I read this a long time ago but cannot remember where I read it or exactly who was involved.
My recollection is that John D Rockefeller (I don’t know if it was senior or junior) was having his shoes polished, when the busboy gave him a ‘hot’ stock tip. The magnate sold all of his shares the next day, saying something like, “When the busboy buys, sell!”. Shortly afterwards the share market crashed, followed by the Great Depression.
OK, I told the story badly, but the moral is a good one: don’t follow the crowd. This is great advice that many agency owners are not heeding, to the detriment of their businesses.
Markets go up; markets go down. Good leaders know how to keep their offices prosperous no matter what the market is doing. But what are the ‘masses’ of agency leaders doing right now? They are ‘hunkering down’. Cutting expenses.
And not hiring.
This makes things worse.
This market affords a great opportunity to grow your business. Cut down on the sales team and you will lower your wages bill in the short term, but if you are not careful ‘natural selection’ will take your wages bill even lower, because weak and ineffective team members will leave.
You may be thinking that The Pareto Principle applies here. This principle states that 80 percent of your business will be achieved by 20 percent of your salespeople. This is correct if you have a team that is heavily laden with mediocrity. The fact is that if your sales headcount is so low, your business is at great risk should even one salesperson leave. When it comes to a sales team, there truly is security in COMPETENT numbers.
Do you know this saying?
When the going gets tough, the tough get going.
RUBBISH. Look at the reality:
When the going gets tough, the WEAK GET GOING!
They quit. Leave your agency. Look for an easier job.
If you don’t hire now, your sales team may shrink to such a low level that you won’t make enough sales to reach your Break Even Point. If this happens, don’t blame the market, blame your unwillingness to hire.
And I mean HIRE PROPERLY. Real estate agency leaders need to rethink how to attract winning salespeople.
Commission-only is dead. Even if you can legally get people to work in your office on commission-only, in markets like this you won’t attract them. If you doubt this, ask any New Zealand agent. On this reward system they haven’t been able to get good people for years.
Low retainers debited against commission doesn’t work any better. How are you going to attract people when you offer around $40,000 retainer debited against commission?
If you want a winning team, here are some things you must rethink:
- Get over the fear of high salaries. If you want winners you have to attract them. Is your present system working? Then rethink offering low, or no salaries.
- Understand that the salary is paid for completing winning actions competently. If your people won’t train, prospect, and improve, fire them. You can’t afford to pay high salaries to people who won’t do the work. Don’t pay for low levels of incompetent activity. Rethink performance.
- Work with your team. Take them to training, examine their knowledge levels regularly (test them) and expect improvement. Cut training and you cut results. Rethink the importance of training.
- Remove chronic underachievers and replace them with people who are grateful for the opportunity. If you want to cut your wages bill here is where you do it – remove incompetent people. Rethink keeping losers.
- Understand that experienced people is not the best hiring pool. If you have an effective hiring program, you can train inexperienced people and get a much better result than you will with your typical experienced person who moves from office to office.
How far have you got by following the crowd, by shrinking your sales team when times are tough, then scrambling for winners when the market turns sunny?
It’s time to step out of the crowd. Don’t shrink your business into oblivion.
It’s time to hire.