Leadership for Your Brokerage
Leadership for Your Brokerage
Like a deer in the headlights. That’s how brokers describe some of their newer associates’ reactions to today’s changing markets. In this new environment, nothing is more important than keeping your sales associates motivated, because it’s only when they’re hungry to succeed that they can look at slower markets and see opportunity.
“Attitude and morale become critical,” says Beth Butler, chief operating officer with Esslinger-Wooten-Maxwell, REALTORS®, in Coral Gables, Fla.
But words of motivation, no matter how inspiring, might ring hollow unless they’re built on practical programs that help associates navigate shifting markets, say brokers. It’s training and prospecting programs that help channel your associates’ fear into action.
“When we move salespeople away from anxiety into an action plan, they relax,” says John Foltz, CRB, president of Realty Executives of Phoenix, which operates in a market that’s seen more than a 30 percent drop in the number of units sold in the past year.
Here’s how brokers in once hot markets are inspiring associates to success.
The Market: Phoenix
The New Reality:37 percent sales decline*
The Plan: Focus on long-term relationships
To light a fire under associates, Foltz’s Realty Executives created a program to help them establish 10 solid personal relationships each year out of which two dozen transaction sides are expected to grow. “For people who use the plan, business is increasing,” says Foltz.
The program works this way: In Phoenix the average home turns over once every five years, he says. That means 10 relationships could translate into two listings per year. Assuming associates also handle those sellers’ move up purchase, that’s another two transactions, totaling four sides annually. Each of the original 10 relationships can also be expected to generate at least one referral, resulting in a potential total of 20 sides, assuming a listing and purchase for each of the 10 referrals. That’s 24 sides a year.
“Our average side is worth $8,000, so [24 sides is] $192,000 in gross commission income,” Foltz says. “Relationships are five times more valuable than individual transactions.”
To get to those numbers, the company has implemented a voluntary five-step plan in which associates agree to
- Provide the name, address, phone number, and e-mail address for all their contacts, preferably in digital form. The company inputs the data into its contact management program.
- Create a message of value, such as notice of a listing or sale or a market update, that for about $50 monthly, the company mails or e-mails to associates’ sphere of influence.
- Make a daily call commitment. “Associates choose how many calls they’ll make each day to their sphere of influence,” says Foltz. “All they have to say to prospects is, “I’m continuing to enjoy success, and I couldn’t do it without people like you. I’m simply calling to say, ‘Thank you.’ ”
- Personally meet with somebody in their sphere each week. Consumers are nervous about the market, “and they want somebody to lean on,” says Foltz. “Through continual contact with messages of value, associates show they care.”
- Choose an “accountability partner,” another associate, who’ll call them weekly to check whether they’ve done what they promised. A buddy is less threatening than the broker.
Foltz says about 25 percent to 30 percent of the company’s associates participate, and anecdotal reports show those associates’ business is up 40 percent to 60 percent since starting the program.
The Market: Washington, D.C.
The New Reality: 19.5 percent sales decline*
The Plan: Turn associates into teachers
For Kevin McDuffie, GRI, branch vice president and managing broker at Coldwell Banker Residential Brokerage DuPont Circle in Washington, D.C., motivating salespeople goes hand in hand with helping them educate sellers. “We need to educate salespeople so that they can teach consumers to treat real estate more like a business than an emotional purchase or sale.”
Part of that process is showing sellers “they’re not the king of the hill anymore,” says McDuffie. Sellers have to understand how to improve their property and price it to attract the most buyers, and that means teaching associates to develop an advisory relationship with them.
With that in mind, the company has created in-house courses that focus on such topics as educating sellers to position their property properly and showing consumers why this is a good time for buyers to act. And at sales meetings, associates brainstorm and rehearse responses to objections they’ve encountered during the week.
“We don’t complain about the market,” says McDuffie. “We try to figure out ways to make market changes beneficial to our clients.”
*For Washington, D.C., October 2005–October 2006. Source: Greater Capital Area Association of REALTORS®, Silver Spring, Md., and Metropolitan Regional Information Systems Inc., Rockville, Md.
The Market: Coral Gables, Fla.
The New Reality: 32 percent sales decline*
The Plan: Motivate through step-by-step productivity plans
When dramatic marketwide changes are under way, the role of the brokerage is to stand ready to help each associate with an individualized productivity plan—if the person wants it, says Beth Butler, chief operating officer of Esslinger-Wooten-Maxwell, REALTORS®, in Coral Gables.
There are three types of associates in a changing market, says Butler, and you have to know which to motivate.
