You may have read about the highly publicised court case in South Australia where Harris Real Estate and agent Arabella Hooper were ordered by the court to pay $750,000 in damages. The judgment cited that after leaving Toop & Toop for Harris Real Estate, Hooper used data to develop business using data taken from her former employer.
It’s refreshing to see that the courts are now taking data theft seriously, but if you find yourself overly concerned with this, ask yourself, is data theft a disease, or is it merely a symptom? MORE
Sure, data theft is serious, but there could be some underlying issue that is more serious.
To illustrate, think about this environment:
Many years ago, I visited an agency and noticed a dot matrix printer (I said this is was many years ago!) that periodically burst into life and printed a quick line then stopped. A few minutes later it did the same thing. It did this for the entire time I was at this office. I asked the leader what this printer was doing. I was told that it recorded every outgoing call, “So we can check on who the staff is calling”.
This air of suspicion pervaded the whole agency. Later, I conducted a sales meeting with the team and asked a salesperson, “What do you have cooking?” I was asking him about the sales he was working on. He replied, “I’m not telling you!” When I questioned him further, he said he didn’t want “the others” (not colleagues!) to know what he was working on.
Suspicious leaders, suspicious team. The culture of distrust thrived in this agency and the culture was determined by the agency leadership.
Now let me ask you a question: would you be surprised if any person from this team left and stole data?
For some leaders, data theft is not a concern. They are careful with the selection, induction, training and monitoring of their salespeople. They jump on unacceptable behaviour as soon it’s detected, never allowing bad behaviour to become permanently embedded into their agencies’ culture.
I believe that data theft is a symptom of a poor culture.
Data theft should not be as big a concern for leaders as poor culture.
Agencies that have an ‘us versus them’ mentality, who have salespeople who gang up on the leader, who refuse to do the right actions or who leave and steal data, didn’t suddenly become that way – they were part of a culture that allowed this behaviour to flourish.
Don’t let that environment become your environment.Gary Pittard
Pittard clients are spread across Australia, New Zealand and South East Asia. It stands to reason that they are operating in different markets. Some are in booming markets, some in static markets and some in down-trending markets. But no matter what market they find themselves in, we give all the same advice:
It’s not the market that determines your success, it’s YOU. MORE
It is too easy to blame the market. Seriously, have you got any business problems that a massive increase in listings and sales wouldn’t fix? So why don’t you go and look for listings? I’m sure you agree that this would be a good start.
But not all would agree and, if you are one of those people, I hope to change your mind.
In EVERY market, Listing Flow is ALWAYS the essential focus.
This is a no-brainer in booming markets. When you sell everything you list, it’s easy to understand why everybody on the sales team, and agency management, must make getting listings a priority.
However, in down turning markets, when sales are harder to come by, it’s easy to make sales the focus. I hear many leaders and salespeople say, “I’ve got plenty of listings, it’s buyers we need!” While it might be understandable thinking, taking the focus off listings and putting it onto buyers is a dangerous focus.
For all agencies, always, the essential focus for all leaders and team members should be Listing Flow. You can’t sell what you haven’t got listed.
For those who think they need buyers, there is one simple question: If all your listing were half price, would you have plenty of buyers? If the answer is ‘Yes, of course’, then if you are not making sales, your stock is overpriced.
Now for the “But Gary…”. “But the vendors won’t reduce”. Here we get to the root of the problem: sellers who are holding out for prices they are not going to get in this current market. I put it to you that these are not sellers – their listings are a waste of your time.
Think about all the listings you have that are overpriced with owners that won’t budge. Take those listings off your books and ask yourself, “Now, do you have plenty of listings?” I’ll bet you are now low on stock.
Stubborn sellers chew up a lot of time for no result. Instead of thinking that you have listings, change your thinking:
Do you have plenty of SALEABLE LISTINGS?
This should be your goal for your agency – plenty of saleable listings. Properties where the owners trust you, who want to sell, and will list at fair market prices to do so.
Instead of allowing your team to waste time on listings that aren’t going to sell, wouldn’t it be better to have the team spend that time prospecting, looking for more reasonable sellers, those who are serious about selling?
