Your November Membership Access
UP! Magazine - November 2019, Vol 2, Issue 11
Three, Five, or Seven — How Many Stars Does Your
Customer Service Deserve?
by Bernice Ross, Editor-in-Chief
PODCAST OF THE MONTH:
How to Build a Team Using Niche Marketing
with Nancy Sanborn
OFFICE MEETING TOPICS
Real Estate Communication 101: Less is More
Stop Letting Sellers Take a Bite Out of Your Commissions
Zapping Confidence Zappers
How to Turn Your Sphere of Influence into a Sales Force for
QUICK HINTS: Weekly Tips to Build Agent Profitability
Podcast of the Month
Nancy Sanborn: How to Build a Team Using Niche Marketing
This month we are pleased to welcome Nancy Sanborn, the team leader for the Sanborn Team, Berkshire Hathaway, Beverly Hills. Nancy was #1 in units for her office last year and #3 in overall production, and in the top 100 nationally for Berkshire Hathaway. In today’s session Nancy shares the secrets of starting a team and the reason establishing a niche is so critical. Here’s what she will be covering:
- What it takes to run a successful team, how they are compensated, and common issues team leaders face.
- Why establishing a niche is critical to your success and how it is a long-term rather than a short-term proposition.
- How she got started developing her niche in probate including the marketing strategies she used.
- How to groom the next rainmaker on your team and other challenges you will face when you are ready to retire.
- Strategies for establishing a niche for your business.
How to Hit Your Profitability Goals in 2020
Hitting your production goals in 2020 requires more than persistence and self-discipline. If you and your agents are ready to do what it takes to hit your goals for 2020, you need a workable strategy to keep everyone on track throughout the year.
Will you hit your profitability goals for 2019? If not, you probably already know that persistence and self-discipline alone are not enough. You also need a written business plan that establishes clear-cut priorities based upon profits, not just revenue. To make your business and your agents more profitable in 2020, follow these guidelines.
- Identify Your Most Profitable Activities
The first step is to make profitability your #1 priority. Begin by going through your production from 2019. If you’re not tracking where each deal originates (open house, online lead, referral, etc.) begin doing so right now. What you’re searching for are the hree lead generation activities that resulted in the greatest amount of revenue from your business as well as the expenses associated with that income.
For example, assume that you generated the following amount of revenue and expenses for each of the following activities:
Referrals: $43,000 with a cost of $12,000.
Website leads: $23,000 with a cost of $6,000.
Expired listings: $21,000 with a cost of $4,200.
Postcard mailing program to farm: $8,000 with a cost of $6,000.
Newspaper ads: $6,000 with a cost of $7,500.
Which of these activities provided the greatest return on your marketing dollar? There are two ways to calculate this. The first strategy is to look at how much net profit that you made from each category. You can do this by subtracting the cost from the income generated.
Referrals: $43,000-$12,000 costs = $31,000 net profit.
Website leads: $23,000-$6,000 = $17,000 net profit.
Expired listings: $21,000 -$4,000 - $17,000 net profit.
Postcard mailing program to farm: $8,000-$6,000 = $2,000 net profit.
Newspaper ads: $6,000-$7,500 = $1,500 LOSS.
Examining the numbers this way shows that the three most profitable areas for the business above were referrals, website leads, and expired listings. Newspaper ads were costing more money than they were generating.
A different way to calculate this is to examine how much revenue each activity generated per dollar spent. To do this, you would take the total revenue and divide it by the total cost:
Referrals: $43,000/$12,000 costs = $3.58 net profit per dollar spent.
Website leads: $23,000/$6,000 = $3.83 net profit per dollar spent.
Expired listings: $21,000/$4,000 = $5.25 net profit per dollar spent.
Postcard mailing program to farm: $8,000/$6,000 = $1.33 net profit per dollar spent.
Newspaper ads: $6,000/$7,500 = $.80 LOSS for every dollar spent.
What makes using the second approach superior is that you can more easily compare which activities are the most profitable. If you were ranking these from the most to the least profitable, they would be: (1) expired listings, (2) website leads, (3) referrals, (4) postcard mailings, and (5) newspaper ads.
Consequently, if this were your production profile, your time and money would be best spent on working on generating more leads from expired listings. Every dollar spent there generates $5.25 in return. The two other top areas are website leads and referrals.
The smart move is to take the money from bottom two categories (postcards and newspaper ads) and to allocate it to one of the top three categories. To show how this works:
An additional $6,000 from postcard mailing plus $7,500 from newspaper ads totals $13,500 in costs. If you diverted this money into marketing to more expired listings, it would generate an additional $70,785 for your business as opposed to the $14,000 it currently generates. ($13,500 X $5.25)
Being willing to let go of your least profitable activities allows you to have more funds to grow what is the most profitable for you.
- Eat that Frog!
Brian Tracy wrote a wonderful book called, “Eat that Frog.” This refers to handling the toughest item on your to-do list first each day. Procrastination is the primary reason people fail to achieve their goals. Each time we procrastinate about doing something, it becomes that much more difficult to complete.