First, there are experienced associates “who understand the new market and immediately adjust and succeed,” she says. Second are those who have enough money to just go with the flow. “They’ll wait it out and work when somebody wants to work with them,” she says.
The third type, often newer salespeople, needs motivation. “They’re frustrated and complain more than others,” she says. “You have to spend one on one time with them to help them decide what they’re going to do to make it in this market.” And, she says, you cut them loose if they don’t show signs of improvement even after being helped.
Butler’s productivity plan for associates emphasizes monthly goals: a production objective as well as a minimum number of calls to the associate’s sphere of influence and other prospects; mailings; and networking events to attend. At least monthly, associates should assess how close they have come to meeting their goals and revise them on the basis of what they learned is realistic. Perhaps they shift to more mailings than phone calls, for example.
Then brokers have to determine with whom to keep working and whom to show the door. “Look for associates’ willingness to execute the plan,” says Butler. “If after a few weeks they haven’t taken that first step, it’s probably time to recommend that they put in that job application at Macy’s.”
*For Dade County, Fla., September 2005–October 2006. Source: Esslinger-Wooten-Maxwell, REALTORS®
It’s training and prospecting programs that help channel your associates’ fear into action.
The Market: Northern Virginia
The New Reality: 31 percent sales decline*
The Plan: Get associates pumped with market updates
To help its associates position themselves as clear-thinking analysts who can dispel the myths and rumors about the nature of the local market slowdown, McEnearney Associates Inc. provides salespeople regular real-time monthly market activity reports. In addition, brokers discuss market activity with associates during weekly business meetings.
“Consumers are getting bombarded with information, much of it inaccurate,” says David Howell, GRI, executive vice president and managing broker of the company’s branch in McLean, Va. “We’re equipping our associates with information to address misperceptions about the market.”
The monthly market analysis includes sales volume and new listing and new contract counts; days on market; average sales price; and month’s supply. The reports also contain brief analyses of different housing segments, such as condos, which associates can use as talking points. “The data is factual, right out of our MLS, but we also try to provide context,” says Howell.
In addition, the company provides historical information on slowdowns going back 15 years to show that the economic fundamentals of today’s market bear no resemblance to earlier ones. “We provide this to associates, most of whom weren’t here 15 years ago, to build their confidence and put today’s market in context,” says Howell. “It’s a sluggish time, and I’d be unmotivated, too, if I thought the market was going to be like this for five years. Our belief is that this market shift and decrease in prices is nowhere near as dramatic as it was in the early 1990s and that it won’t last as long as it did then.”
*For Fairfax County, Va., October 2005–October 2006. Source: Greater Capital Area Association of REALTORS®, Silver Spring, Md., and Metropolitan Regional Information Systems Inc., Rockville, Md.
The Market: Fort Lauderdale, Fla.
The New Reality: 35 percent sales decline*
The Plan: Back to basics for everybody
Sometimes motivation comes from sharing your experience. Ray Barkett, CCIM, senior vice president and managing broker of The Keyes Co. in Fort Lauderdale, uses his deep roots in the industry to teach his associates about the market. “Having experienced these changing markets more than once over my 35 years in the business, I can share some observations,” he says.
For instance, Barkett reminds his associates of the upside of today’s market. “The good news is that although most people feel that falling prices are a disaster, they’re not necessarily a bad thing,” he says. “We’d reached the point in several areas of the country recently where as many as 75 percent to 90 percent of the population couldn’t buy the average priced home. As prices drop, more people can afford to buy, and we’ll see a gradual increase in sales.” The message reassures salespeople that this market isn’t unique but part of a normal cycle that will end, just as others have.
“The other good news is that we’re coming out of what I call a market of delusion,” he says. “New people poured into the business, and they were deluded into thinking the [boom times] could go on forever. They failed to realize that they were in the right place at the right time and that their success was simply a product of the time.” Now you have to have the skills.
The end of the market of delusion works to the benefit of salespeople with the proper training, says Barkett, because with proper training, “salespeople can be highly successful compared with competitors who don’t have the training.”
To develop skills in what Barkett calls “the lost arts” of real estate, including presenting an offer and getting price reductions, Keyes offers associates frequent training. In fact, every Friday the company holds a two hour workshop to address a single skill, such as marketing listings more effectively. The company used to train primarily new associates; now, because of changing market conditions, it trains all associates.
Barkett is also daring his associates to succeed. “To motivate salespeople, you have to point out that this market lets them accept the challenge of who’s the real deal in real estate,” he says. “It’s like the song: If you can list and sell in these times, you can list and sell any time.”
*For Fort Lauderdale, Fla., October 2005–November 2006. Source: REALTOR® Association of Greater Fort Lauderdale