Scenes From Above

A Little Bit About Ashtabula and Ashtabula County, Ohio

Larry — Sat, 06 Sep 2008 08:51:38 GMT

Here's a nice video showing what it's like in Ashtabula, Ohio:

Photography for Real Estate

Larry — Sat, 06 Sep 2008 08:47:36 GMT

What if Listings were Irrelevant?

Larry — Sat, 06 Sep 2008 11:38:36 GMT

Here’s a question that’s certain to be avoided by the real estate industry: What are you planning to do on the day that “taking a listing” becomes totally irrelevant? It’s coming, of course, and it’s not just because of a “housing recession” or any such calamity. Real estate based upon consumer needs, not actual “listings” will be the focus of the Next Generation of Real Estate.

And clearly nobody is prepared.

Look at the design of the real estate industry today. Everything is based upon listings:

The commissions is based upon the listing price
The broker’s revenue is based upon their local listing averages
We hire “listing agents”
A Multiple “Listing” service dominates our data management
Our websites all put “listings” front-and-center, not services
We award “top listing agents”
We build business plans around the “number of listings” we’ll take

And so on. The entire industry revolves around an inhuman item: the house. And every activity we conduct is based upon that item - not the consumer - because it’s the listing which determines the revenue. And revenue is the bedrock of business (as it rightfully should be).

The trouble is that an entire new generation of real estate consumers isn’t listing-focused. In fact, they are afraid of listings being the focus because it distorts the process. First, there is the pricing problem: Moving a market based upon the “listings” that are currently represented by brokers, in the MLS and appearing online is ineffective. It has more negative than positive effects. For sellers, the potential price of their home becomes determined by the so-called market forces of “what other comparable homes are priced for” by other agents in the local guild. Except that we all know agents are mostly terrible and usually awful at pricing. They either overprice it - which provides a false-value picture of the home and causes it to sit and not sell - or they underprice it because they just go with the “flow” rather than use other techniques that might cause “above market” offers to come in. Nobody tries *not* pricing homes and simply marketing them and seeing what people are willing to pay. Auctions are rarely used - even frowned upon. Pricing solely upon solds is rarely done, even when the property is an expired - which clearly indicates the previous agent had no idea how to price (or market) it. And lastly, most REALTORS simply ignore the 20-30% of the market that is “for sale” right now but “not in MLS” - the For-Sale-By-Owner whose property is WELL KNOWN to the buyers, and therefore affects their concept of market value.

Listing-focused real estate is also challenging the entire “commission” structure of the business. For example, why does the guy with the home valued at $2 million dollars pay more for the same laundry list of services that the guy whose house costs $200,000 pay? None of the answers has to do with the property: In fact, luxury real estate is selling at a better clip than lower-priced-properties right now because the wealthy recognize it’s already a good time to buy! But beyond that, the challenge for REALTORS is the perception of the cost of the commission as determined by the cost of their home. Today’s sellers are not just Baby Boomers any more - they are GEN X’ers . And no matter how you slice it, he’s going to wonder why it takes $60,000 worth of equity to sell his $2M home. Today’s seller is smart! They know they are subsidizing a lot of broken practices and bad habits of the broker and agents. He’s subsidizing the other poorly priced and marketed listings in the broker’s inventory. He’s even subsidizing a portion of the entire local REALTOR industry’s inefficiencies in finding buyers. And explaining all of that is going to become increasingly difficult to the next generation of consumers.

Operating a brokerage based upon listings-determined value might also be a loser in the future. Already it completely distorts the recruiting efforts at a company. Brokers hunt for listing agents - because they think you have to list to survive. Except that the last three years have proven the folly of a listing-based revenue model: ANY person can list a home if they have a license and simply agree to spend the broker’s money on the price and marketing strategy set by the seller. (Read that last sentence carefully.) But that’s just a formula for creating brokerage expenses - advertising, for example. Recruiting should focus on finding agents who can find buyers, just as well. And not those re still doing postcard mailings, unattended open houses and newspaper ads.

Even if you wanted more listing agents, how about finding those who can simply find good “deals” - such as properly-pricable, quickly-sellable, buyer-attracting inventory? Not just those who bring home all sorts of bad listing deals and expect the broker to sign on.

A cost analysis of operations based upon listings is equally scary. One of the most significant costs for a broker is the increasing costs of operation based upon the increasing inventory of homes listed. This starts with the “MLS membership” fees that are incurred for every agent. The more agents, the higher the membership costs. Add in more listings, the higher the MLS entry-fees. So if a broker is “successful” according to today’s standards - recruiting more agents and getting more listings - his costs go up simply to provide access to a database whose only changing values are usually one data element: the price. To add insult to injury, the broker oftentimes has to pay for access to a database of inaccurate property descriptions, poor marketing information and cockeyed photos - created mostly by his ill-trained competitors. And then he’s supposed to agree to place their less-than-stellar information on his well-designed website because he’s agreed to “be friends” with everyone in the guild. Everything about today’s MLS driven, listing-oriented operational model is expensive, old-fashioned and bankrupt.