Without leadership direction, salespeople will chase sales at the expense of listings, or waste large amounts of time on sellers who aren’t going to sell. Take a stand – put the owners of your listings under the microscope and ‘fire’ those who won’t follow advice and price to market.
Then, get the team prospecting. Send out plenty of office marketing. Chase stock, get that stock to fair market prices, and sales will happen.
Listing flow is an essential focus. In every market!
It doesn’t take a genius to figure out when a salesperson is in a performance slump, although many leaders don’t appear to notice until the salesperson has been in the slump for too long – sometimes months.
In aviation, pilots have a saying, “Stay ahead of your aircraft”. There have been many pilots involved in serious accidents or killed because they were flying aircraft that were too fast for their skill. Flying fast aircraft requires thinking ahead especially when landing. Pilots must slow fast aircraft sooner, washing off speed early so that they don’t approach the airstrip too quickly. MORE
We could extend this thinking to real estate agencies – “Stay ahead of your business” and operate proactively, not reactively.
The art form that leaders must master is to recognise behaviour in salespeople that will lead to a slump. Correct the behaviour before the slump and you stop the slump.
A knowledge of each member’s numbers and ratios will help leaders to recognise which salespeople are heading for a slump.
Leaders must know their salespeople’s numbers and ratios in these key areas. These figures are calculated weekly, monthly and quarterly:
* Each sale has two Sides, the listing Side and the sales Side. One Side is awarded to the listing salesperson and one to the selling salesperson, when the contract has become unconditional. Salespeople who sell their own listings are awarded two Sides. Sides recognise the company’s good listers. If somebody has a low sales result but a high Sides result, their listings are selling.
Leaders often complain that they cannot get their salespeople to do the right actions, yet many of those leaders fail to measure the actions their salespeople are or are not, doing, and do not calculate their salespeople’s individual ratios. And so, slumps come as a complete surprise.
A major function of leadership is to look ahead, to anticipate.Ratios and numbers give leaders a glimpse of the future. If prospecting numbers are down, it’s only a matter of time before listing results fall and, eventually, sales and fees. It’s simple numbers.
Getting salespeople to count their actions is an ongoing battle that leaders must not shirk. Do you know your agency’s numbers and ratios? Are you regularly getting a glimpse of the future?
If you want to get your new sales recruits off to a flying start, first teach them the essential actions – those necessary to succeed – and then help them formulate a plan loaded with those essential actions. Then follow up and ensure they are being done.
Essential actions are non-negotiable. Do the actions, or leave. Never allow your salesperson to negotiate the actions downwards. MORE
This is exactly what happened with one of our leaders recently. She believed her recruit showed promise. But I wondered if he was just making the ‘right noises’. Until you see the essential actions being performed regularly, you can’t say the recruit is showing promise.
The leader had taken shortcuts with the recruit’s induction. I advised going back to square one, beginning with six essential actions to be carried out in the coming six weeks.
Those actions were:
You might think those actions are tough. Paying for mediocrity is tougher.
But the leader compromised, allowing the recruit to fall short of the prospecting numbers. The highest he got was 68 prospecting calls in one day.
The recruit told the leader it was too hard. He wanted to go into Sales where he ‘guaranteed’ that he would do well.
I told this recruit and the leader that under no circumstances should he be trusted with live leads. If he quit making calls because it was too hard, he would do the same at listing presentations, when the client told him that his fee was too high. He’d lower the fee immediately.
My reasoning? If you fold once when the going is tough, you’ll fold again and again.
This guy didn’t have what it took to be a salesperson, yet. Perhaps further down the track, but not today.
His leader was worried about being on her own. This was the only person coming onto her sales team. I told her this: Financially and for peace of mind…
No people is better than the wrong people.
The moment you compromise on the essential action with your salespeople, you doom them to failure.
You need to answer both questions if you want to build a great team.
Take a minute and look around your agency. Everybody looks busy, don’t they? But are you making money? Are they making money? If you’re not careful, you may mistake busyness with production. Remember – not all activity is created equal!
