presentations and put sales together – who doesn’t? – but won’t do the more mundane tasks that increase the likelihood of them getting to the interesting tasks. Prospecting is a classic example.
Because they avoid prospecting, they do fewer listing presentations. And so they hop from task to task, working on the easier, less productive tasks.
Jeb Blount said in his excellent book, Fanatical Prospecting, that the number one reason for failure in sales is an empty pipeline, and the root cause of an empty pipeline is failure to constantly prospect.
Salespeople who have clear goals and written plans seldom lack focus. They have fun at work, and they get results.
They might find some tasks more interesting and enjoyable than others, but they do the tough tasks because they are working toward something bigger: they are working toward meaningful goals, something they WANT.
With a bigger picture to focus on, they understand that by working on the right tasks they will not only achieve their goals, but also derive huge satisfaction from the process of getting there.
Goal setters know what I am talking about.
Studies have shown that when somebody sets a goal – a goal that they have a 50/50 chance of achieving – they immediately feel happier. They are then happy to do tasks that would be otherwise judged arduous or mundane.
Short attention span? That is for goalless drifters.
Professional sales is not a lottery. It is not a matter of luck. You can control your results. You can achieve meaningful goals. And you can focus, over the long term.
Property sellers need accurate information from the market if they are to develop an understanding of the correct market price at which their property will sell.
According to real estate agency profit consultant, Gary Pittard, the way our industry goes about helping sellers understand the market is all wrong.
Many in our industry indulge in the disgusting practice of conditioning. Sometimes called ‘educating’.
There is a better way. It’s called honest coaching – passing on price feedback elicited from genuine buyers.
This is a two-part article on the Do’s and Dont’s of hiring. Last month, we discussed the Hiring Don’ts. This month we look at the Hiring Do’s.
If you hire somebody with a bad attitude, this will poison your team. Author of Winning the War for Talent, Mandy Johnson, says that people with bad attitudes are hardly likely to suddenly develop a good attitude once they join your company.
Frame your questions around testing attitude, for example, “Can you give me an example of what you think is a good work ethic?”
The worst way to hire salespeople is to use the typical industry hiring system: poach your competitors’ salespeople. This opens the ‘revolving door of mediocrity’.
If you examine the average production of typical industry salespeople, you will find that it is still around $135,000 per annum. Despite selling fees quadrupling in many areas, the industry production average is still at 1993 levels! So, you would have to be forgiven for thinking that the average industry salesperson lacks skill.
Don’t be afraid to hire inexperienced people. If you have sound hiring and induction systems, chances are that you will get an inexperienced person up to winning levels faster than you will with a typical experienced person currently doing the rounds of real estate offices. That’s IF you have sound hiring and induction systems.
Inexperienced people will not be able to demonstrate skill in real estate sales, because they aren’t in the industry. But they will demonstrate skill in their current industry, and they will demonstrate teachability, a willingness to learn. From that you can deduce whether they will learn all they’ll need to know to become skilled in real estate sales.
Your questions should be targeted at uncovering current skills and willingness to learn.
People who say that they are a ‘team player’’ or a ‘people person’ have just given you a junk statement (see hiring don’ts in the last issue). Their CV will give you a clue as to whether they are a team player or a ‘people person’ as they claim.
Look at their employment history. If they have been in the one position for several years, they probably got along with their colleagues and bosses. But if they have hopped from job to job, it’s likely they have personality defects and don’t get along with people. You don’t want this type in your company.
To build a winning team, you need good people of integrity. You can teach them everything else if this is their character foundation.
By this I mean past performance in any endeavour. They may have started off working in a supermarket stacking shelves and risen to store manager. They may have captained the netball team.
Parents who have taken time out of paid work to raise a family will be able to demonstrate a record of performance. Perhaps they headed the school fundraising efforts or were active on the P&C. Ask questions – there will be a history of achievement with the right people.
Yeah, sure – they’re brilliant. They say they will work hard, fit in and are willing to learn. Experience hirers have heard it all before.
Nobody will tell you at the interview that they are lazy good-for-nothings who hate authority, don’t get along, and who do just enough to get by. Nobody will tell you that they’re too scared to prospect, or that they never commit to anything that looks like hard work. But have you ever hired people like this?
