Selling Soulfully with Jennifer Allan

Picking up from yesterday's blog about my agent friend Sam who was referred to a seller who "has a friend who will list it cheap," let's talk about how Sam should handle the whole issue of commission, knowing that his competition is in all likelihood going to charge less.

The question I signed off with yesterday was something along the lines of should Sam address the issue of his competition's lower commission head-on?

In my opinion, no. He should not. Why?

Because, the only way to "address" it would be to criticize it. And that's not cool. Any overt attempt Sam makes to come out on top in a battle of commissions is going to make him look bad.

First, Sam would be criticizing the seller's friend, which in all likelihood will not endear him to the seller, even if he happens to be right in his criticisms. But not only is he criticizing a friend of the seller; he's also subtly criticizing the seller's own judgment! After all, the seller is considering hiring this friend, so if Sam tries to argue him out of it, he's basically telling the seller he's wrong... which rarely goes over well.

Besides, Sam has no idea what level of service the seller's friend will provide. Maybe she'll cut her services, but maybe she won't. Coming from a background of owning a full-service discount brokerage, I can say with all sincerity that it IS possible to run a profitable, full-service real estate business while charging less than the competition. Unless Sam has full knowledge of the other agent's marketing plan, he has no business putting it down.

So, what should Sam do if he wants a shot at this listing? Well, it's pretty simple. He should go into the listing appointment with the heart of a consultant. He should ask a lot of questions and really listen to the answers. He should show empathy for the seller's situation, and be able to provide solutions to any problems they uncover. He should be intimately familiar with the seller's neighborhood and conversant about local market activity. He should demonstrate an ability and willingness to help the seller get his home ready for market.

In short, he should do his best to win the seller to his side by being friendly, helpful, creative and knowledgeable.

And... what if, after all this friendliness, helpfulness, creativity and knowledgeability (?) the seller chooses the friend anyway? No biggie. Sam can walk away with honor, knowing he gave it his best shot, and that he made a positive impression on one more human being on the planet! And you never know when that will come back to bless you!

Got a question yesterday from an agent who was referred to a potential seller by an acquaintance.  However, the acquaintance warned the agent (let's call him Sam) that the seller has a "friend who will list the house really cheap," so Sam may not have a chance at procuring the listing.

Sam asked me how I would approach the situation - how would I respond if the topic of commission comes up in their initial phone conversation? And how would I go about persuading the seller that I'm worth my "full" fee and that the "friend" may not even be worth her discounted one?

Wanna know what I told him? Okay, twist my arm.

First, I always recommend that we be upfront about what we charge if asked. I don't believe in deflecting the issue because it puts us in the position of being a salesperson instead of the professional advisor I feel we are. So, if Mr. Seller were to say "Sam, what do you charge to sell a home?" I'd advise Sam to answer the question without hesitation. No hemming, no hawing, no creative avoidance. Just get it out there on the table.

"My fee is X% to sell a home, which includes the buyer agent's fee of Y%"

If the seller responds with "Well, I have a friend who will do it for X-minus-2%..." Sam can say: "That's great - and that might be the best deal for you. But I'd still be happy to get together and talk about your situation, so you can be sure you're making the right decision. No pressure, I promise. And I'll respect whatever decision you make."

Reverse psychology ("that may be the best deal for you") works great here!

If the seller agrees to meet with you, that means he's probably open to paying your fee, if you can prove you're worth it.

And as you probably know if you read much of my stuff, that's a BIG DEAL to me - actually being WORTH the fee you charge... and knowing you're worth that fee. Getting the point of being and knowing you're worth it might take some time and soul-searching, but it's well-worth every minute.

(And by the way, BEING worth your fee has nothing to do with how much you NEED that fee).

Anyway, I digress.  Next question - once you're face to face with the seller - should you address the issue of your competition's lower fee head-on?

Whatcha' think? (I'll share my thoughts tomorrow.)

