Be six months ahead of the competition
Whether you’re with a major franchise, a small indie brokerage or an agent who would like to increase your business in 2018, there’s only one question you need to ask about the strategy you choose: “Does it increase my market share?”
As Wall Street and the real estate media salivate over Compass, iBuyers and the never-ending claims that the latest whiz bang tech company will soon put agents out of business, I came to an important realization several days ago.
The name of the game in real estate still comes down to two simple words — market share.
The Compass mink coat strategy for growing a real estate company
It’s hard to ignore the fact that Compass just got a record-setting $450 million investment.
While the press lauds its technology, its initial success seems to have resulted from using hefty signing bonuses and other perks to recruit top-producing, luxury agents.
This model for growing a real estate company dates back to the 1970s when Harleigh Sandler Real Estate (the precursor to today’s Rodeo Realty and Berkshire Hathaway in Beverly Hills) rewarded its top producers with mink coats and lavish Caribbean vacations.
This approach is still going strong today in companies that provide high commission splits, private offices, plus robust marketing allowance to lure top agents.
In fact, some brokers shell out so much money, that these top agents leave the brokerage with virtually no profit.
But here’s the reality: Compass faces exactly the same issue that has vexed real estate brokers for over three decades: We create all these great tools for our agents and almost none of the agents use them!
Reports from the street say Compass agents are doing business the same way they did at their previous companies. So how valuable is all that cool technology if the majority of their agents aren’t using it?
A proven approach that works for both agents and brokers
For 18 years, I worked for Jon Douglas Company, first as an agent and then as an executive director of training for the company’s 4,000 agents. Jon (Jack) Douglas founded his company on three core principles:
- Do the right thing.
- Deliver the most professional, concierge service to every client, regardless if their property was a $50,000 condo or a $50 million estate.
- Market share (listings) is the name of the game.
The result? During the 1990s, we became the most productive company per agent in the country, with over 50 percent market share in Beverly Hills, Brentwood and Bel Air, repeatedly hitting $1 billion in sales per month.
How agents can win the market share game in 2018
After a competitor stole the new agent training program that took me a year to write, Douglas gave me an important piece of advice that has shaped my business ever since: “Bernice, the copycats will always try to steal from us. All we have to do is to be six months ahead of the competition, and we will dominate the market.”
Here’s how to implement these guidelines in 2018 for your business:
Be the consummate professional
The best way to demonstrate your professionalism is to use video testimonials from previous clients, especially if they explain how you solved a thorny transaction problem.
Supplement these videos with free reports from HomeDisclosure and NARRPR.com to further enhance your professional expertise in the eyes of your clients.
Deliver concierge-style services
Be available when your clients need you and have resources for everything related to your clients’ move from contract to post-close.
Make sure that you have a list of vetted, quality service professionals who you can rely upon when your clients need help. (HomeAdvisor.com is an excellent resource.)
Create dominant market share
Individual agents build market share by becoming the go-to expert in a specific market niche. The Sanborn Team is an excellent example of this approach for probate.
Be six months ahead of the competition
Dominate the competition with tools such as Matterport VR virtual tours, artificial intelligence (AI) based CMAs, chatbot lead conversion systems and translation of your listings into 18 languages (realbuzz.com).
During your listing appointments, explain how these tools provide the seller with maximum exposure to the marketplace, which results in the maximum price.
10 ways brokers can win the market share game inexpensively
Recently I interviewed Valerie Torelli of Torelli Realty about how she had maintained no. 1 market share in Costa Mesa, California, for over 30 years with less than 15 agents.
Here are the tips she gave me that you too could use in your business:
- Define your core values, and live by them: Torelli’s core values are based on “The 4 C’s” from the book The Four Agreements: A Practical Guide to Personal Freedom by Don Miguel Ruiz: “Commitment, connection, compassion and community.” Create a culture of “paying it forward.”
- Be an advocate for your agents: Torelli said, “My agents don’t work for me — I work for them! I have to earn that part of the commission they give me. If they have a problem, I always have their back.”
- Be geo-specific: Use title company records to track which areas are experiencing the greatest turnover: “Don’t fish where there aren’t any fish,” Torelli said. Make sure you choose an area that is all single-family homes rather than mixed use.
- Teach your agents how to do a simple net sheet: This consistently converts listing appointments into signed listings for Torelli’s company.
- Be available to mentor your agents and empower them to make their own decisions: “Don’t come into my office unless the problem has four figures ($1,000 or more). You make the decision!”
- Embrace change to create a competitive advantage: “As a small brokerage, we can turn on a dime while our larger competitors cannot,” she said.
- Protect your culture: Avoid hiring any agent who is in it for himself or herself or the money. Instead, look for integrity and someone who will contribute to the camaraderie in the office.
- Create a one-year and a five-year business plan: Torelli likens this to using your low versus your high beams on your car to see where you are going.
- Give back to your local community: Torelli’s company contributes 5 percent of its net profits to local charities including funding a local school program that teaches students to code.
- Establish best practices for your brokerage: Include being consistent, showing up and being honest and open. Also, be quick to fire and slow to hire.
As an agent or a broker, there are many ways to build market share — which ones will you choose in 2018?
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books.