It can’t even be argued that these fees create more revenue opportunities, because the systems are so restrictive. Countless agents tell me they “can’t put more photos online because their MLS only accepts X number of photos.” Who’s setting the standard of performance - MLS or the consumer? So we have another a cost that the future consumer will no longer be willing to subsidize. To them, putting listing data and photos online is FREE because they can do it themselves at Yahoo or Craigslist or on a personal blog. They can’t understand why brokers actually pay to have such a system - and they most certainly don’t buy the argument that it’s “more accurate” because buyers see the same (awful) content that comes from so many MLS systems into REALTOR.COM every day.

Let’s take one more stab at the listing-focused folly of our industry. It’s a conceptual one now - so get ready.

There is no such thing as a seller.

Ok, deep breaths. Think about it. Home owners are only sellers for about one minute. During that minute, they make the emotional decision to move from their present location to a new one. Then, they instantly transform into buyers. Their entire focus shifts from their present home to the one they will live in next. That’s why they are so irrational about pricing their homes - they want the most amount of money to spend on their next home, new furniture, etc. They resist improving their current home by painting or landscaping or de-cluttering it because they aren’t focused on selling - they are buying!

And then along comes the listing agent, who spouts off a list of listing services and selling activities. But the seller-really-buyer’s attention is already elsewhere. Visions of their future home already dominate their imaginations. Showings, open houses, cleaning, staging - they don’t want to pay attention to these things because they have already mentally moved out. Yes, they understand they may need to “sell before they can buy” but their focus is definitely on the buying stage.

It’s no different than trading your car for a new one; a quick car wash and vacuum the rugs is all you’re willing to put into the existing car. But you’ll haggle for the highest trade in value because you want to apply it to the snazzy new one you’re already mentally buying in your mind.

An industry focused on the listing of homes is psychologically disconnected from the consumer. As such, its value proposition wanes and its operational model breaks. And that’s why today’s real estate brokerage models aren’t working even with historically low mortgage rates. Not because lending is more stringent or inflation is rising - they are always factors to deal with. Some brokers sold record numbers of homes at a time when there was virtually no credit and mortgage rates were in the 20% range. So that can’t really be the only excuse today.

There are lots of people who extract revenue from real estate transactions - and earn fees. These are non-listing-focused businesses. For example, flat-fee buyer’s agents. Attorneys. Marketing firms. Management companies. None of these charge according to the “price” of the actual listing that is purchased.

But “buyer agency” isn’t the turn-key solution. It’s about seriously asking what is of value to the person who is buying or selling? Because there will still be homes to be sold. And we have to determine whether the consumer wants that value directly related to the price of the “listing” involved - or something else. Ironically, we might even be able to charge more than what we’re charging today, if we disconnect the value of our services from the value of the listing.

Two hundred years ago, when textile factories replaced the cottage industry of hand-sewn clothing manufacture, the market “focus” when from the “item” produced to the “consumer” purchasing it. Once that happened, more people made more money more efficiently. It’s time for that to happen in real estate, too.

I’m willing to agree that we don’t have all the answers. But perhaps all we need to do is at least ask the questions. Because nobody else is. And the consumer is reaching a turning point - in demographics, economics and perception - that is about to throw the entire listing-centric system right out the window.

The Flood of Pre-Photokina Announcements Has Started

Larry — Fri, 05 Sep 2008 08:24:00 GMT

Photokina, the mammoth photo equipment show held every 2 years in Cologne, Germany is coming up September 23 through 28. So every company that makes anything to do with photography times many of their new product announcements so they can show them off at Photokina. If you were thinking of purchasing equipment it makes sense to hold on to you credit cards until after Photokina to see what’s new and when all the announced products will be available. (more…)

You Can Try Glass Before You Buy It

Larry — Fri, 05 Sep 2008 05:53:41 GMT

My theory is that, in real estate photography, your lens is the most important piece of equipment. And many times, your high quality ultra-wide lens, is the most expensive equipment you purchase. One of the best ways to decide which ultra-wide-angle lens you want to purchase is to rent it before you decide to purchase. You can rent many of the lenses I have listed in my lens table for a few weeks to make sure it’s the lens you want. Prices are reasonable. (more…)

Timothy Armes Announces LR/Enfuse 3.0

Larry — Wed, 03 Sep 2008 17:22:32 GMT

Tim Armes recently announced his latest version of Lightroom/Enfuse 3.0. For those of you that are not familiar with LR/Enfuse take a look at my post back in March of this year on LR/Enfuse. In summary, LR/Enfuse is a Lightroom plug-in that provides a convenient interface onto the open source Enfuse application, which provides excellent blending of multiple exposures of the same scene into one final image. (more…)

Meet the New PFRE Idol: Linda Sabiston

Larry — Mon, 01 Sep 2008 17:42:43 GMT

The PFRE Idol voting results are in and Linda Sabiston, of Sunshine Coast, BC (flickr handle: Coastalpics ) is the winner of this months PFRE Idol contest. Congratulations Linda! This is indeed a very special image! I has a combination of soft, even lighting inside and nicely exposed windows. Linda said she knew this image was special as soon as she made the shot.

