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The High Price of Business Lost to the Competition

“Mediocrity requires a big cheque book.”

Gary Pittard

The quality of a sales team should be the main priority for all agency leaders. Allow incompetence to fester in your sales team and the losses can be huge.

Many agency leaders express concern over their present teams. Leaders say that they wish their salespeople would prospect more, were better closers, would lose fewer listings to the competition. These skill and activity deficiencies are the primary reasons why business is lost to the competition, and the price is not just a lost sale, but a massive loss of income and profit.

If you don’t believe me, calculate the cost yourself. Is it reasonable to believe that a salesperson can lose one listing a month to the competition? Let’s say the number is 10 listings per year. At a list-to-sell ratio of 70%, that’s seven sales lost by this salesperson. Multiply seven sales by your gross average fee – let’s say $10,000 – and this salesperson has lost $70,000 in fees to the competition.

It gets worse,  if you have four salespeople who each lose 7 sales to the competition, that’s $280,000 in fees your agency didn’t receive. That would pay for a lot of training. That’s why I say mediocrity needs a big cheque book!

So, what can you do about it?

  • The first thing you can do is train your team. Training should be regular and high quality. A one-hour training meeting once per week, a three-day sales seminar once a year, and regular testing to ensure that the knowledge is being retained can sharpen up your team.

Nobody should be exempt from training. Everybody trains. Allow any team member to show a disdain for training and you send a message that training is not important. Training is important, and in the best offices, it’s compulsory.

  • Actions expectations are the second thing that leaders can address. Every day, salespeople must be involved in activities that generate business. For example, if you allow salespeople to avoid prospecting, this will cause your agency to slide into mediocrity.
  • The third thing leaders can do to improve the quality of their teams is to remove those who will not train, and/or who will not do the actions necessary to get the results the leader expects from each salesperson.

Retain mediocre salespeople and your entire team will become mediocre over time.

Why do leaders keep the wrong people on their teams? The answer is that they have nobody to replace those who leave or who are terminated.

Recruiting is the answer to that challenge. Agencies must have a proven recruitment system that guarantees a flow of new talent into the agency. Every team can benefit from some ‘fresh blood’ and the enthusiasm that comes with a new salesperson.

But a word of warning: recruit without a system for finding, training and inducting new salespeople and you set yourself, and the recruits, up for almost certain failure.

Think about it: how much better would your agency’s results, and profit, be if you had a team of highly trained and active salespeople?

It doesn’t happen by accident – it happens through focused leadership. Focused on training and developing good people, removing the wrong ones, and recruitment of new people who will train, and who will do the right actions.

Do this, or lose business to the competition, and pay a high price for doing so. It’s your choice.

If you doubt it can be done, let me introduce you to plenty of city and regional leaders who ARE doing it.

Gary Pittard

Same Same, But Not Different

No doubt you’ve heard of the saying, ‘Same same, but different’, but sadly this does not often apply in real estate. Most agencies are same, same, but not different.

If you’ve seen one real estate salesperson, you’ve often seen them all – they say similar things to win business. They recommend similar methods of sale. They push for expensive marketing campaigns. They offer similar advertising options. And, if you’ve seen one auction, you’ve seen them all – again, there is no point of difference.

A lack of points of difference presents a major challenge to agencies and salespeople.

When sellers interview three agents and they all look and sound the same, sellers will often choose the agent who quotes the highest price or charges the least. They will push for big discounts on the fees and advertising charges.

Many agents are all flash and no substance. We call these ’empty suits’. They talk a good game, particularly about their negotiation ability but ask any one of them when they last read a book on negotiation and you’ll hear crickets. This alleged negotiation ability shows itself as a baseless claim when they discount their fee to win the business.

Hiding behind flashy appearance and marketing, and baseless claims, will only get you so far. If a better competitor comes along, your agency and salespeople will have real competition.

Or, if an agency decides to spend more than you do on branding and marketing (a stupid decision), they’ll look better than you. What alternatives does this leave you except to spend more, or look like a poor relation?

Leaders must understand that skill is still a marketable commodity.

