Happy New Year. If you’re just back from a break, I hope you’re refreshed and ready for a new year. A new year of results and profit.
Some real estate businesses did well throughout the pandemic (with the exception of certain state lockdowns). Previous and post lockdowns, trade results appeared to be healthy.
But some leaders complained that their salespeople treated COVID like a holiday. I suggested that the chance of these people succeeding in the long term are next to none. If you have people like this, it’s time to brush off those COVID cobwebs and get to work.
Begin your year with a team meeting. Review the plan that you completed at the end of 2020. The purpose of an annual planning meeting is to target your agency’s results for the following year. It is a key component to high profits.
If you did not hold a planning meeting with your team in December last year, you are strongly advised to hold one as soon as possible. It is not advisable to allow this to spill over into February.
You should ask yourself the following questions:
- Are they back from holidays and focused on the year ahead?
- Does everyone know what needs to be done?
- Do your people have clear goals for the year?
- Do they have clear targets and plans to achieve their targets?
You really need to know these things.
Sometimes people’s bodies come back from holidays, but their heads don’t. They can waste a week, or more, cranking up.
In the absence of clear goals, targets and plans that show the path to achieving them, your people will drift. They may obtain the odd result here and there, but lack any consistency. Not only can they waste the first week drifting, but wasting the first quarter is common.
I say, if we’re back to work, let’s work!
It’s time to brush off the COVID cobwebs and get to work.
Business has been good for many agents in 2020, despite the COVID-19 pandemic, but it’s not forecast to stay that way. Experts are forecasting difficult times in 2021 as the economic fallout of the pandemic bites.
Please don’t think that I’m trying to scare you, or talking the market down. On the contrary, I’m trying to prepare you.
Are you carrying any unnecessary baggage into 2021? If you are, it could weigh you down and hurt your profit.
The biggest danger you face in 2021 will not be recession or a down turning market. Your greatest challenge will be underperforming salespeople.
Mediocrity is a major cause of lost profit, but more so when the economy is in recession.
The cause of poor performance can be that a salesperson is poorly trained, doesn’t do enough of the right actions, has a bad attitude, or is resistant to change.
Another challenge is the ‘600-pound gorilla’ – the agency’s best performer who threatens to leave any time you try to make changes.
This person may be the highest performer in the agency, but that does not mean that their overall performance is impressive. Often the ‘gorilla’ is not a great salesperson, it’s just that their performance is better than everyone else on the team.
Have you ever fired somebody and had team members congratulate you for ridding the agency of this overbearing person? Then you just got rid of a gorilla.
You undoubtedly know the typical behaviours of the mediocre salesperson. Here are just a few:
- They complain that there isn’t enough being done to generate enquiry
- They discount their fees
- They blame the client – complain that clients are greedy, are bargain hunters, are stupid, or won’t reduce their prices
- They’d rather read a newspaper than prospect
- They teach new salespeople bad habits
- They claim every lead they can as their own, including those prospected by newer, more active salespeople – “They’re my clients, I sold them that property 10 years ago!”
Take these people into 2021 and you will struggle. You’ll be listing and selling just to cover their wages.
Even if they’re commission-only, they still cost you by taking up space a winner could occupy. And let’s not forget the massive amount of income they lose for the company because of their bad attitude, incompetence and inactivity.
Trim the fat. Do this sooner rather than later. As Mike Weinberg says, “Free them to succeed somewhere else”.
Take winners into 2021. Only winners. Drop the baggage of mediocrity.
“One size fits all” is said to be the biggest lie told in retail. And we all know it’s untrue.
It’s the same with leadership. One management style does not fit all. Leaders who manage all salespeople the same way risk losing their best performers.
Pittard has a complete business system for building a profitable real estate agency called the Agency Profit System®. The newest version was ready for release in early 2020, but due to COVID-19 we have been unable to present it live.
Essential Element 5 is Training & Coaching. It is an important element that all leaders must continually develop.
There are three stages to Training & Coaching.
Stage 1 – Rookie Stage – Micromanagement
A salesperson is a rookie from when they start until they achieve ‘Professional Level’ – $300,000 gross fee production annually.