Linda’s winning shot above, was shot with a Nikon D40/Sigma 10-20mm/SB-600, with a Gary Fong Lightsphere, used on-camera, late in the day. To see the entire shoot of this property see Linda’s complete tour for this home. (more…)

Scheduling- Your Chance to Provide Great Service

Larry — Sun, 31 Aug 2008 18:11:29 GMT

A couple of weeks ago a reader was lamenting the difficulties he was having with agents canceling shoots or rescheduling at the last minute and asked me if he should enforce 24 hour cancellation policy.

Scheduling shoots with real estate agents has got to be one of the most challenging and irritating parts of real estate photography. To appreciate the root of the problem you need to understand the home seller and their situation: (more…)

Bang! Internet Marketing is Dead!

Larry — Sat, 30 Aug 2008 13:22:16 GMT

It’s official. Internet marketing as you know it died today. One of the internet’s largest social network sites finally killed one of the internet’s largest search engines as the “eyeball attractor” for display ad views. Although it got little news, this mighty accomplishment may be the herald of a major shakeup for online commerce.

Consider yourself forewarned: Everything you thought about internet marketing to-date is now old news.

According to Reuters, MySpace officially overtook Yahoo as the leader in online ad displays in June. Here’s their scoop:

SAN FRANCISCO (Reuters) - Yahoo Inc has lost its lead of the U.S. market for online display advertising to MySpace and its parent company News Corp’s Fox Interactive Media and MySpace, new industry data shows.

Fox Interactive’s collection of sites, led by MySpace, drew 56.8 million advertising views in June, compared with Yahoo’s group of sites which had 53.1 million, according to data from Web audience measurement firm comScore this week.

Ironically, the article can be found on Yahoo’s network, but no matter. Perhaps that will be Yahoo’s new role - pushing articles and text; it certainly isn’t the first sign of struggles at the “granddaddy” web portal.

The larger point, however, is that social networking has finally reached a benchmark that allows itself to assert, with economic validity (not just sophistry), that it’s a serious force for e-commerce. To date, MySpace still doesn’t get the high-dollar advertisers that Yahoo or Google pulls in, but that may all be changing. Even as YouTube struggles to monetize it’s network through high-cost display ads, the MySpace accomplishment creates new momentum for an entirely different mode of future internet success. One which just may challenge “leaders” like Google, Yahoo and others.

For example, if social networking starts to out-sell search advertising consistently, then say good-bye to all the SEO optimization strategies. And it’s about time - since it’s all mostly hocus-pocus anyway. Nobody really knows how it all works, so any money you spend on it is only one-step removed from roulette. Who cares if you come up first on Google, when you may be more likely to be found through a “referral” link from a friend-of-a-friend on a MySpace or LinkedIn? Why spend millions on pay-per-click when a few (free) kind words on Facebook can send lots of relevant traffic - from one person who already likes your service to all of their friends to try your service - for pennies or less. Internet marketing suddenly becomes less about who is searching for you, and more about who is talking about you.

And that’s something that the search engines really can’t control. So it will be harder for them to make money off of it. If blogs and social network recommendations - from friend-links to outright referrals - become strong sources of new business, there is no longer any point to fighting for keywords or placements on search portals. In fact, being “first” becomes almost irrelevant in a social-network-dominated marketing game. More important will be the status of being “most” - such as most linked, most distributed, most referred.

This has dramatic implications for the entire internet commerce structure. Marketing dollars may actually shift back from “search relevancy” to “CPM” display. Rather than paying Google or Yahoo for ad placement, companies may pay bloggers and well connected social network profiles to feature their display ads; or simply to blog about them. Paid sponsorship comes back - and not just from Ed McMahon or sports celebrities. Everybody has the potential to be a paid endorser for products and services they believe in - and are willing to tell their friends all about.

For many companies, new marketing opportunities will be unleashed. For example, a company with 50 employees can suddenly create 50 new marketing channels - through 50 profiles on one social networking site alone. And with display ad monetization, it can be both a new business and direct revenue channel for almost any organization. Bloggers are already doing this with relevant ads on their sites. But it’s going to get even harder for that model to work, as Safari and Internet Explorer 8 continue to make “private surfing” a new catch phrase for browser features. No longer can Google simply scan your cookies and serve up the right display ads. When browsers go dark, and surfing becomes secret, the ad-relevancy model becomes extinct. Domination of keywords and relevancy-placements by companies with huge budgets to out-bid smaller competitors on Yahoo or Google will also diminish, if not disappear.