I can't tell you how many letters I've gotten recently from good agents who are quietly considering throwing in the towel on their real estate career - NOT because they can't drum up enough business, but rather because they can't keep the business they've drummed up together. In other words - they find their buyer a home or get their listing under contract and then BAM! The deal comes crashing down at no fault of the agent. Lather, rinse, repeat. After two or three or six or seven of these crashed deals, it's understandable that the agent might wonder if it's really worth it.

I certainly would... and did.

My first career right out of college was in the Employee Benefits industry - specifically health insurance. Back in '89, group health insurance was pretty basic - most employers offered a traditional 80/20 plan with a deductible. PPO plans were fairly new on the market (PPO = Preferred Provider Organization - you received higher coverage when you used preferred providers, but you still got decent coverage if you used "your own" doc), but they worked pretty well. HMO plans (HMO = Health Maintenance Organization - you HAVE to use network doctors or you get no benefits) were on their way, but weren't widely purchased yet.

I was an account manager for a rather prestigious book of business in San Francisco, Nevada, Utah, and later, Colorado and Nebraska. Among my clients were Korbel Winery, The Men's Warehouse and Oracle. I flippin' LOVED my job. And, humility be damned, I was really good at it.  

Why did I love it so much? Well, it was a lot like selling real estate, except I didn't have any sales responsibilities. As an account manager, I was a teacher, a negotiator, a problem-solver, a hand-holder and a talk-off-the-ledge-r. I had a monster to-do list every day and I reveled in staying at the office til every single item was completed.

I LOVED it.

Well, in the early 90's, HMO's became the latest & greatest option in the health insurance world. Our sales reps were hugely bonused for selling them and employers loved the lower costs. Suddenly, I had a book of business full of HMO plans, which, unfortunately, no one fully understood, not even the claims processors. It was my job to explain the complicated concept to employees and human resource directors, and then to solve their problems when they inevitably didn't use the system right.

It was a nightmare. AND NO MATTER HOW HARD OR SMART I WORKED, I COULD NOT MAKE MY CLIENTS HAPPY.

I HATED it.

Does this sound at all familiar? It does to me. This is how the real estate market feels these days. Used to be we could solve most problems, talk anyone off the ledge and keep our deals together using our brains, skills and expertise. But today, many agents feel out of control.

Are YOU still having fun in your real estate career? If so, any sanity-saving secrets you'd like to share with the crowd? Or conversely, wanna vent YOUR crash-n-burn story? We promise to be good shoulders to cry on...

And fun was had by all (well, I had fun anyway) on Wednesday evening in the SWS Studio! My four esteemed guests, Lenn Harley, Robin Sherman, Karen Rice and Renee Burrows gathered around the virtual table and answered all your questions about how exactly they generate good business from the Internet. Okay, well, that's a lie - they didn't answer ALL your questions - not even close. Even though the show ran the full 90 minutes, I came away with five pages of listener questions we weren't able to get to.

If you missed the show... well... darnit. You can go HERE to see Renee Burrows' recap of the questions asked and how she answered them. Speaking of Renee, you can also go here to learn more about her online strategies, written of course, in her delightfully irreverent style (e.g. "Get Your Blog Freaky and To the Floor"). I plan to hang out there quite a bit today - maybe we'll run into each other.

Anyway, at the end of the show, I promised to post the unanswered questions to my blog and allow my guests (or anyone else who wants to contribute) the opportunity to respond.

So... here we go!

Tom asks: "Where do you find the Google webmaster?" (referenced by Lenn as THE SOURCE for all things Google)

http://www.google.com/webmasters/

Jenny & Anonymous ask: "How often should you write or post something to your blog?"

Donne asks: "Renee - what are your syndication sources?"

I believe they've connected on this offline, but the rest of us would love to hear, too!

Donne Knudsen comments: "I find that I spend a lot more time and energy converting internet leads compared to the time and energy it takes to convert a referred lead."

Great point! Would love others' thoughts on this. 

Jenny asks: "Do any of the speakers hire out their online lead generation work or do they do it all personally?"

Nathaniel asks: "Is internet marketing targeted towards brokers only or can real estate sales persons take advantage of marketing on the net without any conflict from the broker?"

Doug asks: "Can we see some examples of good real estate blogs?"

Here are the blogs of our speakers who blog, but please feel free to add to this list!

