The Elements of Success
I make it a point to refrain from any discussion surrounding commission rates because, after all, there is no set percentage. It is up to each company to decide what they feel their services are worth. Our company made the decision many years ago to provide a comprehensive service that was based on several key elements; knowledge of the marketplace and skill in negotiating being just two. For a new agent on the hunt to develop his or her business, it is a no brainer. Get the listing at whatever the cost. But I believe it is a short-term solution that will only hurt you down the road. I have said it on many occasions, if you negotiate your commission you are simply joining the race to the bottom and once you are there it is a long arduous task to get to the top again.
Recently the National Association of Realtors reported that Realtor use in the US is at a ten-year high. I believe it is a clear indication that the trading of real estate is getting harder, not easier. While we have been lucky enough in Canada to enjoy a rather long period of sales prosperity, don’t forget that real estate is cyclical. What goes up must come down or, hopefully, just level off. If and when that happens, selling a property will be a lot easier with a skilled agent working for a seller.
A few weeks ago I had an agent come into my office with a rather common problem. He wanted to reduce his commission in order to get a listing. We sat down and had a rather lengthy discussion. As managers, it is our job to reinforce our company values, our skill set and our value proposition. All great buzzwords and I know that I can deliver the message effectively but I wanted some extra ammunition so I decided to do a little research. Here is what I can add;
Successful presentations ( and for that matter- negotiations) are based on four key elements.
First, EXPERIENCE. During the recession of 2008, the New York Times reported that many affluent people didn’t curtail their spending significantly. What they did do was become more selective. Their decision to buy something or hire a service was based on one key question – is it worth it? Ask yourself if you are providing your client with solid expertise, then show them what you do and deliver on your promises.
Second, EXCLUSIVITY. People always want what others aren’t getting. Some of the most successful brands in the world are so because they are considered ‘cutting edge’. Invest in the high-tech. Develop that niche approach to your business and be authentic.
Third, ENGAGE. Your clients want to know that you can handle their business and the best way to do that is create an honest narrative of your abilities and that of your company. People like a good story, so tell one that is compelling.
Fourth, EMOTION. The point of the first three elements is to evoke a positive emotional response with your clients. It’s that ‘Ah-ha’ moment when the client realizes that you have let them in on a very powerful tool….you.