In all jobs, including yours, there are only two types of activity:
ACTIVITIES THAT LEAD TO RESULTS AND ACTIVITIES THAT DON’T. MORE
Leaders must be vigilant to ensure that time is devoted to productive activity. The art is to do so without micromanaging.
Activity designed to make people look busy is what we call PTBB – Pretending To Be Busy. To limit PTBB activities, leaders must ask questions like “What are you working on right now?”
If the question is met with a pause, or an “Um”, you have probably just caught out a PTBB. When you identify that a person is working on a PTBB activity, give them a productive task to do immediately, like prospecting.
Whether it’s your receptionist, a secretary, a BDM, a property manager or a salesperson, there are activities that will lead you closer to results, those that are routine, and those that waste time.
Results-linked activities are priority number one. Get these done first. Routine is second on the queue, but never at the expense of doing a results-linked activity.
Waste-of-time activities should not be done by anyone!
Often our offices are called ‘work’ – “I’m going to work” is a statement people use to describe where they are going – the office – but ‘work’ in this context is not a noun – it’s a verb. You don’t GO to work, you DO work.
Activities that waste time are not work. They are an indulgence that comes from unclear job descriptions and a warped sense of priority. Leaders, we must look out for such activities and stamp them out. We must get our people focused on results-producing actions.
That is, if we want to make a good profit.
In my experience as a real estate agency profit consultant, I’ve seen many real estate businesses in grave financial trouble, and many spend themselves into oblivion. For businesses to survive and thrive, they must be built on solid financial foundations.
This is explained in depth in our four-day presentation of the Agency Profit System®, but here are some important foundations that all leaders should strive to have in place. MORE
Individuals and households that spend all they earn are just one pay-day from bankruptcy. Businesses are no different. If you aren’t saving, you have no buffer for lean months.
Expenses under control
One office spent $112,000 in a single month on premium advertising. That’s what we call “Double-D” – Dumb and Dangerous. This money was spent because the agency’s salespeople did not know how to list properties without committing the agency to massive advertising spending. If you think the agency recouped the expense through Vendor Paid Advertising, you’d be wrong.
If a fraction of that 529 plans money was spent on training the team, they would list properties without the requirement for massive advertising or fee discounting. This agency’s expenses were out of control – but they are not alone.
Borrowing to buy investments is perfectly fine, provided you don’t extend yourself too far. I personally do not feel comfortable with more than 30% debt-to-equity, excluding the family home.
‘Dumb Debt’ is the worst debt. Dumb Debt is borrowing to buy anything that goes down in value – car leases, equipment leases, credit card spending where the debt is not paid out at the end of each month. Spend too much on Dumb Debt and saving will suffer.
Family home fully paid
When you go to bed, owning the roof under which you sleep is an essential goal. Pay out your home, and don’t use it as a gambling chip by securing it against business spending.
The sooner you start investing, the sooner you become wealthy. Save and invest in quality real estate and blue chip shares.
Businesses haemorrhage huge amounts through team incompetence. Every time salespeople lose listings to the opposition, it costs the agency dearly. It would be the biggest financial loss in most real estate offices, in addition to the damage caused to the company’s reputation by having incompetent representatives (head to Goodwin Barrett to find out more).
Training is a bargain by comparison to losses through incompetence of the team and the leader.
Income is not profit. If you want to maximise your profit, you need to take your focus off turnover and put it onto profit. You need profit systems to ensure that this happens. This is why so many agency leaders use Pittard’s Agency Profit System®: profit does not happen without systems!
Profit is not a dirty word!
Buildings without solid foundations crack over time. The same is true for businesses. Profit is not a dirty word. There is nothing wrong with making a profit, provided you do so honestly.
In fact, if you are a business owner, it’s your duty. Why else did you go into business?
Of all sayings, I despise this the most: “If it ain’t broke, don’t fix it”.
I have heard people use this phrase as justification for not training, not leading, not prospecting, not developing a team, as justification for leaving things exactly as they are.