For some industries, it’s a marketing dream come true. Take real estate, for example: Most sellers choose their agent through a personal referral or using their last agent again. Not from websites or direct email or newspaper ads. Referral networking offline has always been the number one source of new business for most brokerages; now it will have the opportunity to be so online as well. Imagine the millions to be saved by companies pouring pay-per-click dollars into cyberspace when they can monetize their existing customers already support them through “word of mouth.”

A watershed moment has occurred in the e-commerce world. We may not even realize it right at this moment. But as the generations of consumers continue to shift slowly, inexorably from Seniors and Boomers to Xers and Yers, the mode of marketing will continue to move. It went from newspaper to radio, then to television and finally online. Now, online, it’s moving from “where do you want to go” to “where do you live online.” Get ready for socal advertising to explode the online marketing concepts as you know it. Today’s Googles may be little more than giggles when the online consumers decide they’d rather ask their friends for recommendations than some get the opinion of some local-yokel Yahoo.

- Matthew

Bang! Internet Marketing is Dead!

Larry — Sat, 30 Aug 2008 06:22:16 GMT

Consider yourself forewarned: Everything you thought about internet marketing to-date is now old news.

According to Reuters, MySpace officially overtook Yahoo as the leader in online ad displays in June. Here’s their scoop:

SAN FRANCISCO (Reuters) - Yahoo Inc has lost its lead of the U.S. market for online display advertising to MySpace and its parent company News Corp’s Fox Interactive Media and MySpace, new industry data shows.

Fox Interactive’s collection of sites, led by MySpace, drew 56.8 million advertising views in June, compared with Yahoo’s group of sites which had 53.1 million, according to data from Web audience measurement firm comScore this week.

- Matthew

Don’t Forget to Vote for This Months PFRE Idol

Larry — Sat, 30 Aug 2008 02:31:20 GMT

Just a reminder that tomorrow (Sunday, August 31) voting ends for this months PFRE Idol. This is a great exercise in critical evaluation of real estate marketing photos. Remember when voting these are marketing photos. Also, it’s the photographers skills we are evaluating, not the property. Here is the info you need to vote:

This months entries to vote on are here
Here is where to vote - You must be registered to vote.
Here is where to register

Insights From Hiring Real Estate Photographers

Larry — Thu, 28 Aug 2008 06:53:19 GMT

Because there have been several times this year that I couldn’t get up to Issaquah to shoot my wife Levi’s listings, Levi hired various real estate photographers in the Seattle area too shoot some of her listings. Being able to observe the whole process of hiring and getting results from real estate photographers from the receiving end of the process has been very insightful for me. (more…)

Avoiding the Industry Disaster

Larry — Wed, 27 Aug 2008 08:06:33 GMT

Just how close is the real estate industry to duplicating the disaster achieved by the airline industry? Contrary to popular belief, neither industry has been challenged by serious technology developments that have created “alternatives” to their essential model. People still fly on planes. Most consumers work with agents. Yet anyone who has had to deal with either industry lately knows that REALTORS are coming dangerously close to recreating the airline industry’s sub-lawyer-sub-car-salesman reputation.

For REALTORS, it shouldn’t take much to avoid that fate. But we must act now.

Our concern must always be how the two industries come dangerously close to being similar to each other. Obvious examples come to mind: Inept real estate agents sometimes remind us of the drones of emptiheadedness that airlines put behind the counters at the gate. Agents saying “all buyers are liars” reminds us of how close we’ve come to that exasperated agent who says, “If i have to tell one more person that the flight was cancelled, I’m going to scream…” as if all passengers had the same telepathic schedule-updating implants that the airline industry obviously installs in the heads of its gate attendants.

Still, the similarities are instructive because REALTORS can still step back from the brink. Airlines are already over the edge. A recent call to a major international airline went like this:

“Thanks you for calling…. if you are calling about your frequent flyer miles account, press 3… thanks for calling the frequent flier account department. Please call this other 800-number. (dial number). Thanks for calling the frequent flier account department. If you’re calling because you’re a SUPER DUPER frequent flyer, please call THIS 800-number. (dial number). Thanks for calling the SUPER DUPER frequent flier account department. If you want information about your account, press 3.” FINALLY a live person: “Oh, sir, I’m sorry you’ve lost your frequent flier account number! If you’d we can provide it to you. Just fax us (yes, that’s FAX) your account number, name and social security number, and we’ll send you back your number and your PIN.”

I tried four times to see if she understood what she had said. Then I just hung up.

The lesson for REALTORS is this: If you’re still making it IMPOSSIBLE for consumers to get the simplest of information (the address of a listing comes to mind…) then you’re delivering the kind of “service” you get at an airline. If you require the consumer to fill out forms before you talk to them, or jump through a variety of strict communications hoops (like calling you, when they want to do IM with you…) then you’re not connecting with the consumer, you’re turning them off.