Don’t take their word for it. Ever.
Test their dedication to learning with a pre-start knowledge test based on your sales systems. Test their willingness to prospect with two days’ paid work experience. After they start, and before they become permanent, test their knowledge again, and test and monitor their actions during their trial period.
Mediocrity can’t hide from leaders who test their candidates, and who regularly test their established salespeople.
In last month’s issue we said, “Don’t wing it”. This means that you must prepare when hiring, and you must have clear induction systems designed to make your new recruit dollar-productive as quickly as possible (in their first month).
Prepare interview questions, prepare tests, prepare start-up strategies, prepare monitoring systems, prepare coaching systems.
You can waste a lot of money in wages paid to people who don’t make it. The better your systems and preparation, the greater chance you have of developing winners.
Remember that you cannot shrink your way to greatness. When the market is being described by your competitors as tough, that is the time to grow your team.
Keep your marketing for winners constantly running as you do with your listings marketing. You want to be talking to sellers about selling and talking to potential winners about joining your company.
The more enquiry, the greater your chances of finding winners. Keep looking. Never give up.
Freedom of Choice
Freedom of Choice means having the freedom to work, or not to work, in your business. To be able to step back and enjoy more free time, and to have money to enjoy that time, you need people to run the store in your absence.
Developing a team is the best investment of time and money a leader can make. Get your hiring and induction systems right and you’ll never look back.
PS Pittard periodically broadcasts a webcast entitled How To Develop Great People. This webcast is free and designed for agency principals. It is by invitation only, as we cannot accept some agents owing to contractual obligations to our current members. For more information and to check your eligibility, please follow this link.
Real estate agency profit consultant, Gary Pittard, recommends that leaders give their salespeople knowledge tests, yearly at least. If you think that excessive, remember that salespeople get tested all the time. Every time a seller asks, “Why should I list with you?”, the salesperson is tested. Do you want them to respond with the right words?
Keep your team’s knowledge fresh and current. Sharpen the saw.
Below are snippets are from surveys conducted by Roy Morgan over a 17-year period. I have been following these surveys for 25 years and note the position of our industry moves very little in the list of most trusted professions.
Most Respected Professions: Nurses, Pharmacists and Doctors
Least Respected: Car Salesmen, Journalists and Real Estate Agents.
Roy Morgan 2000 MORE
Directors of Public Companies on 25% (down 1%) and Business Executives on 18% (down 2%) are both mid-ranged in the overall result, but well ahead of Real Estate Agents who have equalled their record low rating of 7% (down 3%) and perennial cellar-dwellers Car Salesmen on 4% (unchanged).
Roy Morgan 2017
Yet over the past 30 years I have met many thoroughly decent real estate people, far more than the ‘other type’.
So why does our industry have such a poor reputation? We know the answer:
You can argue as much as you like about whether this happens, but a recent spate of $800,000 fines on some Victorian agents for over or underquoting should be ample evidence that this practice is alive and well. And I wouldn’t suggest it stops at the border into NSW, Queensland or South Australia.
Character issues aside, let’s think about why it happens. One reason alone:
Salespeople do not know how to handle PRICE.
Salespeople know that regardless of the market – boom or down-turning – sellers almost always expect more for their properties than they are worth. Honest agents who give honest price appraisals risk sellers’ displeasure and risk losing listings. So, the weaker and/or less ethical adopt the attitude, “If you can’t beat them, join them”, and quote high because “that’s the way it’s done”.
But now they paint themselves into a corner. They have begun the relationship on a foundation of dishonesty. By allowing sellers to believe that their unrealistic expectations are achievable, salespeople now must use techniques to persuade sellers to retreat from their high prices. Enter buyers.
Salespeople lure buyers with low price ranges – “Offers above $x” – their argument being that they will get buyers to their open inspections and, once they get offers, they “can negotiate the offers upwards”.
The fault with this thinking is that if you quote low you will get low offers. And when you negotiate from a low base, you will always get a lower price than you’d get had you started high. Any negotiation expert will tell you that.