To get a rookie off to a flying start, and to make them as productive as possible as soon as possible, a leader must work closely with them to the point of micromanagement.
- Daily one-on-one meetings with the leader
- Examination of actions completed each day, monitoring of actions, especially the number of prospecting calls and appointments set
- Monitoring mandatory study requirements
- Testing on material studied
- Practising listing presentation in preparation for presenting to clients in the field
Failure to work closely with a rookie almost certainly dooms them to mediocrity.
Stage 2 – Leadership Stage – Managing the Professional
Micromanagement ceases in Stage 2. Once the salesperson has achieved Professional Level, they are no longer a rookie.
Professionals can be trusted to do the right actions. In this stage the leader becomes more of a guide than a manager.
Guiding by the leader is more in the way of suggestions. For example, “Your listings seem to be low – what do you think may be the cause?” Or, “Are you happy with your prospecting levels, or do you think you need to up the numbers?”
If the salesperson achieves targets, the leader continues guiding. Should the results fall below target, the salesperson is said to be in a slump and micromanagement recommences until the salesperson gets back on track.
Stage 3 – Mentor Stage – The Success Partnership
When the salesperson achieves a Gold Badge in Pittard’s Winners Circle®, the salesperson’s Training & Coaching moves to the Mentor Stage.
In this stage, the leader offers advice when the winner asks for it. One-on-one time is less formal – perhaps in a coffee shop, or over lunch.
Guidance by the leader takes the form of, “Is there anything I can do to help you?”. The leader constantly asks the winner what can be done to give him or her more support.
It is important that all team members are shown care, support and respect, but many leaders think their high achievers are ‘set and forget’. This is a dangerous practice, one that may see the winner walk into the leader’s office and resign.
Feel the Love
High achievers must ‘feel the love’ from their leaders. The relationship becomes a success partnership. Many of our leaders have given their high achievers a stake in the business, or they partner their winners in property investments.
Our goal as leaders is to help our high achievers become rich, to invest some of their high income, to grow and prosper. This is how you keep winners and prevent them from being poached by competitors.
When you look at this this way, Training & Coaching takes on a whole new meaning, doesn’t it? One size certainly does not fit all!
It’s more than just running training meetings – it’s bringing out the best in your salespeople. And isn’t that the leader’s job?
Agency leaders often complain that they can’t find good people. This mindset can lead you to tolerate poor performers. And if you don’t believe you can find better people, you won’t try to replace them.
It’s true that before the COVID-19 pandemic, there was a lot of competition for the right people.
Smart leaders recruit nice people with little or no real estate experience, and then teach those salespeople how to sell real estate the right way. With proper training systems, that is more straightforward than you might think.
Smart leaders don’t use the recruiting system so typical in our industry – poach competitors’ salespeople. That’s a recipe for failure.
If a salesperson is doing so well where they are now, why would they want to leave and come to your agency? The experienced salespeople who are prepared to ‘jump ship’ are often the worst people you could hire.
But pre-pandemic, other industries were looking for the same type of people we were. We are looking for semi-skilled people who are well presented, well spoken, and who learn fast. Many industries seek people like this. The hiring pool was very shallow.
Well, the ‘pool’ just got deeper!
I do not make light of the hardship that the COVID-19 pandemic has caused for many people, but the pandemic has an upside:
There are now many good people looking for work.
Now is the time to recruit, to build a winning team – one that will help you navigate the rough waters that many economic forecasters are predicting for 2021.
There are many potential winners out there who are looking for a dynamic company led by a focused leader, who can train them, bring out their best and help them to achieve their goals.
To recruit effectively, you need a few things working for you – an attractive offer (hint: the typical industry reward systems do NOT attract winners), a proven recruitment program, training systems, induction programs, and a company that is well-led and a desirable place to work.
All these elements are under your control, even if you don’t have them now.
Pittard’s Agency Profit System® offers leaders a recruitment program that works. The average production of Pittard salespeople is three times the typical industry average. With results like these, who wouldn’t find space for more winners?
Winners are out there – now more than ever.
Are you ready to dive into the pool?