To illustrate how stupid and dangerous this is, let’s apply it to your car. Would you drive your car, kilometre after kilometre, never adding oil, checking the tyre pressure or having it serviced? Would you just drive it into the ground?
Why not? “If it ain’t broke, don’t fix it!”
Treat a car this way and soon it will be ‘broke’ and you will need to fix it. A hefty repair bill will follow.
Imagine if you did this to your business!
Sad news: MANY LEADERS DO!
Leaders who don’t study leadership or work at developing their teams, who fail to determine a culture and set standards, fail to control expenses, fail to keep a watchful eye on profit, who lack discipline, are leading their companies downwards.
There is no marking time. You can’t stay exactly where you are.
You’re either going backwards or forwards, and it’s up to you, the leader, to decide in which direction you will take your company.
Great leaders constantly fine-tune their company and their team for peak performance. Leaders who fail to do this are attempting to mark time, not realising that they are, in fact, going backwards.
A leader who thinks, “If it ain’t broke, don’t fix it” may have a business that is doing fine now, but it’s only a matter of time before the business will be ‘broke’ and the leader in damage control – and probably broke too.
Ditch the loser saying and replace it with this one:
“If it ain’t broke, build on it!”
In the eighties, management expert Michael Gerber coined a phrase that became popular across the world: “Work on your business, not in your business”. A lot of us were very excited to hear that.
I still am. However, I saw a few people send their business bankrupt and then blame Gerber’s maxim. Let me make it clear: it wasn’t Gerber’s fault. His ideas were sound then and now. What these leaders overlooked was the word “Work”. WORK on your business… MORE
Over the ensuing decades, I saw some leaders turn their back on their business by appointing an ineffective manager who ran the business into the ground.
And the “Work” that was supposed to happen? It didn’t happen either. The systems urged by Gerber failed to materialise.
Another of Michael Gerber’s maxims was:
“Systems run the business. People run the systems.”
This is what these leaders were supposed to do: find or design profit systems for their businesses. Without profit systems, a business is highly susceptible to the winds of change, especially the market.
Some businesses generated large sums, often from income generated by the leader, but turnover and profit are different things.
These are some of many systems a real estate agency needs to maximise profit.
Big profit requires comprehensive profit systems.
How would you rate your profit systems?
In my work as a real estate agency profit consultant, I have heard all the excuses. It’s twenty years since I heard a new one. The complaints remain the same. The same conversations we had in the nineties are still around this century.
One of the top complaints is from leaders: “I can’t get salespeople to focus!” Two others are “It’s different in my area” and “I can’t get my people to prospect”. MORE
Getting salespeople to focus is a topic all on its own. To get salespeople to focus there are seven major actions that leaders must tackle with each team member, in one-on-one meetings. If you would like to learn more about how to do this, contact us for the next screening date of the webcast Prospecting: how to get salespeople to FOCUS.
But what do you do when salespeople won’t do the actions?
In profitable agencies, leaders hold their salespeople accountable for actions.
These leaders set action expectations with their team members, and then record and monitor those actions with a Weekly Call Report.
The Weekly Call Report measures the level of actions for each salesperson in a number of areas, including:
When leaders gather statistics and interpret them, it becomes very clear who is doing the actions becomes very clear. Remove the uncertainty around the numbers – count actions and hold your people accountable for them.
While monitoring actions and determining ratios are important, there is one big question leaders should always consider:
What are the consequences in your agency when people do not do the actions?
The consequence of doing the actions is results. The consequence of a lack of action is mediocrity. But is that the only consequence? It shouldn’t be.
Great leaders never tolerate mediocrity. They train their people and set action expectations. If those actions are not performed, they counsel the salesperson and retrain if necessary.
After that, however: no more chances. The consequence for inaction, then, is dismissal. This is fair enough. If they won’t do the actions, what are they doing there?
I love the saying, “If you can’t change your people, change your people“. If you have “Won’t Do’s” on your team, and they won’t change their ways, PART WAYS.
Invest your time, energy and money into the right people. Profit will be your reward.
