Over the last few years, the market has provided the growth impetus even for the most average of agents. Now things have changed.
A great self-reflection question to ask yourself is, ‘Why would my business grow this year?’
There are, in my view, two types of businesses. Some are devoid of structure and process, and are linked to the ebbs and flows of the market; others have structural and measurable components that can be adjusted and redirected to create growth regardless of the cycle.
As I have mentioned in previous columns, days on market greatly affect the performance of a real estate business. A blow-out of days on market by 10 actually has a negative impact on a business by up to 30 per cent.
So what are your structure and processes? And how do you handle it when traffic (number of buyers) come out of the system? Are you reallocating your resources, particularly your man-hours, to where the blockage in your business may be occurring?
How do we find these hours – and do we redirect them in a way that continues to create momentum in the business and supports around controlling days on market?
Let’s look at a practical and logical example: when the market was strong many agents could expect, say, 15 to 20 people through their OFI. (Yes, I know many people from regional Australia are now laughing at that number; my continuing criticism of contextual real estate coaching in this country is that, in my view, it is aimed at major Eastern seaboard cities.) If I had four opens every Saturday I was looking to process between 60 and 80 potential buyers every Monday, which could take – with callbacks and vendor reports – anywhere between six and 10 hours.
With that number now dropping to five, which I was told very recently, it may only take me two to three hours to process my opens. All of a sudden I have found between four and six hours of efficiencies in my business.
The big question is: how do I redirect those new-found hours?
What becomes challenging for businesses that don’t have measurement capabilities is they often become unsure where to redirect those hours. Do we use them to drive traffic back into our systems – for example, spend those four to six hours ensuring that we get quality numbers through our opens? Do I use those hours to have more in-depth and structured conversations with my owners about where they are positioned in the market? Do I use those hours to build greater collaboration with my database?
I do know that to be successful in these more challenging environments we will need to be ruthlessly efficient with our time and detail does matter.
Our evidence shows that in challenging markets (thanks to all my colleagues in WA) there is a 30 per cent higher clearance rate with a quality vendor report. When vendor meetings are at the forefront of your process, ask yourself: Are these forming part of my weekly routine?
An exercise that I would encourage you to do is get someone to read your vendor reports prior to you sending them to the owner. Ask them to read the reports without the knowledge of price and from a vendor’s perspective; remember, people view things through the lens they are currently using.
Often what they read into a report and what we want them to read into a report are vastly different.
Referring back to the question of where my growth comes from, my growth will come from redirecting hours into the stock-out component of my business. It continues to amaze me how much the markets have changed, yet the day-to-day actions of the agents haven’t.
In finishing, I will leave you with this thought:
People viewing a house that’s overpriced are just traffic. Remember, the vendor turns the traffic into buyers.