Agents then present these low offers to sellers saying things such as, “Market feedback is lower than we expected”. It used to be called ‘Conditioning’. Now it’s called ‘Educating’. The technique is the same – deliver good news during the listing and bad news during the marketing campaign, with the hope of getting sellers to reduce.
How often have we seen buyers who have been given low price estimates pay for pest and building reports and then attend the auction, but never get an opportunity to bid because the price has galloped beyond the lower price estimate given to them by an agent?
These are disgraceful practices and agents who indulge in them should be struck off for life, not merely fined.
Foundation of Honesty
The smarter approach is to lay client relationships on a foundation of honesty. Tell sellers the truth about the likely sale price of their property. I realise that this is easier said than done: it takes skill.
I have often said, “To tell the truth in real estate and still win the business, you had better be an outstanding presenter”. There are techniques that will allow you to handle price honestly, with both buyers and sellers.
Learn these techniques and you will make sales and keep your integrity intact. You will enjoy a successful real estate career.
Don’t let anybody tell you that it cannot be done. Handling price and laying foundations of honesty make for a rewarding and prosperous career, and meaningful client relationships.
Many agents do business this way and you can too.
In this short sales session, real estate agency profit consultant, Gary Pittard, discusses happiness and its relevance to real estate sales. Happiness is relative – what makes me happy might not make you happy. A win-win outcome is likely if you ask questions, find out what the clients really want and use that knowledge to facilitate the negotiation.
This is a two-part article on the do’s and don’ts of hiring. In this issue, we will discuss Hiring Don’ts. Next month we will cover Hiring Do’s.
First a question: Do you believe successful hiring is an art or a science?
Many real estate agency leaders will say that hiring is an art. Without effective hiring and induction systems, they’d be right. But with systems, you have more certainty of finding and developing winners, moving hiring from art to science. MORE
To give your hiring increased effectiveness, here are some Hiring Don’ts.
In many areas of your life, you probably are a good judge of character, but when hiring you are dealing with people who are trying to impress you. Many will say the right things. And you don’t spend enough time with them to form a character assessment with any accuracy. Belief in your good judgement of character can blind you to clues you may have detected had you been more open minded.
I couldn’t manage another me, and I doubt you could manage another you!
You are looking for somebody who can be trained into a winning salesperson. They may not be as good as you, but can they be trained into a winning salesperson? That’s all you should focus on.
Prepare before you phone applicants. Prepare before you interview. Prepare, prepare, prepare.
The number one cause of high turnover of salespeople is the absence of a hiring system for attracting, sorting, interviewing, testing and inducting candidates.
Hiring systems keep you on track and, most importantly, get recruits started off right. Developing systems as you go reduces your chances of having your new salesperson pay his or her way quickly.
You might think you are saving by not investing in a hiring system, but you’ll spend a lot more in lost wages.
You are interviewing a candidate, not the other way around. Interviewing is like a sale – you are better off asking questions than you are making statements.
Too many statements mean that you are talking about you and your company. You want the candidate to open up and convince you on why he or she is right for this position.
Ask questions and listen. Secondary questions are very important.
You can ask questions to uncover the attributes you expect your candidates to exhibit (see Part 2 next month, Hiring Do’s) and you may find evidence that this person will be a winner. If you rely on gut feel, your emotions will cloud your judgment.
Gut feel has its place, but it’s a better tool for firing than hiring.
The idea is to move people through your hiring system as smoothly and quickly as possible. Decide quickly. Winners won’t wait around too long.
If you are desperate for staff, you will probably make the wrong decision. Keep only quality people on your team. Seek out quality people to join your team.
A junk statement is any statement that sounds good but provides no real information. An example is, “I’m a team player“.
Statements like this should raise a red flag. Can they prove it?
When you detect junk statements like this, question further. “You say you are a team player. What does that look like to you?”
A second question: “Can you give me an example of a project you were working on as part of a team, your contribution to that project, and a specific example of how you worked with the team to bring that project to completion?”
A third question: “When I ask your referee about your contribution to the team, what do you think he (or she) will say?”
Drill down. Ask for evidence. The candidate will know that you are serious about finding the right person. The good ones will appreciate your questions. The wrong people will shuffle awkwardly.
