We’re mad at it. We blame it for our troubles. We’re afraid it will eliminate us. But recession offers answers for real estate brokers to createsuccess, if we’re willing to listen and adapt. Otherwise we might just find out who’s buried in Grant’s tomb.
What’s the point, after the novelty wears off, that makes social networking a viable channel to create new business? Just what is the outcome to be achieved with social networking for real estate professionals? Read more…
In a tough market, real estate companies need everyone to contribute their best efforts daily. Agents need to prospect, follow up on leads and ask for referrals. Marketing departments need to revamp websites, produce constant blog content and create company buzz on social networks. And what should managers do to contribute their best? Get out of their office!
In one of our recent management workshop, a group of managers and brokers were brainstorming ways to “make agents more productive.” It’s always instructive to hear this kind of language, as if agents were programmable robots who merely need a few new parts and software upgrades to be more efficient. The discussion turned to the usual solutions like training agents to use technology, encouraging them to purchase smartphones, mandating minimum photo and video features per listing and getting them involved on Facebook. All excellent ideas, but all missing one essential point.
Improvement isn’t spontaneous.
If it were, why would we need managers, coaches or trainers? Hardly any of us wakes up one day and “becomes” more productive. Olympians have trainers – really, managers – who show up with them every day. Yet even the best trainers will tell you that it’s not just the “training” during the class but the “implementation” after class that changes outcomes. George Washington led his men across the Deleware. He didn’t stay back in his tent.
Most of what agents and companies need to do to increase productivity isn’t rocket science. It has already been discovered, tested, proven and perfected: Prospect 50% of the time, focus on referrals and repeat business, and communicate with consumers the way they want to be contacted (such as text messaging or social media). In fact, most agents know these things.
It’s up to managers to help them do them.
What’s the best way managers can help agents do their job – whether it’s old-school or high-tech in style? The answer isn’t contests, cash-rewards or speeches. It’s not new technology or more marketing dollars. Any manager can tell you today that they have plenty of those things, but the needle isn’t moving.
Instead, managers need to do what they ask agents to do – if they want to change the outcomes at their companies. And that means one simple thing:
Get out of their office!
Managers need to be a daily – and constant – part of the production process. They need to be in the action, as it’s happening. This simply cannot be done from their corner office. And for the most part, it cannot be done in the physical office at all. But let’s not get ahead of ourselves. One step at a time.
Imagine what would happen if managers did not have back offices within the company. Where would they sit? Right next to the agents. What would they do? Listen, watch, learn – and be involved. That’s exactly where companies need managers to be: at the front of the action, a part of the process of creating and nurturing new business.
Managers without offices would change everything.
Suddenly, agents sitting around chewing-the-fat would be visible to the manager. And the manager would be visible to them. Not picking up the phone or sending out email marketing would not persist for long under the watchful gaze of the production manager. Within proximity of the action, managers would see and hear how customers were being handled by whoever is answer the phone. Good interactions could be praised; bad ones could be corrected, mentored, improved. Right away. Not at some future date.
Managers in the action could greet customers and learn critical market information. How did the customers choose their company? How were things going with their agent? Are they aware of the other services the company provides? Oh, and thank you for the business. Managers meeting customers would change everything.
But without an office, how would the manager do “their work”?
Just what work do you mean? Paperwork is not the work of management. It’s the work of an administrator. Managers read reports, learn from them, and adjust production by coaching their agents. Managers don’t write reports. So who needs an office to do that?
Managers don’t plan events. They don’t order trophies. They don’t go to wasteful meetings – inside or outside the company. Managers manage output from the production floor. And that cannot be done from the corner office, a meeting at the local Board or picking out a hotel for an event. Surely there’s someone else who can do that.
But there’s only one person who can manage.
Everything would change at a company where the managers sat next to the agents all day long. Morale would soar, as agents reconnected with their leader – and received consistent support, encouragement and advice from them as the action was happening. Interpersonal conflicts would be managed, as hearsay was replaced by first-hand observation. And the act of making or capturing new business would be managed. No paperwork could ever be more important than that.
