Posts Tagged ‘leadership’
NAR We Have a Problem…
Sunday, March 27th, 2011
Just recently my staff and I completed the analysis of an online lead conversion pilot program for a major franchise. The results were not pretty.
The companies and agents who participated were tasked with two things: 1) use my Critical First Response email script for every new online lead, and 2) keep track of the results. That is all they had to do. The purpose of the pilot was to measure the efficacy of this email script. What ended up being measured, however was far more telling.
Of the 48 companies and 832 agents that participated, only 29 and 410 respectively actually completed the six month pilot program. Within the first two weeks we already started hearing that the agents wanted “something more”. This is the “bright, shiny object” phenomenon we actually predicted would occur. Not content with just applying a very simple fundamental principle, they wanted “more”. While some brokers insisted that their sales associates were following the protocols, my surreptitious ghost shopping showed otherwise. In the end the reported data was so poor due to not following very clear and simple rules, that the original intent of the pilot program, testing the email script, was hopelessly lost. This is not a reflection of just this particular franchise, instead this kind of behavior is endemic throughout much of our industry and says a great deal.
Starting at the highest level, the National Association of REALTORS, it says that its stated goal of member professionalism and unspoken strategy of boosting membership numbers are incompatible. Like any other service industry, you can have quality or quantity, but you can’t have both. At the franchise and broker levels, the current business models also reward quantity over quality. Both look to generate substantial revenue streams for providing membership services whether or not high levels of performance and professionalism are maintained.
How can you possibly maintain consistent and high levels of professionalism in an industry with such low barriers to entry, where many (if not most) do not work full time, and accountability is rarely defined or enforced? Clearly the answer is, you can’t.
There is an answer however, and it starts with a vision and commitment to professionalism and dedicated leadership to see it through. Another component that is absolutely crucial is accountability. If I were to start a real estate company today, this is how I’d work with my sales associates:
- Specialization – get each and every one to commit to a speciality that will enable them to stand out head and shoulders from the competition (less than 2% specialize currently).
- Vision – have each one write down what they want from their business in terms of personal fulfillment and lifestyle over the next 2, 5 and 10 years.
- Exit Strategy – have each one clearly define how they will retire from the business in a way that leaves them financially independent.
- Accountability – structure a written accountability agreement that defines minimum standards, methods of measuring progress and consequences (that have real teeth) in the event they fail to be accountable. By the way, this kind of accountability goes for both the sales associates and management.
Would a company structured like this grow very quickly? Probably not in the beginning. However, my many years of coaching tell me there are people who would absolutely flourish in this kind of environment. All they are waiting for is the right kind of leadership to show them the way.
Bright Shiny Objects and Other Things That Glitter
Sunday, May 10th, 2009
This past week alone I had conversations with the senior management of two medium-sized real estate companies that hammered home just how desperate some firms are getting. They each mentioned how they were thinking of training their sales associates on how to use social media (i.e. FaceBook, Twitter, etc.) which of course “everybody” is doing. When asked if their sales people were even responding to the online leads they already had, the answer in both cases was an unsurprising “no”. Hey, if our sales associates can’t figure out how to make it in today’s market, let’s give them some bright shiny objects, at least it will take their mind off the fact they’re drowning…
Giving a Ritalin deficient sales force yet one more thing to distract them from the disciplines of doing real business, is like giving a crack addict a brand new pipe. Social media is not some kind of silver bullet that will solve all their problems. In fact, for most of them it will substantially add to their frustration and probably hasten their exit from the business. “RDR” (Realtors Don’t Read) is common refrain. And if you believe that is true, consider the natural sequitur “RDW” (Realtors Don’t Write). Social media certainly can complement one’s marketing efforts, if (and this is a big IF), one is a very good writer with some semblance of a unique and engaging “voice”. Out of the million or so Realtors still in business I wonder how many fit that profile.
This is just one more example of how typical real estate management responds to desperate times with desperate Hail Mary, spaghetti-on-the-wall measures, rather than with something so few seem to exhibit —leadership.
The Real Crisis in Real Estate
Imploding housing values, constricted credit markets, skittish consumers and an overall deep recessionary economy are simply part of a cycle. A nasty one for sure, but just a cycle. Barring an extinction level event, people will always buy and sell real estate. Currently, sale volumes may be lower and the methods of how we help them with the process certainly change, but business will continue.
There is indeed a crisis in the residential real estate industry, but this current cycle does not define it —it instead has revealed it. Boom times tend to mask flaws. And as Warren Buffet so aptly put it, “It’s only when the tide goes out that you learn who’s been swimming naked.” This market has made it very clear that skinny dipping has been a favorite pastime for the management of most residential sales companies.
Getting caught with your pants down during a market down turn is due to one primary factor —lack of strategic leadership. Having been intimately involved with residential real estate for over 33 years, it has always been clear to me that this is one of the most reactionary industries there is. Strategic thinking and execution are so rare that it almost takes my breath away when I am fortunate enough to witness it.
The very foundation of successful strategic thinking and its execution in this industry is sales force accountability. It doesn’t matter how brilliant your ideas or how shiny the new objects you provide your people. If you don’t hold them strictly accountable to implementing your strategic vision you will fail, every time. Yet accountability is the anathema to the body-shop model of hiring and managing sales associates found in the vast majority of companies. And it is precisely these companies that find themselves in dire straits and most likely to name the economy as the source of their woes.
It was interesting that one of the brokerages I spoke to actually bragged about how they hold their salespeople accountable and explicitly denied providing “bright shiny objects”. Yet when I asked them how they expected social media training would convert to new business for their people, or how they would even measure it, they responded with “We don’t know.” Hey, if it glitters…
The current market cycle is an incredible once-in-a-generation opportunity to take significant market share if only because so many are frantically reacting. To do that requires strategic thinking, superb execution and holding your salespeople accountable. They need to understand that this is a serious business, not a pastime. You can give them that perspective and the means to thrive even in the worst of today’s market. However, if you fall into the trap of providing solace through the glitter of bright shiny objects, you are merely forestalling the inevitable.