This not a definitive list of Hiring Don’ts but if you address the issues in this list, you will greatly improve your chances of sorting the winners from the wrong people.
Next month we’ll look at Hiring Do’s, in Part 2 of Hiring Do’s and Don’ts.
Social media marketing is, or should be, a company function, and not a task undertaken by individual salespeople. Real estate agency profit consultant, Gary Pittard, says, “The pretence of social media is that it is a viable replacement for prospecting. It is not.” In this short leadership session, we discuss the folly of wasting too much time on social media at the expense of speaking with people by telephone or face-to-face.
Let’s give some thought to how we can make more sales despite the gloom and doom about the current state of the real estate market in many regions.
The market is your reality. As professionals, we must learn to thrive in all markets, whether booming, static, or down-turning. If you don’t like the reality of this market, ask yourself, “Can I change this?” MORE
You know the answer. So you only have two options: 1. Handle it; 2. Leave the industry.
Our beliefs determine our reality. If you believe you can make sales, you will make sales, provided you do the right actions.
Don’t listen to people who call it a ‘tough market’. Are sales being made in your area? If so, why aren’t you getting a share of those? Think: what must you do to make sales?
There are sellers in your area who want to sell or need to sell. Find them. Talk with them about pricing their properties so that they sell. The longer they wait in a falling market, the lower the price they will receive. Help them to get moving. Instil a sense of urgency into them. Believe that there are plenty of sellers like this just waiting for you to find them, and then go looking!
Have you heard any good news about the real estate market lately? Have you heard anything about the market that you didn’t already know? So why are you listening, reading or viewing this drivel?
The only purpose served by negative market news is to inform sellers so that they understand the importance of pricing their properties to sell quickly. Beyond that, this negativity will eat at your morale.
Turn off the news.
Have a plan. Take positive action and have a plan that will lead you to your goals.
You must know where your business will come from. Examine all the possible listing sources (for example For Sale By Owners – FSBO) and for each source ask yourself, “If I spoke to 50 [FSBOs], how many listings would I get?”
Your knowledge of your ratios is crucial, too. How many potential sellers do you need to speak with from each listing source to get one listing?
If you spoke to 40 people per day for 5 working days, for 20 days a month, that’s 800 people spoken to in the month. How many listings would that give you?
A lot more than you’d get if you didn’t speak to 800 people.
Positive action will give you a feeling of being in control. Try it.
Change Your Tactics
What worked in a boom doesn’t work in a down-turning market. Conversations with sellers in booms are different to conversations with sellers in down-turning markets.
The key to making sales when the market changes is to adapt.
A popular definition of insanity is repeating the same actions while expecting a different result. If what you’re doing now isn’t working, change tactics.
What book are you reading now? When was the last time you attended a sales seminar? What audio or video on sales have you viewed in the past month?
And I don’t mean YouTube and Ted Talks. Professionals use the ‘free stuff’ as a secondary training source, not their primary training source or their only training source.
YouTube and blogs like this are good for topping up knowledge and for getting you thinking, but they are not organised into cohesive training systems, such as Pittard’s Winning Ways – A Smarter Sales Career. Get more of the training you need, not ‘fast food’ snippets from blogs, short videos and podcasts.
In my book, Why Winners Win, I say that acquiring knowledge isn’t enough. We must practise what we learn in the field and keep practising until we get it right. In that way, knowledge turns into skill, and skill is what you need in challenging markets.
Knowledge + Practice = Skill
Add to this Competent Action and results are inevitable.
A swear word for some, but winners work – they work smart and hard. Prospect more – put yourself in front of more potential prospects. Business is out there. Believe it. Go looking for it!
A Better Alternative
In challenging markets, it can be easy to wallow in misery, to blame the market, or some external force that’s preventing you from making sales. That thinking and lack of action can send you broke. Even worse, it can drive you out of the industry feeling like a failure.
A better alternative is to take charge. You can’t control the market, but you can control YOU.
You can find sellers who want or need to sell. You can make sales. You can win.
This market could be the best thing that ever happened to you. It’s all a matter of perspective, and of attitude and action.