If they took the money they wasted on needless advertising, money lost through discounted fees, and money lost through the incompetence of some of their salespeople, and invested it in training, it would build their teams’ skill.

Training and practice build skill. Skill wins more business. How often do you train your team?

Is your training typical industry training? If so, you will produce typical salespeople. Again, same same, but not different.

Profitable real estate agencies use business systems that work. They have trained salespeople armed with points of difference that impress clients and win business. They set standards and never resort to knee jerk reactions to their competitors’ tactics.

These agencies are different and so are their salespeople. And they’re impressive – they earn high profits, month in, month out.

Gary Pittard

Low On Listings?

How is your office going for listings? Would you sell more if you listed more? In Australia and New Zealand, many real estate people are facing the same challenge.

Some offices that complain about a shortage of listings were suffering the same affliction pre-COVID.

If that describes you, it’s time to do something about the problem. If you don’t build stock, you will waste a good boom.

There are some ‘levers’ you can pull to boost your stock levels.

  • Marketing

Your agency must become a ‘marketing factory’. There are three ways to market for listings and you must have all of them working for you.

Print

This is hardcopy marketing. You should blanket your area with proven, effective leaflets and direct mail. It takes time to build momentum from marketing and you must be consistent. Every month, every property owner must hear from your agency. This is branding in action.

Digital

You should have an effective social media marketing campaign, but more importantly, you must have a consistent direct email marketing campaign. Sure it takes time to set up, but you’re missing listing enquiry if you aren’t contacting potential clients as often as possible.

Personal

How much prospecting for new listings is your team doing? Regardless of the market, some salespeople will always say they’re too busy to prospect. But is there a higher priority now? You can’t sell what you haven’t listed.

  • Follow-up

Leaders often say that the standard of their salespeople’s follow-up needs improvement. Now is the time to work on that improvement – diligent follow-up has never been more important.

As the leader, do you speak with every client who’s listed with your agency? It is important to know that your clients are being looked after by your salespeople.

  • Present better

If a salesperson is losing listings to competitors, you must work on improving their presentation. It takes as much time to get a listing as it does to lose a listing. The better the listing presentation, the higher the present-to-list ratio and the higher the number of listings the agency has available to sell. Incompetence is a huge cost to a real estate agency, and I mean huge!

  • Close better and more often

Are your salespeople getting the listing at the initial appointment, or do they often need to return for a second attempt?

If they aren’t closing most listings at the first presentation, they may need a better presentation and they will almost certainly need to learn to close better and more often.

A good way to improve your salespeople’s listing presentations is to have each one present to you in a role play.

Replace what you sell.

A good discipline for every agency and every salesperson is to replace what you sell. If you made 5 sales in the month, you must replace them with at least 5 listings. Keep this discipline alive and you won’t run low on stock.

I’m a great believer in fixing persistent problems and fixing them properly – once and for all.

Listings are out there and if we want more sales we must find them. More marketing and more prospecting carried out consistently and over the long term will have you saying, “Low on listings? Not in this office!“.

Gary Pittard

Held To Ransom

If I asked you to identify somebody in your team whom you

New Challenges

Stagnation. It is the last thing a leader wants to see happening with the team. Yet, in the absence of new challenges – focused activities that challenge the team, putting a month’s focus on high-intensity activity designed to boost results – stagnation is a real possibility.

For example, many offices across Australia and New Zealand are short of stock. Why not set a challenge with the team and plan an Operation Stock-Up?

An Operation Stock-Up is a listing blitz that focuses on achieving a record number of properties listed by the agency in one month.

The leader and support team set up a marketing blitz that commences ten days before the month of the Operation Stock-Up.

Time To Brush Off the COVID Cobwebs

Happy New Year. If you

What Baggage Are You Carrying?

Business has been good for many agents in 2020, despite the COVID-19 pandemic, but it

One Size Does NOT Fit All!

The Pool Just Got Deeper

Agency leaders often complain that they can

Where To From Here?

As leaders we

Who’s Making the Excuses?

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

Saying ‘Yes’ When Others Are Saying ‘No’

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,

Want to reach your profit potential? Contact us now.

Pittard


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Ultimo NSW 2007
Australia


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