Thus, always tackle your three highest priority goals at the beginning of the day. Any amount of delay greatly increases the amount of energy and effort it will take to achieve your goals. This also holds true for your daily activities as well. You may hate calling on owners of expired listings, but if it's one of your three most profitable activities, do it first and get it out of the way.
- Use Emotional Rewards to Make Achieving Your Goals Easier Some people find that they are more effective in achieving goals when they have no emotional charge around achieving the goal. Slow, steady, and calm works best for them. Others need the adrenaline and the pressure of a deadline. Each person is different—identify the strategy that works for you and use it.
- Determine the Environment that Best Supports You
Every action you take occurs in the context of your environment. For example, some people thrive in a noisy, boisterous environment while others require absolute quiet. If you find yourself consistently being distracted when you're working, change your physical environment. If the office is a distraction, work at home and vice versa. Take note of where you are the most efficient and spend your time in an environment that best supports your success rather than hampering it.
Buckminster Fuller summed it up well when he said, "Environment is stronger than will." Set your priorities in order based upon your profitability, create a supportive environment, and have your best year ever in 2020.
Agent Rating Systems—We’re Asking the Wrong Questions
Ranking agents based upon algorithms composed exclusively of transactions closed, total production, or the number of “stars,” is about as effective as hiring your real estate agent based upon the question, “Who’s the prettiest?” Unfortunately, consumers don’t know the right questions to ask. It’s our job to educate them.
Agent Rating Systems have become a hot button controversy and for good reason. In my opinion, the current ranking systems are approaching this all wrong—they’re looking at the agent’s past performance rather than providing consumers with tools that can help them evaluate the agent’s ability to deliver the customer experience the clients want.
Consequently, we need to flip most agent ranking systems upside down. Instead of starting with agent ratings, a better approach would be to inquire about what the consumer wants and expects, build a system that provides them with “best matches” based upon their criteria, and then let the consumer decide armed with as much information as possible.
A key part of this process will be providing detailed feedback from post closing surveys as well as written and video testimonials.
What We Can Learn from Branding Models?
Have you ever tried creating a logo for your brand? If you have, the best branding companies ask you a series of questions to determine what matters most in terms of your brand. Here are the types of questions that you should be asking:
- What are the five most important characteristics that you want your real estate agent to have?
Give the client a list from which to choose and let them tell you what matters most to them.
The next three questions identify the niche that best fits the client. In real estate, three questions to include could be:
- In what location/zip code is the property located?
- In what price range?
- How would you best describe the property type you are buying or selling?
Options here could include a check off list with descriptors such as urban, suburban; free-standing single family vs. condo, townhouse, or high rise; ranch, first-time buyer property, or luxury.
You could also ask some sliding scale questions such as:
- How close do you want your real estate agent to live to your property?
- Do you want a single agent to handle your entire transaction or do you want a team approach where different specialists handle different aspects of the transaction?
- Do you prefer an agent who is a fast moving, get-it-done type or someone who can spend as much time as necessary answering your questions?
- How important is it to you to have someone who is a “neighborhood specialist?”
- How important is your agent’s experience level to you in terms of (a) years of experience vs. (b) number of transactions closed?
- How important is it that your agent is paperless?
Past Client Reviews
Consumers want transparency around who their agent is and how they perform. Instead of the current ranking systems, a better approach would be to let the agent’s past clients tell the story of their experience with their agent. Questions to ask in a survey of past agents could include:
1. Would you recommend this agent to your friends or family?
2. Did the agent provide you with a written guarantee of the services that they provide and if so, on a scale of 1-5, how well did they deliver on what they promised?
3. If you were selling your home, did the agent provide you with a written marketing plan? If yes, which of these items did it include?
- Print advertising including brochures and marketing postcards?
- Newspaper advertising?
- Web marketing plan including a single property website for the property?
- Listing syndication to major sites including their company website, their personal website, and major portals such as Realtor.com, Trulia, and Zillow?
- Social media marketing plan for Facebook, Twitter, Pinterest, and/or Instagram?
- Video marketing plan including YouTube and video syndication?
- Global marketing plan to reach people who speak other languages?
4. If you were buying a home:
- Did your agent ask to have you pre-approved by a lender?
- Did the agent spend at least 20-30 minutes interviewing you about what is important in your next home?
- On a scale of 1-5, how well did the properties that your agent showed you fit the criteria you gave them including the price and the location?
- On a scale of 1-5, how well did your agent explain the offer and the closing process to you adequately?
- On a scale of 1-5, (5 being highest) rank your agent in each of these areas:
- Negotiation skills
- Problem-solving during the transaction
- Prompt response to my questions
- Knowledge of my area
- Integrity and trust-worthiness
- Supportive, easy to work to with
- Willing to take responsibility when he or she made a mistake
- Closing the transaction.
To really beef this section up, allow verified past clients to post their own video reviews about your performance.
The bottom line is that simple rankings and “star” reviews fall way short of what is possible in this important area.
If you are an individual agent or manager, you don’t have to wait to start asking your clients these questions now. The research shows that merely asking a few post closing questions can give an agent or company approval ratings as high as 95 percent or more.
There’s no better time than now to begin asking your buyers and sellers what they want and need and then doing your best to deliver it.