Every industry encounters bumps: Airlines cancel flights because of weather. REALTORS can’t sell homes because inflation is stalling the economy. Both homes and airline tickets are priced in dollars, so economic factors are always a consideration. On the other hand, I don’t get why both industries still make it so hard for consumers who are trying to pay them to actually do so…

For example: Some airlines now “hold” certain seats in the coach section of the plane for “premier” purchase or special customers. It’s an immediate turn off to not only put me in coach, but to then tell me there are even “more special customers” in coach than me. It’s insulting, and no way to build a rapport (or loyalty). If you hold seats for your customers who travel a zillion miles, then just upgrade them to business or first class. Leave the common customers amongst themselves - and treat us all equally - and, perhaps, with just a little courtesy. And for goodness sakes, take our money when we try to pay you! Don’t tell me a seat isn’t available when I can see it on my screen: I know you’re hoping Mr Moneybags will book it last minute, but I’m trying to pay you NOW! What’s the logic in putting off-limits one of the two seats next to the window (in a two-seat isle)? If two common customers try to fly together, only one can get the window. The other either has to pay THREE TIMES for the “premium seat” (at which point he should fly first class) or they have to split up. Now how is that supposed to encourage couples to take a vacation - especially in tough economic times. If we make the decision to fly on your plane, then sell us the seats in the back equally and fairly.

REALTORS do the same thing: which is why they court disaster like the airlines. The parallel experience to the “seat hoarders” in the airline industry are the “information hoarders” in the real estate business. A common example is that consumers who call a REALTOR will generally get them to tell you useful, helpful information about a property. Try to email one, and you largely get ignored, or at best, a choppy reply (usually ALL IN CAPS) that mostly says, “Call me and I’ll tell you the rest of the story.” Like the off-limits seats to the common people, differing levels of service to the consumer who chooses to inquire by email rather than drop into your office (or sit in your car, nice as it is) creates no less of a turn-off in the public’s mind.

Unfortunate parallels continue to plague the two industries. Recently I was on the phone with an airline who said they were charging a $20 call center fee for me to book over the phone; because the trip was complicated, I decided to talk to a person - worth the twenty bucks. Ironically, the price quoted on the phone was seven hundred dollars less than the price quoted on my screen. Bad information on their website almost caused me to go to another vendor. REALTORS should consider that when it’s not uncommon to find listings whose prices aren’t accurate, photos are from the last season or the scrolling-banner advertises an open house date from last month. If you’re using information to attract and sell to customers, it had better be right (and easy to get).

I think the airline industry is, for the most part, only a half-step behind the domestic automobile manufacturers. Their level of quality, service and customer relationship has fallen so low, that unless you “really have to” you’d much rather walk than give them your dollars. Exceptions are there, but mostly rare. A few good pilots or a cheery gate agent can’t erase years of customer neglect. Neither can one top producing agent, surrounded by dozens of deal-killers. Charging for checking your bags - or a lousy bag of peanuts - adds insult to injury; much like charging your full fee when you only delivered partial service. Consumers get it, and they’re becoming tired of getting it, you know exactly where.

REALTORS have one tiny advantage over the airlines: Most real estate consumers only use their services ‘rarely’ over their lifetime. Maybe 3 or 4 times at best. Airlines torment customers frequently, as travel by air is a regular occurrence for most people every year. Yet that “time interval” may be changing, as trends for younger buyers indicate earlier first-purchases mean more repeat incidents over their lifetime, and perhaps over shorter intervals.

Ironically, it wasn’t technology that doomed the airlines: Nobody invented the transporter or an alternate form of travel that challenged their fundamental product. It was their people and processes that because so self-centered that the customer was merely an afterthought. Even with Southwest’s example, the rehabilitation of the industry’s reputation is a clear impossibility. Same is true for the real estate industry: Regardless of the proclamations heard at speakers-who-are-really-paid-sponsors conventions, there really isn’t a technology disruption that’s pushing the industry to the brink of disaster. It’s always the people and the process.

Keep in mind: Both the airlines and the real estate industry call their most public-facing people their “agents.”

Avoiding the Industry Disaster

Larry — Wed, 27 Aug 2008 01:06:33 GMT

For REALTORS, it shouldn’t take much to avoid that fate. But we must act now.

Still, the similarities are instructive because REALTORS can still step back from the brink. Airlines are already over the edge. A recent call to a major international airline went like this:

I tried four times to see if she understood what she had said. Then I just hung up.

Keep in mind: Both the airlines and the real estate industry call their most public-facing people their “agents.”