Renee Burrows: http://activerain.com/blogs/lasvegasrealestateforyou
Karen Rice: http://www.pikewaynepablog.com/
Lenn Harley: http://activerain.com/blogs/lennharley 
 

Phyllis asks: "Other than Active Rain, where do you post your blogs?"

Anonymous asks: "Based on the leads that come online and register - how long will you stay in contact with them - 1,2,3,4 months? .... Before they actually buy... at what point do you give up on someone?"

Ruthmarie asks: "Regarding pay-per-click, did using pay-per-click help you get your site/blog established? Or did the results go away once you stopped using it? In other words - can I use PPC to establish my site and then stop and continue to see results?"

We had a lot of questions about IDX and although we tried, I'm not sure we answered them satisfactorily for many in the audience. The main question was "What's the best IDX" or "What IDX do the speakers recommend?" Our answer was that it depends on your local MLS as to what IDX(s) is/are available to you, and whether or not your board even allows broker reciprocity. Some attendees commented that their broker don't allow individual agents to have an IDX on their websites. Any thoughts or comments on this?

On a related note, Vickie asks: "I'm an agent with the largest real estate brokerage in the metro Kansas City area. Every agent has a personal web page with IDX. What would you recommend I do to stand out & drive business to my site?"

GREAT question!!!

Dolores asks: "Do you recommend showing or not showing the property address on your IDX feed site?"

Dixie asks: "What quanity of leads do the participants receive on monthly basis? What percentage turn into closings?"

Kevin asks: "What about successes with specific targeting of small markets or is your focus broad based in larger geographic areas?"

Nishika asks: "How important are the graphics (maps, stats, charts) used in blogs? Any recommendations on vendors who create them?"

Tonda asks: "Is Karen using her personal facebook or does she have a business fan page?"

Jenny asks: "Do you update the information on your websites on a regular basis?"

Maureen asks: "Do you recommend using your own name for your real estate website?"

Karoline asks:  "What one thing would you say makes your website a success in gaining business from the website?" and related: "What do you find reaps the biggest reward for your time, updating the website, blogging,etc....?"

If you'd like to respond (and please do!) to any or all of these questions, just copy & paste 'em to your comment. Feel free to add links to your heart's content if they're helpful in the context.

THANKS!!!

What does it mean to "get business from the Internet?"

I dunno. I've never really done it, as a real estate agent anyway. Oh, sure, I get a hit every now and again from my (nearly abandoned) real estate blog, my Facebook page, and my www.CharmingOldDenver.com site, but it's certainly nothing I could live on.

I've half-heartedly experimented with various online lead generation systems and tools ($1800 here, $275 there) and haven't seen squat for my efforts or dollars. So, when I hear agents claim that they get "most of their business online," I have to admit I'm a bit skeptical... and admittedly a little envious.

So, with the goal of enlightening myself and my beloved readers, I've put together a panel of experts to tell us all exactly how they "get business from the Internet."

Lenn Harley, Karen Rice, Renee Burrows and Robin Sherman will be joining me in the SWS Studio on Wednesday, February 17th to spill the beans on the what's, where's, why's, how's, etc. of generating real estate business online. They may not tell us ALL their secrets, but if you're as clueless as I am about concept, I'm sure you'll know a whole lot more AFTER than you did BEFORE.

It's a freebie show, so if you have time in your crazy calendar, please stop by. You'll have to register to get access - Just Go HERE.

It's Wednesday afternoon/evening, starting at 4pm (Pacific) / 7pm (Eastern).

REGISTER HERE! 

I'm on a ranting roll this week and it's only Tuesday.

My friends... let's stop complaining about "working for free." Let's stop proclaiming that we need to better protect ourselves from the home-buying and -selling public who live to abuse our willingness to do work "without any guarantee of compensation." 

WE DON'T WORK FOR FREE. WE WORK ON CONTINGENCY.
There's a big difference!

Our willingness to work on a contingent basis - that is - to not be be paid until or unless we perform, is precisely WHY real estate fees are what they are. We are able to charge a lot of money to do what we do, far more than we could charge if we were paid by the working hour or by the job, upfront.  