Multi-tasking is a myth.
While performing two straightforward chores at the same time is easy – you can stir the custard while talking on the phone – it is folly to think that this transfers to complex tasks. The law forbidding texting while driving is for good reason – you cannot safely do both at the same time. Likewise, you cannot perform other complex tasks simultaneously. MORE
One ‘deadly combo’ of tasks that should never be performed together is selling and leading – trying to lead a team while being heavily engaged in listing and selling. When you are selling, you are NOT leading.
If you own a real estate business, and are a principal who sells, you should examine your reasons for doing so.
Do you sell because you need to bring money into the business? If so, why?
While I understand that you need to sell to keep the doors open, unless you address the reasons why you must sell, you will always be a slave to your business. Your business needs leadership, urgently!
Do you prefer selling over leadership?
If so, why have you got a real estate office? Leadership and Sales are different skills. If you are working hard as a salesperson and not making much profit, sell the business and work for somebody else.
Do you think you can do both?
Perhaps you can, and there’s an easy way to find out:
Examine your previous year’s income. Subtract the income from the Property Management Department and income generated by you. How much is left? What is the profit, or loss, on that income?
If the profit is low (under $200,000), or if there is a loss, clearly you cannot lead and sell. Your business needs leadership!
I don’t mean to offend you by making these statements, but too often agency leaders measure their success by how long they have been in business. This means nothing!
Measure your success by the PROFIT you make, profit generated by your Property Management Department and by your Sales Department, MINUS any fees generated by you. Your profit should exceed $400,000 per annum without you needing to list and sell.
If you’re not making this profit, there is room for improvement, and certainly for more leadership.
And if you want a hand to figure out a way forward, please let me know.
Many people who open real estate agencies expect it to be easier than it eventually turns out to be. Many suffer from the Field of Dreams thinking, “If you build it, they will come”. That doesn’t happen very often.
It does not take long for agency owners to realise that Get Rich Quick is not a plan. Most times, business is a hard slog, which can be made harder by a lack of planning and a lack of training. MORE
In almost three decades as a real estate agency profit consultant™, I have seen few agencies that have a business plan. While get rich quick is not a plan, neither is it smart to have no plan at all – at least if you want to become financially independent through your business!
If by now you have realised that get rich quick is not a plan, and if you do not have a business plan at all, may I ask, are you happy with the profits you make from your residential sales department?
Now, take out your own PERSONAL PRODUCTION. Are you still happy?
If you are not happy, this means that your sales department would not be profitable without your own personal production. While you are in this state, you do not have a business, you have a job – essentially, as a salesperson in your own company.
Consider doing something different. Formulate a business plan – take control of the direction of your business.
And if you need a hand with a good plan, please do contact me.
As leaders, we should be the ones setting the standards in our businesses. One standard that should be compulsory is Excellence. Is Excellence compulsory in your agency?
There is an old saying, “Anything worth doing is worth doing well”. No doubt you have heard this gem. I agree with it wholeheartedly.
If we are going to do anything, shouldn’t we do it well? Personally, I’d rather be known for quality than mediocrity, or carelessness. I am sure you feel the same way. I have great difficulty understanding why anybody would want their name applied to anything less than excellent. MORE
I don’t claim to be the best at everything I do, but I like to think that in everything I do, I give my best. Ask me to do something, and I’ll do my best to deliver something that meets or exceeds your expectations. I regard this as an obligation – if I say I’ll do something for you, as a matter of pride and courtesy, I’m going to give you my best.
Show the way
Leaders must show the way. Whenever we commit to our teams to do something, we give it our best effort. Quality work is a fine example for leaders to set for their team members.
And when we do it, we have every right to expect the same from our team members. We do it, so they must too:
These are just examples, but you get the idea. In business, giving less than your best is a sure path to low profit. Allowing mediocre people to fester on your team sets a bad example to those team members who look to you to set and enforce standards.
Excellence is a standard that no business can afford to do without. Are you serious about building a great business? If you are, you will become the best leader you can become. And you’ll send this message to your entire team:
Be excellent or be gone!