We have a major fundamental problem within the real estate industry right now. The general public doesn’t think we bring enough value to the table. Are they correct? Service based occupations like real estate agents face competition once value becomes absent. Don’t believe me?
- Travel agents
- Accountants (Turbo tax)
How about the increased competition amongst less expensive options? I just saw this graph from from Zillow’s housing trend report. Besides the fact that Zillow is highlighting information to throw the industry that supports their existence under the bus, it’s the truth. The numbers speak for themselves and are alarming! Roughly 1 in 5 people regretted hiring an agent and wished they did it on their own!
Yes folks, 19% of home sellers surveyed regretted using an agent. This isn’t a real estate problem, this is an industry problem and the exact reasoning behind why all of these “let’s cut the Realtor out of the equation companies” are growing.
Lack of value is the industry’s problem right now.
I believe that the answer to this problem is rooted to how we, as real estate agents, view our occupation. Are we sales people or business people? There is a major fundamental difference between the two and we now face an option as to how to respond to the the increased competition and the “less expensive” options. The public is speaking up and telling the industry to shape up or ship out!
We aren’t entitled to a 6% commission!
We aren’t entitled to be involved in a transaction!
We need to earn it!
The public doesn’t want more real estate sales people. They want more real estate problem solvers. If the industry as a whole began to teach agents to run their practices as small business owners vs. sales people, I believe we will redefine the value a good Realtor brings to the table. The reason for this is simple. Sales people play the short game and business owners play the long game.
Let’s start off defining the main difference in motivation between the two.
A sales person, by nature, is motivated by closed sales and personal gain.
A business person, by nature, is motivated by creating and maintaining the best product or service that can become salable at some time.
Let’s use these questions to spell out the difference in mindset the two may have. You can then use this questions to analyze your own business.
Do You Have A Database?
A business owner has a database of their network. They view their relationships as future business and make staying in touch with their network a priority. They most likely have an email or direct mail list to keep in contact with network. Agents who run businesses tend to host client events, attend many networking functions, and are constantly try to increase the size of their network. Over 60% of business comes from referral or past clients.
A sales person doesn’t care to keep track of a database. If they have one, it’s on a spreadsheet or CRM, but nothing is actively done with it in terms of consistent communication. A sales person does not consistently stay in touch with past clients.
Do You Have A Website?
A business owner has a website they fully control. A business owner constantly invests in working on their website always looking to improve or add value with it.
A sales person may also have a website, but it’s most likely one that was given to them by their broker or a very inexpensive tool. You may have a website but have never once updated it since the time you got it.
Lead Generation Efforts
A business owner measures successful lead generation efforts by how many listing and buyers presentation were given.
A sales person measures lead generation efforts by total number of leads they received.
A business owner believes in enhancing the consumer experience.
A sales person thinks customer service is just in the way they communicate with clients.
A business owner spends multiple hours each week planning on how to leverage into a team and remove themselves from the sales process.
A sales person spends multiple hours each week planning on which lead generating system to use next.
A business owner sets up multiple retargeting campaigns based on content that add value to prospective future clients
A sales person goes right for the opt in or lead on the first shot.
Your Listing Marketing Plan
A business owner has a marketing plan that involves more than an MLS listing, open house, and a sign in the yard. They have a marketing strategy uniquely prepared for each property.
A sales person marketing strategy is the same with every listing they take.
Pricing Your Listings
A business owner has a pre-planned pricing strategy behind pricing their initial offering.
A sales person gets on their knees and preys for a buyer to come.
Your Online Presence
A business person has their Zillow, Trulia, Realtor.com, Homes.com, Facebook, Linked In, and rest of online properties completely filled out.
A sales person has only a couple of these filled out, but none of these are consistent.
A business person invests in an assistant or hires help.
A sales person thinks it’s too damn expensive.
A business owner is constantly investing in their own education and attends training events.
A sales person thinks everything they learned in real estate school was enough.
A business owner has their own branding, logo, slogan.
A sales person uses their brokers.
A business owner invests in their own branded open house and for sale signs.
A sales person uses their brokers.
A business owner sets up a certain percentage of income earned to be reinvested back into their business. They also save money for market valleys.
A sales person uses 100% of their income to pay last month’s bills. They don’t think the market will ever change and typically live month to month.
View On Their Occupation
A business owner genuinely loves what they do and sees their role as one of service who helps people accomplish the American dream.
A sales person views real estate as a job that pays the bills.
Creating Video Content
A business owner looks at video content as a library of marketing material that can be used over and over again sometime down the road.
A sales person views video content as a way to get more leads.
Our industry is in trouble. If we were all ran our business like a business, do you think we would create a better perception of real estate agents amongst the general public? I certainly do. The way to compete today is to define your value and do what Zillow cannot or won’t. Run your practice like a business and you’ll be just fine!