As leaders we’ve spent a large part of the year dealing with uncertainty, perhaps even dealing with our fears and with those of our team members and our clients.
So, where to from here? To a large degree, that’s up to you.
In the early days of the pandemic we took a mental battering. One leader told me that he felt he was ‘living in dog years’. Fortunately, that feeling passed, but for a while we were putting in some long days, and mentally challenging ones at that.
How is your thinking now? How are you feeling now?
Are you feeling optimistic with hope for the future? I hope you are. Because how you think and feel determines how you act. And your actions determine your success.
We’re heading into the last quarter of 2020. If you’ve followed my advice from previous articles, you’ve ramped up your office’s marketing and have your team prospecting.
And if you’re smart, you’ve got your team training. Now is not the time for incompetence.
I heard a few leaders say that having their salespeople on the JobKeeper allowance was like having them on paid leave. Really? Who tolerates people like that?
Time to dust off the cobwebs and get to work. There are people out there who want to sell, and there are people who want to buy. Let’s go and look for them and sign them up.
So far, you’ve brought your business through some harrowing times, but now is the time to set goals for your business and to put the focus back onto results.
Where to from here?
You decide. Up or down – you’re leading your business somewhere!
COVID-19 has certainly made business interesting, but many agencies are still reporting good sales results. Not all, I might add.
Prior to the pandemic, agencies were complaining of a shortage of listings. Those complaints died down as agency leaders had bigger priorities to focus on, but once things settled down the same complaint returned: “Listings are tight” is again the common cry.
It’s one thing for salespeople to use this excuse, but it endangers profit if leaders buy into any excuses.
Who’s making the excuses in your agency – your salespeople or you?
Every time I hear this complaint, I ask the same question: “What are you doing about it?“.
Here is what I’ve discovered.
- Agencies complaining of a low level of listings are those doing the least amount of marketing.
By marketing I don’t just mean social media posts.
I mean direct mail, leaflets, newsletters in print and digital. When you are low on stock, that’s the time to ramp up your marketing, not cut it down or out!
When an agency is already low on listings and then chooses to cut its marketing, that simple decision, to ‘save money’, loses money by throttling enquiry.
It’s not a smart management decision to become invisible in the marketplace. Ever.
- Agencies complaining of a low level of listings are those that do the least amount of prospecting.
This is another area where salespeople and leaders make excuses.
The problem with prospecting is that for many salespeople the results don’t happen quickly enough. They’d rather see the boss spend company money advertising and then sit and wait for enquiry.
Salespeople like that should be sitting and waiting in your competitors’ offices, not yours!
But even worse than salespeople making excuses is when leaders do.
I’ve heard leaders make excuses on their salespeople’s behalf – “Listings are hard to get now. I’m sure they’re making the calls“.
Whoa! Hold on there!
Ask yourself this question: are any sales being made in your area? Yes or no? And don’t say, “There are, but a lot less than three months ago“. Sales might be down in your AREA, but this is no reason why sales should be down in your AGENCY.
Why didn’t you get those listings? Why are you not speaking with those sellers who will soon list with a competitor if you don’t get to them first?
When you make excuses, you stop looking for solutions.
Don’t accept excuses from your salespeople, and never make excuses yourself.
You’re the leader. Lead!
There is an old saying which says, “If you want to be successful, just do the opposite to what the majority is doing”. My experience has been that this is often correct. Following the crowd can be unprofitable.
There is much business uncertainty surrounding the COVID-19 outbreak. This follows on from a prolonged drought, an unprecedented bushfire season and then floods in some areas. It would be an understatement to say that business confidence is low. If you doubt that, just look at the share market.
It is understandable that many real estate principals will feel the urge to hunker down, lowering expenses wherever possible. This is a smart move… TO A CERTAIN EXTENT.
You may be feeling the urge to hold off on recruiting new salespeople, and while this sounds reasonable in uncertain times, it could be the worst approach you can take. There are times when you should say ‘Yes’ when others are saying ‘No’.
Ask yourself, “Is there room on my team for GOOD salespeople?”.
The answer to this question should always be “YES!”.
