If you're in a hurry then here's the Readers Digest version of this post: Facilitate Agent Success. If you want some effective ideas on how to do that, then you'll want to keep reading.
1. Coach Entrepreneurs
When the market is hot everybody and their mother gets a real estate license. They'll sell their closest friends' and relatives' houses and make a few nice commissions; but they're still not making a real living.
These poser agents treat real estate as if it's like playing the Lotto. They get a license and, more or less, wait for their number to come up. When the market goes south, and close friends and family have already been tapped, their numbers stop coming up.
That's why market downturns are always accompanied by enormous shrinkage in NAR membership.
The real estate industry isn't doing itself any favors by enabling this kind of agent ebb and flow. Too many novice shepherded transactions drags down agents' and the industry's reputation overall. Massive agent turnover certainly doesn't help brokers. Crushing disappointments and poverty aren't good for agents either.
How can brokers help turn this situation around? They can do it by insisting that those who would call themselves agents actually be in business; not just fooling around.
Don't kid agents. There is no question that real estate is a relationship oriented business; as this seven minute video makes very clear. Brokers need to tell agents that running a real, profit making, business requires substantial and consistent marketing to start, build and maintain enough relationships to sustain a desirable income.
Brokers should provide their agents:
- Success models for direction
- Standards for discipline
- Consequences for non-performance
2. Make Marketing Systems Happen
Look at the demographics. On average, one in ten homeowners move each year. Ongoing relationships with one hundred people will put an agent in the way of about ten listings in an entire year. Those listings will generate more buyer relationships, and if handled well all those relationships will also generate additional buyer and seller referrals.
But what if an agent wants to do even more transactions; 30, 50 or more? Easy; just maintain ongoing relationships with 300, 400 or 500 homeowners.
Gary Keller's book, "The Millionaire Real Estate Agent" provides proven marketing models for the amount of contact agents need to make to consistently generate activity. Met marketing is by far the most productive; 2 transactions per year for every 12 Mets in a database; provided that those Mets are "touched" 33 times every year. Newly Met people need to be touched 8 times in 8 weeks. Unmet people need to be touched 12 times per year.
Do the math. That's a lot of very complex marketing. Many agents have the book; a lot of them have even read it. Very few of those are actually doing the kind of marketing the book suggests; why? It's just too crazy making to keep up with; if you don't have a comprehensive, automated marketing system in place. This seven minute video illustrates the problem.
The good news is that the right system, properly setup, can easily handle this volume of marketing with high quality materials; for much less money than traditional mailings and advertising.
Brokers should make every effort to get agents to acknowledge their need for marketing systems, and facilitate implementation of those systems.
3. Measure and Report on Performance
Brokers should focus agent attention and effort on key success factors:
- Marketing Database - Is it all in one place, ready for targeted marketing, and sufficient in size to reach income goals?
- Compelling Reputation - Does the agent have a full complement of marketing materials in place that brand the agent's image as very knowledgeable about real estate, skillful at applying that knowledge, and one who performs at a very high level?
- Marketing Campaign Consistency - Does the agent have systems in place for controlling and executing sufficient marketing contact, consistently?
- Active Listings - How many active listings does the agent have; more is better. Listings are proof of effective relationship management.
- Average Days On Market - On average, how long are the agents' listings on the market? Longer than average points to needed improvements in listing qualification, pricing advice and listing marketing.
- Buyer Agreements - If an agent works with buyers; how many signed buyer agreements does the agent have? Lack of signed buyer agreements is a sign that more training on presenting agent value to buyers and better buyer control is needed.
- Transaction Success Rate - What percentage of escrows begun actually close? Low rates point to more training needed on buyer qualification and transaction management.
- Transaction Dollar Volume - Is dollar volume sufficient to meet agent income goals? Inadequate dollar volume points to need for better target marketing and marketing volume.
Recognize Improvement and Achievement
Everyone appreciates positive reinforcement, including agents. Public recognition of agent improvements and achievements will help brokers in the following ways:
- Keeps agents focused on the performance issues that really matter.
- Rewards individual agents for their successes
- Facilitates agent sharing with each other
- Creates a more positive office environment
4. Set & Enforce High Standards
Nobody wants to join, or stick with, a losing team. Either you're growing, or your dying; there's no treading water in this business.
Look at your agents as a group. How many of them are really demonstrating that they want to own a real business? How many of them are kidding themselves, and you? There shouldn't be a ratio. If 100% of your agents aren't committed to building real businesses; then that's the first thing you need to address.
Expect Entrepreneurship
- Only retain agents who are committed to building an actual business.
- Only retain agents who are able to build an actual business.
- Only recruit agents who are committed to building an actual business.
- Only recruit agents who are able to build an actual business.
Make it clear that you expect, and will help, every agent in your office to run their business as a real business, and you will have only agents who are headed for substantial success; there goes your retention problem.
Once word gets out on how you facilitate your agents' success, you won't have a recruitment problem.
Once you have an office full of agents who run their businesses like real businesses, you won't have a productivity problem either.
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