Now consider the ultimate conclusion. What if the manager actually left the building? Not by themselves, of course, but with their agents. What if managers accompanied agents on listing appointments, showings and closings? That would really change everything. New agents learning the trade would have their manager by their side, mentoring and supporting them as they applied skills for the first time. Experienced agents could move to the next level of performance, as their mentor helped them refine their skills even further. Even Olympic trainers have to actually watch their students perform in order to point out their opportunities for improvement.
A manager accompanying an agent could debrief, correct and coach the agent’s performance within minutes of the action.
Managers out of the office would not only support an agent’s performance right away, but they would learn incredible amounts of valuable information from actual consumers – many of whom are never in the office. Managers at open houses could observe and interact with consumers and learn about their expectations, concerns, trends. They could identify which marketing approaches were effective. They would conduct a “higher order” assessment of consumers in actual sales situations – and take that information back to the rest of the office. When was the last time an agent debriefed the rest of the office on what they learned at a showing or an open house?
That’s the job of management.
Some managers do this and it’s why their companies consistently beat the market and produce successful careers for agents. In fact, companies with managers who aren’t in the office find they rarely have to recruit new agents. They are too busy making existing agents productive – by participating in the production process – that there’s little need to replace failing agents. Managers outside of the office see potential failure in advance – and can take action to avoid it. Retention becomes a non-issue as well, as agents realize they couldn’t possibly substitute a higher commission or new tech-tool for real-time management involvement.
For some companies, kicking managers out of their offices may be a radical idea. The corner office is long-seen as a reward for achieving a certain level in one’s career. Yet all too often the rise in a manager’s career coincides with a drop in the company’s performance. It’s easy to blame the market, the consumer, new technology or ill-trained agents: but it would all be self-deception. Companies have sold record numbers during recessions, without the opportunities of new technology, during times when agents weren’t even licensed. Time and time again, when we look at highly productive companies, we see the same formula at work. Hard working sales professionals who are led – daily, consistently, directly – by a manager who is on the front lines, in the middle of the action. Leadership cannot be done from the back office.
If you want to change everything at your company this year, lock the corner office door. And throw away the key!
There are two basic reasons why companies fail: unwillingness to embrace the obvious changes of their day, and a smug rejection of customer feedback. Those two factors can be found in every company that once commanded its market, then lost the leadership spot: Ford, Motorola and IBM. Each thought it “knew what was best” for the consumer. And each was taught quite quickly that the customer is always right. It’s a lesson being learned by other industry leaders today – such as Barnes and Noble, and some of the biggest real estate brokers in the country. We call it the “Failure Mindset.”
If it’s one thing technology companies just can’t seem to learn, it’s that their users hate it when they are forced to learn – all over again – how to use their products. Whether it’s Microsoft’s incessant rearranging of menus and folders, or Facebook’s latest face lift, users are getting quite fed up with having to suddenly “look around” to figure out how to do today what they did yesterday without effort. It’s a lesson for all businesses that consumers prefer it when we stick to it.
On Screen – a periodic “launch” of news, commentary, resources, bloggers and other information you can use to get your week started – from Matthew Ferrara & Company.
On Screen: Real Estate Industry news launch for February 9, 2010:
- The Wall Street Journal reports that Fannie and Freddie have already consumed more than $111 billion in taxpayer dollars. And they are likely to need more.
- A real estate bubble in Canada looks like it’s already inflated and expanding. Some markets are experiencing surges of 20% month-over-month, and it shows no signs of stopping.
- NAR Economist Lawrence Yun finally acknowledges that the tax credits are causing housing data to skew wildly every month in the latest release of pending sales figures from the National Association of REALTORS.
On Screen: Expert Advice from Industry Leaders:
- Steve Harney reminds REALTORS that the housing “recovery” is shaky in “Built on Jenga Blocks.”
- Stephen Fells offers ideas on how REALTORS can keep an eye on what the social sphere is saying about their business in “Why Every REALTOR Should Use Google Alerts.”
- Ron Hahn offers thoughts on how branding differentiation works in the real estate industry in “Interesting Branding Insights: Real Estate Companies Pay Attention!”
On Screen: Technology Trends (with Comments)
- Cisco says there will be more than 5 billion personal devices connected to wireless mobile networks. (Important trend considering under 50% of REALTORS reported using a smartphone last year).