If you agree with this, then active recruitment is the only way to find good salespeople. And this is the time to do it – at a time when everybody else is not recruiting.
Government restrictions permitting, in October Pittard releases its NEW Agency Profit System. This is a complete business system for building a profitable real estate business. It covers everything you need to know to make your real estate agency profitable – Culture, Financial Foundations, Cockpit instruments for measuring performance, Training & Coaching, Leading & Managing, Agency Profile & Listing Flow, and Recruitment.
We’ve been testing our new recruitment system for the past eight months, throughout these challenging times. Here are the results:
Out of 8 salespeople hired, 7 are producing solid results.
Seven winners from 8 hires – that’s an outstanding result.
It’s not the market that determines whether you will succeed in building a winning team, it’s the quality of your recruitment systems and your ability to lead.
To quote my friend, Dave Anderson, “You cannot shrink your way to Greatness”.
If you want to cut expenses, remove salespeople from your team who will not do the actions necessary to succeed. Those who won’t train, won’t prospect and thereby are not getting results. This will save you money and a lot of wasted energy.
Replace those people with enthusiastic new salespeople, recruited the right way.
Say ‘Yes’ when everybody else is saying ‘No’. Treat your competitors’ fear as an opportunity to grow your business and to dominate your service area.
And do phone me on +61 2 8217 8500 if you want help.
I couldn’t begin to estimate how many times real estate agency leaders have commented about another team saying something along the lines of, “She is lucky – she’s got a great team”.
It’s almost as though they think that all you need do is stick your head out the window and whistle, and winners will come running. You don’t whistle for winners, and luck has nothing to do with building a winning team.
The first step to building a great team is to commit to doing so. It requires hard work over several years to develop a team of peak performers.
After commitment come systems. Your recruitment program must be systemised, methodical, and stringent.
It’s crucial you get this right. You can lose a lot of money very quickly by paying salaries to salespeople who don’t make it. Your recruitment process must help you identify likely winners and reduce the risk of hiring those who won’t make it.
And if you think that commission-only is the best option, let me ask you one question: “How has this worked for you so far?”
Attracting commission-only people is no easy task. Unless they are competent, write great figures (most don’t), and are paid a fair split on the commission – a split that allows you to cover expenses and still make a profit – you will lose money on them, too.
If you want to build a winning team, don’t think hiring, think RECRUITMENT.
The Business Dictionary defines hiring as:
The act of giving someone a job; an employer taking on a new employee.
Building a team of competent winners requires more than that.
Here’s the definition of Recruitment:
The process of finding and hiring the best-qualified candidate for a job, from within or outside the organisation, in a timely and cost-effective manner. It includes analysing the requirements of a job, attracting candidates to that job, screening and selecting applicants, hiring, and integrating the new employee to the organisation.
Recruitment is a systemised process that weeds out unsuitable applicants and assists in selecting those who are most likely to make it.
Here are the elements of a successful recruitment system for real estate salespeople:
- Attraction – you need to fill your recruitment pipeline with candidates looking for a career in Sales. There is far more to this than just advertising on Seek.
- Sorting systems – you need systems to help you sort those who won’t succeed from those who possibly could. Nothing is definite but sorting systems will help you identify the best candidates.
- Pre-start testing – don’t leave it to ‘gut instinct’ – test candidates to see if they have the temperament and aptitude for Sales.
- Selection systems – you must be decisive and offer employment once your systems identify a potential winner. Winners won’t wait for procrastinating leaders.
- Induction systems – bring recruits onboard with clear guidelines on what you expect from them in actions, study, and responsibilities.
- Ongoing training and coaching – after inducting your recruit properly, training and coaching is an ongoing responsibility for all leaders. Neglect this and your promising recruit will likely become a mediocre experienced salesperson. And our industry has too many of those!
If you are too busy selling real estate, you will ignore recruiting, recruiting systems, and leading the team. This is sure way to build a mediocre team, if indeed you build a team at all.
Would you take on a seller and not nurture that relationship, consciously moving the listing toward a sale?
Then why would you take on a recruit and not nurture that person, working him or her toward greatness?