Photography For Real Estate E-book Improvements Coming

Larry — Tue, 26 Aug 2008 03:06:28 GMT

I’ve been working hard this summer on the second edition of my Photography For Real Estate e-book. I’m going to make several improvements in both the content and the way I distribute this e-book: (more…)

Six Cool Ideas to Boost Agent Productivity

Larry — Mon, 25 Aug 2008 08:15:21 GMT

Why do some agents make more sales than others? What makes some agents capable of creating sales when others struggle for a single lead? Contrary to popular belief, it’s not a cool web tool or a more expensive marketing plan. Almost always it comes down to a single, consistent factor, no matter what company or place in the country:

A great manager.

As we’ve said before in this blog, most agents work too hard. Real estate is the simplest sales business made unnecessarily challenging. The proof is in the production pudding: Walk into any office and the usual “quartile” of production is apparent: 25% of the agents do 2-4 times as much production as the next three quartiles put together. The top quartile generates more than $100,000 in gross commissions, while the next quartile averages around $46,000. Below that, the production is around $12,000 or nil. Your choice, but it isn’t pretty at the bottom.

Traditional wisdom says the top 10% does 90% of the business. Most likely that’s true. But what the wisdom doesn’t say is why. At least, it doesn’t say so correctly.

The talking heads usually attribute agent productivity to the “inner agent.” Some kind of “high producing spirit” that inhabits the body of top producers, while the rest remain walking zombies bereft of productivity. Certainly, some degree of high-energy entrepreneurial spirit causes the top achievers to push more production. But the numbers often tell a different story. Top producers aren’t necessarily top performers - margins for top producers are lower because they often spend more to generate the business (top producers are often top postal mailers, too!).

Either way, there still exists a group in the top segment of the office that producers or performs higher than the rest. Why do they do it - and how can managers learn to duplicate it in the rest of the sales team? Actually, if you simply ask the top producing agents, they’ll tell you - because we stick them on “panel discussions” all the time at conventions. Now if managers were listening, here’s what they’d hear (Hint: it boils down to: I did everything you told me to do!):

Make the agent create a business plan. It doesn’t have to be elaborate. Income goals, hours to be worked, average deal revenue, number of deals needed, expense limits. It’s important for the manager to align the plan to the company’s mission and goals - assuming we’re on the same team here - but without a plan, there’s nothing for the agent to “refer to” when they look at their progress. Goals are critical. Written goals are golden!
Provide the agents with some standards of performance. Give them guidelines on how much “tolerance” the company approves on pricing listings, spending marketing dollars and working with buyers. Identify the expected activity duration for prospecting a single lead - and average response rate (speed) the agent is expected to respond to online inquiries. Set out the number of photos to be placed online, standards of writing ad copy, etc. When managers outline clearly the expectations and degrees of performance for agents, it’s easier for them to work toward them - and know whey they are (and are not) achieving them.
Create a professional development path. Conduct an assessment of the agent’s abilities relative to the company standards of performance. Then create a custom training path for that specific agent. Ask the agent to create a schedule to take training - which the company usually provides or can be had at the local Association quite cheaply - and then have them post it into a calendar. Schedule in advance a time to review their progress. If you’re serious about making the agent productive, then spot them the money for real courses - like CRS, WCR and CRB stuff (oh, and our stuff too :>) - and let them pay it back off of their increased productivity.
Go to work with the agent. Spend a day or two or three or four with the agent. Watch them work; work with them. Go to a sales presentation, open house and a few showings with them. Just watch - then provide suggestions to them (afterwards, not in front of customers). Management’s job is to identify performance gaps - so it needs to evaluate them, usually by watching them happen - and then provide coaching to help them improve. If you have 20 agents in your office, that’s only 80 days a year; 100 agents might take your entire schedule. But that’s what managers are supposed to do: but you can only manage the performance by being there with it. Ever see an orchestra conductor lead a symphony from behind the stage?
Draw some lines. Much like creating and communicating the standards of performance for pricing, listing, marketing and prospecting, managers can help agents improve dramatically by drawing some lines in the sand behind which “non performance” will not be allowed to fall. One important area is to draw a line on minimal technology usage: Kick the agent out of the office and don’t let them come back without a laptop, digital camera and Blackberry. Even the plumber shows up with his own wrench! Draw the line, too, on how many times you’ll let the agent skip floor duty, not show up for the office meeting (without a good closing as an excuse!) or not work the phone-inquiry properly. Sometimes, the best productivity boost comes from knowing that someone is “watching” our performance - and will hold us accountable, even if that means simply “calling us out” on our lackadaisical ways!
Praise them publicly. Real estate is an ego driven business. Hard work pays off - often quite handsomely. But it’s also kudos that agents seek. It doesn’t mean you have to provide extra money, gifts or even awards. A simple, personal recognition at the office meeting goes a long way. Spotlighting them in the company newsletter or even in a local press release will put stars in their eyes. Praise goes a long way to motivate people: More money is easy to come by but the admiration of our peers and leaders is priceless.

