Why do some agents make more sales than others? What makes some agents capable of creating sales when others struggle for a single lead? Contrary to popular belief, it’s not a cool web tool or a more expensive marketing plan. Almost always it comes down to a single, consistent factor, no matter what company or place in the country:
A great manager.
As we’ve said before in this blog, most agents work too hard. Real estate is the simplest sales business made unnecessarily challenging. The proof is in the production pudding: Walk into any office and the usual “quartile” of production is apparent: 25% of the agents do 2-4 times as much production as the next three quartiles put together. The top quartile generates more than $100,000 in gross commissions, while the next quartile averages around $46,000. Below that, the production is around $12,000 or nil. Your choice, but it isn’t pretty at the bottom.
Traditional wisdom says the top 10% does 90% of the business. Most likely that’s true. But what the wisdom doesn’t say is why. At least, it doesn’t say so correctly.
The talking heads usually attribute agent productivity to the “inner agent.” Some kind of “high producing spirit” that inhabits the body of top producers, while the rest remain walking zombies bereft of productivity. Certainly, some degree of high-energy entrepreneurial spirit causes the top achievers to push more production. But the numbers often tell a different story. Top producers aren’t necessarily top performers – margins for top producers are lower because they often spend more to generate the business (top producers are often top postal mailers, too!).
Either way, there still exists a group in the top segment of the office that producers or performs higher than the rest. Why do they do it – and how can managers learn to duplicate it in the rest of the sales team? Actually, if you simply ask the top producing agents, they’ll tell you – because we stick them on “panel discussions” all the time at conventions. Now if managers were listening, here’s what they’d hear (Hint: it boils down to: I did everything you told me to do!):
- Make the agent create a business plan. It doesn’t have to be elaborate. Income goals, hours to be worked, average deal revenue, number of deals needed, expense limits. It’s important for the manager to align the plan to the company’s mission and goals – assuming we’re on the same team here – but without a plan, there’s nothing for the agent to “refer to” when they look at their progress. Goals are critical. Written goals are golden!
- Provide the agents with some standards of performance. Give them guidelines on how much “tolerance” the company approves on pricing listings, spending marketing dollars and working with buyers. Identify the expected activity duration for prospecting a single lead – and average response rate (speed) the agent is expected to respond to online inquiries. Set out the number of photos to be placed online, standards of writing ad copy, etc. When managers outline clearly the expectations and degrees of performance for agents, it’s easier for them to work toward them – and know whey they are (and are not) achieving them.
- Create a professional development path. Conduct an assessment of the agent’s abilities relative to the company standards of performance. Then create a custom training path for that specific agent. Ask the agent to create a schedule to take training – which the company usually provides or can be had at the local Association quite cheaply – and then have them post it into a calendar. Schedule in advance a time to review their progress. If you’re serious about making the agent productive, then spot them the money for real courses – like CRS, WCR and CRB stuff (oh, and our stuff too :>) – and let them pay it back off of their increased productivity.
- Go to work with the agent. Spend a day or two or three or four with the agent. Watch them work; work with them. Go to a sales presentation, open house and a few showings with them. Just watch – then provide suggestions to them (afterwards, not in front of customers). Management’s job is to identify performance gaps – so it needs to evaluate them, usually by watching them happen – and then provide coaching to help them improve. If you have 20 agents in your office, that’s only 80 days a year; 100 agents might take your entire schedule. But that’s what managers are supposed to do: but you can only manage the performance by being there with it. Ever see an orchestra conductor lead a symphony from behind the stage?
- Draw some lines. Much like creating and communicating the standards of performance for pricing, listing, marketing and prospecting, managers can help agents improve dramatically by drawing some lines in the sand behind which “non performance” will not be allowed to fall. One important area is to draw a line on minimal technology usage: Kick the agent out of the office and don’t let them come back without a laptop, digital camera and Blackberry. Even the plumber shows up with his own wrench! Draw the line, too, on how many times you’ll let the agent skip floor duty, not show up for the office meeting (without a good closing as an excuse!) or not work the phone-inquiry properly. Sometimes, the best productivity boost comes from knowing that someone is “watching” our performance – and will hold us accountable, even if that means simply “calling us out” on our lackadaisical ways!
- Praise them publicly. Real estate is an ego driven business. Hard work pays off – often quite handsomely. But it’s also kudos that agents seek. It doesn’t mean you have to provide extra money, gifts or even awards. A simple, personal recognition at the office meeting goes a long way. Spotlighting them in the company newsletter or even in a local press release will put stars in their eyes. Praise goes a long way to motivate people: More money is easy to come by but the admiration of our peers and leaders is priceless.