- Comscore research shows that more than 178 million US citizens watched more than 33.2 billion videos in December 2009. (Amazing considering so few property listings have videos on them.)
- Nielsen research says that use of social networking online soared more than 82% last year over the year before. (Yet less than 35% of REALTORS had a social networking presence in 2009)
On Screen: Smart Ideas to Sell More
- Entrepreneurs should beware “vanity metrics” when measuring true performance, says the Harvard Business Review.
- Timeless ideas on innovation from Peter Drucker at Human Resources IQ’s website.
On Screen: But Wish it Were Not!
Here’s the MLS photo of the week from “Really Bad MLS Photos” group on Facebook:
As many of you know, we’re not fans of the Case-Shiller housing report. Aside from the relentless media spin about the tiniest blip up or down, the primary problem with the report is that its focus – home prices – is simply an incomplete picture of the housing market. To understand what’s happening in any commodity market – especially housing – much more context is needed. And don’t expect the local REALTOR’s analysis report to be any better: Few are worth the paper they are (still) printed on.
Thank goodness, then, for Hagerty’s Quarterly Housing Report.
In Part 1, we started the countdown towards May 1: The Day After government tax credit subsidies expire for housing purchases. Leading up to that date will be a frenzy of purchases and sales that will make it “look like” the market is bouncing back. But are we kidding ourselves? When the clock strikes twelve, the housing market will fall again – just like it did in December 2009, the month after the tax credits “almost” expired last time. Only this time, it’s going to happen for real – and it will make the 17% December decline look like a blip on the chart of decline. In Part 2, we offer a few suggestions as to how REALTORS can stay in business when the dust settles.
As a resident of Massachusetts, I admit we do things a little different up here. Yes, we’re the colony that launched the first tea parties. We recently revived them to remind government that we haven’t forgotten our Founding principles . But it looks like the Massachusetts time-machine is going way, way back – at least in the housing industry: The latest REALTOR education class makes one wonder whether Salem Witches will be making a comeback?
Surprise, surprise: Home sales plummeted in December 2009. Certainly, this isn’t news to the consumer, although housing economists seem to be surprised at how fast and far the month-over-month numbers declined. Now the worry is about a potential second market collapse this year. If the housing market fell nearly 17% the month after the original housing tax credits were supposed to end, what’s going to happen when they really do come to an end? Are REALTORS ready for the Day After?
As recently noted in this column, FHA is a mess. The Federal Housing Authority has been backing loans like a Madoff, and their scrutiny of borrowers has been just as good. With a wink-wink, nod-nod, FHA has come dangerously close to disaster, with significant proportions of its portfolio making only one payment before becoming delinquent. Now that’s all about to change. The question is: Will REALTORS be ready?
Readers of this column long know of our contrarian opinion of most traditional real estate practices. None more frequently irks us than the idea that all problems in real estate can be solved by increasing the body count, er, recruiting. Even amidst the worst downturn in housing markets in two decades, brokers who hate recruiting still can’t stop doing it. Perhaps because as awful as it is, recruiting is still easier than focusing on productivity.
From Wall Street Journal Chart
At the start of 2010, REALTORS need more from their news sources than footsie interviews with government policy makers. In the January edition of REALTOR Magazine, another opportunity to set the record straight and get critical insights for its members about FHA’s role in the marketplace was wasted. Here’s a short list of alternate questions REALTORS need to ask policy officials soon.
We all know there’s no such thing as a free lunch. But for a while, homeowners, buyers and real estate agents thought a “heavily discounted” lunch was ok. Especially when it was Uncle Sam handing out the brown bags. Now the real estate and mortgage industries are paying the price for Fannie Mae’s free-lunch fraud. Looks like the people who couldn’t afford “affordable housing” most weren’t just consumers, but its most vocal advocates. Talk about bad strategy. Read more…
If there’s one thing the real estate industry needs to worry about, it’s mis-information. Bogus appraisals, misleading market analyses and self-serving press releases make it nearly impossible for consumers to get accurate data about the market. Even Fannie Mae can’t be trusted to accurately report how many subprime loans it makes. And with regular releases of the misleading Case-Shiller report, is it any wonder buyers and sellers don’t know what to believe? Read more…