Bringing out the top performance in your agents - all of them, not just the inner-motivated ones - isn’t rocket science. But it is management science. Even well equipped, the unguided sales person will falter - now knowing where to go, how to get there and whether they’re doing it the right way or not until they don’t hear your praise but your disapproval. By then, it’s often too late to boost their productivity, or possibly save their careers at all. It only takes six simple steps to start agents down the right path - but it needs a manager to do it right from the start.

Six Cool Ideas to Boost Agent Productivity

Larry — Mon, 25 Aug 2008 01:15:21 GMT

A great manager.

Traditional wisdom says the top 10% does 90% of the business. Most likely that’s true. But what the wisdom doesn’t say is why. At least, it doesn’t say so correctly.

Make the agent create a business plan. It doesn’t have to be elaborate. Income goals, hours to be worked, average deal revenue, number of deals needed, expense limits. It’s important for the manager to align the plan to the company’s mission and goals - assuming we’re on the same team here - but without a plan, there’s nothing for the agent to “refer to” when they look at their progress. Goals are critical. Written goals are golden!
Provide the agents with some standards of performance. Give them guidelines on how much “tolerance” the company approves on pricing listings, spending marketing dollars and working with buyers. Identify the expected activity duration for prospecting a single lead - and average response rate (speed) the agent is expected to respond to online inquiries. Set out the number of photos to be placed online, standards of writing ad copy, etc. When managers outline clearly the expectations and degrees of performance for agents, it’s easier for them to work toward them - and know whey they are (and are not) achieving them.
Create a professional development path. Conduct an assessment of the agent’s abilities relative to the company standards of performance. Then create a custom training path for that specific agent. Ask the agent to create a schedule to take training - which the company usually provides or can be had at the local Association quite cheaply - and then have them post it into a calendar. Schedule in advance a time to review their progress. If you’re serious about making the agent productive, then spot them the money for real courses - like CRS, WCR and CRB stuff (oh, and our stuff too :>) - and let them pay it back off of their increased productivity.
Go to work with the agent. Spend a day or two or three or four with the agent. Watch them work; work with them. Go to a sales presentation, open house and a few showings with them. Just watch - then provide suggestions to them (afterwards, not in front of customers). Management’s job is to identify performance gaps - so it needs to evaluate them, usually by watching them happen - and then provide coaching to help them improve. If you have 20 agents in your office, that’s only 80 days a year; 100 agents might take your entire schedule. But that’s what managers are supposed to do: but you can only manage the performance by being there with it. Ever see an orchestra conductor lead a symphony from behind the stage?
Draw some lines. Much like creating and communicating the standards of performance for pricing, listing, marketing and prospecting, managers can help agents improve dramatically by drawing some lines in the sand behind which “non performance” will not be allowed to fall. One important area is to draw a line on minimal technology usage: Kick the agent out of the office and don’t let them come back without a laptop, digital camera and Blackberry. Even the plumber shows up with his own wrench! Draw the line, too, on how many times you’ll let the agent skip floor duty, not show up for the office meeting (without a good closing as an excuse!) or not work the phone-inquiry properly. Sometimes, the best productivity boost comes from knowing that someone is “watching” our performance - and will hold us accountable, even if that means simply “calling us out” on our lackadaisical ways!
Praise them publicly. Real estate is an ego driven business. Hard work pays off - often quite handsomely. But it’s also kudos that agents seek. It doesn’t mean you have to provide extra money, gifts or even awards. A simple, personal recognition at the office meeting goes a long way. Spotlighting them in the company newsletter or even in a local press release will put stars in their eyes. Praise goes a long way to motivate people: More money is easy to come by but the admiration of our peers and leaders is priceless.

In Pursuit of The Money Shot

Larry — Fri, 22 Aug 2008 06:13:02 GMT

In real estate photography there’s one shot that is as important as all the others put together. It’s also called the primary exterior shot. Most MLS’s require it to be an exterior shot. It’s the shot that grabs the buyers attention and motivates them to look at the home in more detail. (more…)

More Meaningless Marketing

Larry — Thu, 21 Aug 2008 11:05:41 GMT

When I read this headline this morning, I immediately thought of that Britney Spears song, “Oops! I did it again!” Once again, another real estate company is reporting some “numbers” designed to get people - consumers, agents, Martians - to gasp. Seems like their website has generated some few millions of “leads” to their agents. You know, buyers who go on their website and ask for more information. It’s another orchestrated PR campaign to get the public to say, “Wow! That’s a lot! It must mean they are really good!”

Too bad, then, that it’s just another example of totally meaningless marketing. What’s worse: Generation X and Y know it.