You don’t whistle for winners. But they are out there, waiting for you to attract them.
Leaders often think that the cost of having an incompetent salesperson on the team is the wage paid to that person. But there is a lot more to lose. The salary is just the beginning.
Let’s say you pay $50,000. In Australia you add 9.5% superannuation so now you’re at $54,750. For this exercise we’ll ignore payroll tax and other on-costs.
Business lost through incompetence
Now let’s look at loss through incompetence. Is it reasonable to expect that an incompetent salesperson will lose 1 listing a month? That’s conservatively 6 sales lost per year. At an average selling fee of $15,000, that’s $90,000 per year. Add that to the lost salary and now your losses are $144,750.
In 1993, the average production of a salesperson was $135,000. In 2019, despite a recent boom, there was no evidence that it was much higher. It’s fair to say that incompetence is alive and well!
It is easy to dismiss these losses because you never see the money. Only the salary is money that you had, and then paid to your incompetent salesperson. You never had any of the other money, hence the tendency to not take it into account.
But you’d better believe that this is real money, even if you didn’t get it.
Imagine I walked into your office with a briefcase containing $145,000. I tell you that this money is all yours at the end of the year, BUT I will be deducting the equivalent of one selling fee every time I detect business lost through incompetence by one of your salespeople.
A salesperson walks into the office after two hours on a listing appointment. “Did you get it?” you ask? He replies, “No, but I’ve got a good relationship with them. If they list with anybody, they will list with me”.
And right then, I reach into your briefcase and remove $15,000. Would you believe then that incompetence is costing you real money?
This is the point – money you had, but lost, always hurts more than money you missed out on, but never saw. It’s the same money, and it buys the same things, IF you can get it.
Four incompetent salespeople can easily cost an agency $600,000 in expenses and lost income. Do you want some of this for yourself?
Then train your people. Make incompetence a thing of the past in your agency.
Struggling salespeople – we’ve all had them. They can be frustrating, and they can cost your company a lot of money. So how do you know whether to persist with them or fire them?
In 25 years as a real estate agency profit consultant, I have seen entire teams of strugglers who fail to reach an acceptable performance.
Why do leaders keep such people? Some leaders wrongly believe that inconsistent or poor performance is just the way it is in Sales. But I can show you many Pittard clients who have incredible teams of happy, peak performers.
You can have this too, with some systems, leadership and determination. Poor performance is not a fate accompli. You can – indeed you must – do something about it.
The key to dealing with strugglers is to know which ones you have a chance of turning around. There are only two types of salespeople: the right people and the wrong people.
Identifying the right and the wrong people is easy.
The right people:
- Have a good attitude
- Are willing to train
- Are willing to do the hard actions
- Work hard
The wrong people are the opposite. These must go. You will never turn these people around, so don’t waste your time trying.
Four steps to turn around struggling salespeople
When you have identified the right people and removed the wrong people, it’s time to begin the turnaround.
First, get your struggler to train hard. Help them set a study program designed to improve their areas of weakness.
If they have difficulty listing, work on their listing presentation. If they have trouble coming to the point, drill them on succinct communication.
Second, test their knowledge. There is no point increasing their level of actions (step three) if they can’t do them competently. Constantly test them on what they’ve learnt.
Are you seeing improvement? If not, they either aren’t studying, or they aren’t absorbing. Either way, you have gone as far as you can go with this person and it’s time to terminate their services.
As their knowledge improves, so will their results, but this is only half the battle. You must increase their actions. This is Step Three.
Get them working hard on the right actions. Work with them to formulate a plan. Get their commitment to follow the plan.
All salespeople, but especially rookies and strugglers, must have a plan and must follow it. They must know where their business will come from, particularly where they will find their listings. How many people do they need to speak with to get one listing?
Some listing sources produce better results than others. You could make 150 cold telephone calls to get a listing, or if you prospect on a busy road, you might get one listing for 70 calls. Help your strugglers identify the warmest listing sources and have them work those sources.
Fourthly, monitor their actions. Are they following the plan? If so, persist with them. If not, terminate. Never pay wages to people who will not do what they said they would do.