Working by contingency is risky. And when something is risky, it means, by definition, that there's risk involved (duh). In our industry, the risk is that we may not be paid for our efforts. No, we don't much care for that outcome, but it's the chance we're willing to take to be able to charge the hefty fees we do when we're successful.

If you don't want to work on a contingent basis, you're welcome to find a different model that better suits your personality. There ARE other models out there - Mollie Wasserman's ACRE program is a great one, and there are hybrids where you reduce your fee in exchange for a retainer or upfront marketing fee.

But if you, like most of us, enjoy the challenge of shooting for the sweetest possible payday, stop worrying so much about those "wasted" hours!  As long as you were doing something that taught you more about your real estate market and/or put you in front of a warm body to impress with your wonderfulness, you weren't working for free. You were just building up credits toward that next sweeeeet payday!

Rant over.

I read a featured blog the other day written by an agent who was regretting not insisting on a buyer agency agreement and was subsequently ditched by the buyers she was working with. She was disappointed, and in her blog, reconfirmed her commitment to always get that agreement in place before investing much time in a new buyer client.

Fair enough. I disagree with the agent's conclusion that the solution to being ditched by a buyer is a written contract, but that's okay. To each his own.

But one of the many comments on the blog caught my eye. It was something about how now that we're in a new decade; it's a perfect time to set new priorities. In this case, the commenter meant that he or she intended to be even more committed to getting those agreements signed before working "for free."

Again, fair enough.

But it occurs to me (yep, here comes a soapbox) that it would do us and our industry far more good if we set our priorities a little higher. If we set them based on what the customer wants and needs, rather than on what we want and need. Don't get me wrong, I'm all about looking out for #1, but when you put your customers first, my experience has been that Your Favorite Real Estate Agent benefits right alongside!

So... how about instead of making it a higher priority to be more diligent about contractually obligating your buyers to you... you commit to making yourself indispensable to your buyers so that no contract is necessary?

How about instead of making it a higher priority to more efficiently beat the streets looking for more and more and more and more listings... you commit to figuring out how to sell the listings you already have?

If we shift our industry's priorities away from the face in the mirror and focus them on the consumer we're licensed, hired and well-paid to serve, I promise you we'll all benefit. Our buyers will buy and our listings will sell, so we'll attend more closings and see more repeats & referrals.

It really might be that simple!

RELATED BLOGS
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Any idiot can give his house away...

(Before we officially get started, I must note that as of this moment, I have 999 subscribers to my blog... who will be Number 1,000?!)

Now back to our regularly scheduled program...

Last year, I "spoke" via video at the 2009 Real Estate Cyber Convention & Expo about my favorite topic - "Selling to Your Sphere of Influence - No Sales Pitch Required!" It was my first ever such project and while I, of course, saw all the flaws and flubs and fly-away hair-do's, it apparently went over quite well.

So well, in fact, that the Real Estate Cyber Society (the nice folks who put on the Cyber Convention & Expo) asked me to be a Keynoter at this year's event! This year's topic? "No More Doom & Gloom- Let's Get Ready for the Real Estate Boom!"

The Convention & Expo starts on February 21st and runs through the 27th. It's an online event (thus the word "Cyber" in the event name), so your admission fee gives you free access to all the festivities day or night. There are four Keynoters (me, Lawrence Yun, Michael Russer and Randy Eager), along with at least 50 other well-known speakers, including Dave Beson, Dirk Zeller, our very own Jeff Turner, Jim Kimmons, Mollie Wasserman... and a whole bunch more.

You can also visit dozens of cyber "booths" where you can register to win prizes and free goodies, just like a real convention - except that you don't have to leave home to attend! (Now that's MY kind of event - convention-ing in jammies!).

I think there are special offers if you register early - a discounted price and some free bonus goodies. I also have a limited number of free passes ('cause I'm so special) that I'll think of some creative way to distribute.

But anyway, just wanted to share the news with my AR friends - hope you'll stop by and see me at the 2010 Cyber Convention!