I never understand why real estate company marketing departments feel compelled to release numbers - usually just because they are big. Are more leads better? Possibly - but if anyone knows, it would be Matthew Ferrara & Company. We have helped more than agents (a big number!) worldwide adopt and implement some of the most advanced leads management software in the last four years. We have literally delivered more than training webinars (do you want to know how many? It’s big!) in that time to the agents, brokers, relocation directors and managers of these companies. We’ve seen the reports and we’ve seen them way agents treat (and sometimes mistreat) leads. In the end, we continue to say what we’ve already said:

Most companies should brag about the number of leads they generate. That is, unless they really convert a good solid percentage of them.

Oh, we get it: Releasing your lead generation numbers is very wink-wink nod-nod. Some marketers love to do this kind of marketing, called “associational” relevancy. They combine two concepts - a large number and a seemingly important criteria of success - and then turn it into a sign of “prowess” in an industry. For example, Ford sells more cars than anyone in America (or they did for some years). But does anyone really want a Ford car? Not at all, if you look at their loyalty repurchase rate, say, compared to Honda, Toyota or Mercedes. So the “volume of a criteria” is frequently a shallow factor of competitive performance.

The same is true for the number of “leads” a company generates. It’s a totally meaningless sign of performance of a website’s ability to help you achieve the only thing that matters in real estate: Selling the home.

Why do they do it? Two reasons: First, it’s supposedly a way to “recruit” agents. A company must be more attractive to agents if it generates more leads - business opportunities - than its competitors, don’t you think? No, we don’t. Who cares if a company generates a lot of inquiries that a) their agents are ill-trained to respond to and b) their agents are unable to convert because they are poor-quality. It’s like competing on the number of listings a company has: Another meaningless number, because any fool can take a listing if they don’t feel like fighting the seller on setting an appropriate price and not marketing in the newspaper. Sorry, folks: Neither number is meaningful.

If I’m an agent, I want to know the quality of the business opportunities generated by my brokerage firm. In other words, my time is valuable; I only get paid if I can apply my skill to real business opportunities. If my broker generates a lot of un-targeted, ill-qualified, busy-making leads that take up my time, then is he really helping me? Not at all. What agents really want to know is the quality of the leads generated, which is wholly indicated by the percentage of leads that are converted into transactions within a sensible time period.

Of course, the conversion ratio will be significantly affected by the ability of that company’s agents to convert them. But there’s a direct correlation between the conversion rate and the skill level of the company’s agents and managers. So a company that converts a higher percentage of leads can very accurately be said to a) be generating more quality leads, b) the training effectiveness of the company and c) the management coaching and accountabiity performance. In other words, converted leads are a sign of a healthy, productive organization. Lots of low quality or generated-but-abandoned leads isn’t so good; but that’s why they only market the “number” of leads generated.

Ironically, agents understand all of this. Especially Generation X and Y agents. They aren’t so willing to accept “any” marketing message. When they decide which brokerage to affiliate with, they are looking for real results - of a company’s marketing, training and management - not just how much busy work it creates. But brokerages aren’t ready or willing to compete on these criteria; for now, they’re still in a “we’ve got more of everything” mode of recruiting agents.

The second reason companies spout these meaningless metrics is that they somehow believe the public will be excited by them. Once again, they are sorely misguided. Today’s sellers are more tech savvy than ever. And they understand the difference between fluff and results. Sellers don’t care how many leads you generate: They care how many buyer inquiries you can turn into buying events - for their house. In fact, super-savvy sellers are likely to have an opposite reaction to the higher number of leads. For example:

You mean you have to generate that many leads in order to sell the number of houses you sell each year? That sounds awfully inefficient!

Generation X and Y sellers will put you in a no-win situation. If you “promote” that you generated 5 million leads from your website, then could easily say, “That’s all?” especially when they see the number of daily visitors to Amazon or Google. Conversely, they could justifiably say, “If it takes that many leads to create your deals, then you must be pretty poor at marketing because even goofy websites like YouTube generate more business opportunities than that!”

Eventually, the real estate industry will learn that meaningless numbers create meaningless value statements in the marketplace. The endless war between “which company has more” leads, websites, listings, etc., continue to distract companies (but not the consumers) from their real mission: to create the “most” meaningful events, which are sold homes. Some companies say they can do both. We’re not so sure. If they did, they’d be better off releasing their competitive metrics, not these silly stats. Tell the public what percentage of inquiries you turn into deals, what number of listings you sell at above 98% list-to-sell ratio, and how many you sell below the average days on market of the competitors.

Those are performance numbers worth marketing. And that’s the only thing consumers find meaningful.

More Meaningless Marketing

Larry — Thu, 21 Aug 2008 04:05:41 GMT

Too bad, then, that it’s just another example of totally meaningless marketing. What’s worse: Generation X and Y know it.

Most companies should brag about the number of leads they generate. That is, unless they really convert a good solid percentage of them.

You mean you have to generate that many leads in order to sell the number of houses you sell each year? That sounds awfully inefficient!

Those are performance numbers worth marketing. And that’s the only thing consumers find meaningful.