Turning strugglers isn’t a complicated process, but it does require the leader to act. Don’t accept poor performance as ‘just the way it is’.
If I can be of assistance, please do let me know.
To maximise profit, two of the leader’s most important roles are Talent Scout and Coach.
In my 25 years as a real estate agency profit consultant, one of the greatest ‘sins’ I’ve seen leaders commit is holding onto the wrong people for too long – often despite their better judgment.
When an underperforming team member leaves, or is eventually fired, I’ve lost count of how many times the leader has said, “I should have done this long ago”.
An Arabian proverb says, “When the horse you are riding dies, get off!” If you believe you have the wrong person on your team, you should heed this advice.
The easiest way to detect whether a poor performing salesperson has any hope of reversing this trend is to ignore their words and look at their actions.
- Give them a book and ask them to read it, or ask them to listen to an audio program. If they don’t, that is enough reason to terminate their services. They are unteachable.
- Ask them to commit to a high level of prospecting – 40 a day for a month. If they refuse, or if they say they’ll do it, but don’t, that’s enough reason to terminate their services. They are afraid to prospect.
Some people are not teachable. Some will not do the actions required by their job descriptions. Keeping these people on your team will lose you the respect of the good people. If you can’t turn these people around, it’s time to put your energy into finding the right people. It’s time to put on your ‘Talent Scout’ hat.
One reason leaders persist with wrong people is because they don’t have anybody to replace them. That’s why good leaders are constantly looking for winners, the right people to join the team.
Once they find good people, they induct them into the company the right way, with induction systems designed to train the person and get him or her productive almost immediately. Culture and action are taught, and standards set. Ongoing monitoring is implemented. All team members know that they are accountable for the actions they are expected to complete.
The leader then moves into the role of coach, working with the team to bring out the best in each person.
These leaders always remain on the lookout for prospective winners. In the best offices, there is always room for a winner but there is no room for a mediocre person with a poor attitude.
I am not suggesting ‘Churn and Burn’, which some ruthless leaders are known for. I do suggest, however, that you quickly part company with people who will not meet your standards of culture, training, presentation and activity, and find salespeople who will.
Many leaders do not have hiring problems; they have firing problems. And because of this, their teams contain people who have little hope of success.
Be a talent scout and coach. Then tell me if your profits don’t soar!
When the market turns down many agency leaders wisely cut expenses. But there is a right way and a wrong way to do this. Cut the wrong expenses and you will quickly lose profit.
Some expenses can be cut without affecting your income. We call these ‘fat’ expenses. Things like publications you don’t read. Stop expenses like this and you will be more profitable.
Other expenses are ‘muscle’ expenses. Cut these and you will lower your income. Marketing is one such expense. Downturn or not, cut down on marketing and you will miss out on listings and new managements. Marketing is a classic muscle expense.
The best offices Pittard® works with are ‘marketing machines’. You can set your watch by the precision of their marketing. They are little marketing factories.
There are three ways to market your business and, as the leader, it is ultimately your job to ensure that marketing in these three areas is a regular occurrence.
Print covers leaflets and direct mail. The best offices regularly cover their service area with leaflets (preferably delivered under doors and not into letterboxes) and direct mail – letters hand-delivered by walkers. (Post is too expensive). Direct mail is personally addressed, with as few generic greetings as possible.
Blanket your service area with some form of print media every month.
Digital marketing is email, SMS and social media marketing.
The best offices regularly hit their clients’ email inboxes, phones and social media channels with good information that their clients will want to read. Home Alerts with new listings are always of interest to buyers. Current market information interests property owners, investors and buyers.
This is face-to-face or voice-to-voice marketing.
The best offices stay in touch with clients and potential clients by phone or door prospecting, and regularly follow up all leads.
Follow your own advice
How often have agents told sellers at listing presentations, “You can’t afford to keep your property a secret”?
We should follow our own advice. Our agency shouldn’t be a secret either.
Profitable offices don’t keep themselves a secret. They market constantly.
Always be sending out good messages to your client base. Make your office a marketing machine.
You can starve waiting for word-of-mouth to bring you sufficient business to achieve your profit goals.
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.