I'm doing a little one-on-one consulting with a relatively new agent (who's gonna ROCK!) in Denver. We have similar personalities when it comes to our feelings about prospecting and business-building, so our conversations about prospecting always lead to some interesting A-HA moments for both of us.

Anyway, yesterday, my agent friend told me about a conversation he had with a like-minded career coach - one who specializes in matching personality types with business-building strategies. According to this coach (and my friend's score on the MBTI), my friend is capable of cold-calling and door-knocking for business, and he might even be rather good at it, as long as he feels he has something of value to offer.

HOWEVER, the coach cautioned him that even though he might be moderately successful in his cold-prospecting efforts, his personality type is simply not one that tolerates rejection well over the long term. That if he spends too much of his time and energy on prospecting activities that involve a steady dose of rejection, he'll eventually become depressed and discouraged. And probably won't realize why he's so lethargic and unenthusiastic about his career... and his life.

That makes perfect sense to me! I've been preaching for a long time now that there's no reason to spend your days doing something that you aren't comfortable with when there are perfectly acceptable alternatives. And if there AREN'T perfectly acceptable alternatives, maybe you're in the wrong business!

The good news is, of course, there are plenty of real estate prospecting techniques that don't involve much rejection. Oh, sure, rejection is a part of life, but that doesn't mean you have to put yourself in positions of pursuing it in the name of generating business if you don't want to. There's no need to "suck it up" or "just do it" if the sucking-up or just-doing makes you miserable.

Life's way too short for that. Figure out what you enjoy doing that brings in business. Do that. It really is that simple.

RELATED BLOGS: 
Be Yourself... Have More Fun... Sell More Real Estate! 
Stay IN Your Comfort Zone!
When to Venture Out of Your Comfort Zone... and when to stay in

It's Here!!!! 
The Sequel to Sell with Soul
Own one of the first 1,000 copies printed, numbered & autographed.
www.SWSStore.com

Over the last few weeks, I've posted blogs about the concept of the Salaried Real Estate Agent. You can click here and here to catch up if you like.

Most who commented on my blogs didn't much care for the idea. And that's cool - it's what I expected.

But the negative comments really got me to thinking.  What's so darn special about OUR industry that the business model used by most other industries couldn't possibly work for ours? And let's be honest, our industry isn't exactly setting the world on fire with the retention and success rates for our practitioners...

Just so's you know, I like being paid on contingency - always have. My first real job was waitressing and I loved the idea of working for tips. My last job before I went into real estate was as a "outside SERVICE" representative in the employee benefits field where I was paid a salary + bonuses for every client I SERVICED (hold that thought). I liked those bonuses, so I took on as many clients as they'd allow, to the point where I had twice as many as any other SERVICE rep. Loved it.

In that employee benefits job, there were sales reps and service reps. The sales reps did what you'd expect them to do - they lunched, schmoozed, networked, cold-called, warm-called, popped-by, mass-mailed, advertised, etc. We service reps managed the business the sales reps brought in - as soon as the ink was dry on the contracts, those clients belonged to us, and the sales rep moved on to the next prospect.

The system worked well. The salespeople made rain; the service people took care of the customer. We service reps didn't just work 9-5 - it was in our job description to accommodate our clients even if that meant doing onsite employee meetings at 3am for the night shift. We had our own window offices and secretaries and expense accounts. We flew on corporate jets with our clients. Many of us had advanced industry-specific licenses. We were professionals.

But we weren't salespeople by any definition of the term. We SERVICED the business the sales force brought in and were well-trained (and well-paid) to do it. We were respected by the salespeople and by our clients (well, most of the time!) and didn't consider ourselves glorified assistants. None of us (as I recall) had any desire to move into sales - we were perfectly happy and satisfied working our a$$es off to fulfill the promises made by the rainmakers.

So, when I claim that a salaried real estate office could work - this is the model I'm referring to. Natural salespeople do what they do best... and what they enjoy. Natural servicepeople do what they do best... and what they enjoy.

Getting business ... and taking great care of that gotten business are two very different skill sets. Both are valuable and necessary to a successful business, whatever that business may be. Yes, even the real estate industry!