What Do Real Estate Agents Sell?
1. Our time
2. Our knowledge
Those are our two primary assets. Any other response you could possibly come up with fits under these two classifications. These are tangible assets you trade for the money you earn.
Our time
For years, we primarily sold access to consumers. We used our personal bank of time in large quantities to show we cared about a prospect. We would tell them we were available twenty-four hours a day, seven days a week. "You just call, and I will be there." "I am there for you."
Many agents are still stuck in this trap. New agents sell accessibility because they have limited skills and knowledge. The problem is when we gain the skills and knowledge we are too scared to take the professional approach to business. I believe we have a larger group of 24/7 agents than ever before.
Access does not equate to value. It's also not a way to create differentiation from other agents. We only look like everyone else when we do that. A Champion Agent doesn't tread the same path as all other agents. A Champion Agent's time has tremendous value. Access is the most common way that agents try to convince people to hire them. My competition in real estate sales was always trying to paint a picture of me as unreachable, unapproachable, and too busy; that their 24/7 access was superior to my professional office hours approach to business. I was quick to point out that if their approach was indeed better, then their results should also be better, which they weren't. They also connect access with a higher level of concern or care. Yuk! I care so much for my clients; I take time off, so my family life is sound; I'm recharged for the next week of work, so I can do the best job for my clients.
Champion Agents don't have enough time to work with everyone they come in contact with. They are focused on working with only the highest level of people they can provide service to. By only working with the highest level, it saves them time. The time saved can then be spent on another person. There are really three categories of people you can invest your time in: Prospect, Customer, and Client.
The Prospect: This is a person you are investing your time in with the hope of moving him to a client. Prospects need to be evaluated based on their level of probability of generating a commission check. There are four key evaluation questions:
How much time will you have to invest? The amount of time might be the same, but one prospect will commit and buy or sell now. Another will be six months away. The one who is six months away has less value. I didn't say "no value", I said less. Too many things can change in six months.
How much effort will it take? What kind of energy and effort will you expend to transform this prospect into a client? Just as many other Champion Agents do, I preferred working with sellers because of how long and how much effort it takes. I found the control, timeframe, and effort was significantly less representing the seller, rather than the buyer.
What are the odds of them becoming a client? The Champion Agent evaluates the odds continually. Low odds prospects create low odds commission checks. Are your odds better than 50/50? If they aren't, you will need to question why you should proceed forward in servicing them.
What is the long-term residual value? The purpose of a real estate practice is to generate long-term residual value from your past clients and sphere; to provide a service level that encourages repeat and referral business. Some people have lower long-term residual value because of their behavioral style, sphere of influence size, types of jobs, and outside interests. The question is; is this person you are investing your time in an AAA referral source or a D level referral source?
Too many agents provide too much service to prospects in hopes they will miraculously become clients. My view is that prospects are worthy of limited amounts of service. The length, duration, and quantity of the service you provide them must be limited. You will notice I didn't say quality of the service. My belief is the quality of the service must be at the highest level. The adjustments come in how long they will receive this high quality service. If you degrade the quality of your service, you will look just like all the other agents vying for their business. The quality must be at the level you would provide for a client. The key question is, "Do you want to continue receiving this market knowledge, responsiveness, and expert counsel long-term?" If the answer is "yes", they must become a client.
Our job, in sales, is to attract prospects and convince them to become clients. The natural tendency is for them to want to stay as a prospect if their motivation is low. If their motivation is mid-range, they want to become a customer. If their motivation is high, and you have tangible benefits that point them to why they should hire you, they will want to become a client.
The Customer: I am going to be bold in my stance with customers. Customers have limited value. In a service business, customers can pay the current bills, but that's it. A customer has limited residual value. You can earn a commission check if all the factors are aligned in terms of timeframe, motivation, and market conditions. If you are an agent who has hit a plateau at a specific production level for the last few years, it's generally because you have been working with too many customers, not enough prospects, and not driving the prospects to client status. It's easy to get into the habit of just working with customers; you don't have to prospect as much. It feels like you are making progress, but you are only treading water.
I also believe it is more difficult to move a customer to a client position than it is to move a prospect to a client. The prospect, if done correctly, knows they will lose quality services if they don't commit to exclusivity. Provided that they want and desire your exclusive quality services, you can move them to an exclusive client relationship in a short period of time. The customer that has been receiving valuable services for a long period of time, but has not been asked to make a decision of exclusivity, will become confused when, in their mind, all of a sudden, you change the rules on them. Moving a prospect to a client is easier than moving a customer to a client. Most people who hang out at the customer level will never make an exclusive commitment to you. In most cases, they are unwilling to commit to anyone.
The Client: This level of person has exchanged commitments with you, preferably in written contract form. They expect counsel, guidance, service, and the fiduciary duties of an agent. They are willing to trade commitments of loyalty and exclusivity because of the advantages you create for them in the marketplace. You provide them representation, counsel, knowledge, interpretation of the knowledge, analysis, and greater equity or money. They know they have the edge over the competition of other buyers and sellers because they are working with you.
Because the selling game in real estate has changed significantly in the last ten years, the advent of the Internet has lessened the monopoly of MLS information. The consumer has access to real estate information in local markets at similar levels to the agents. The media has been on a rampage in the last half dozen years about how we should be charging less and our value is diminished because of the technology changes in information about houses for sale, transaction management advancements, and the propagation of discount real estate models. Working with clients is more important today than in the history of real estate sales. How we position our time, knowledge, and connect them to value will determine whether we achieve a Champion Agent's production and quality of life.
Our knowledge
I think this is the area that really separates Champion Agents from everyone else. Champion Agents sell their knowledge and, specifically, the value of their knowledge more effectively than even great agents do. This is the arena that needs dramatic improvement. Intelligent people who are forward thinkers will pay for knowledge. One of the fastest ways to increase your leverage, earnings, and quality of life is to use other people's knowledge to get there.
If we can clearly demonstrate for a prospect that our knowledge gives them an advantage in the marketplace, they will be more likely to quickly decide to use us as their service provider. Most agents are unable to convey how their knowledge creates an advantage for their clients. If they are able to accomplish creating some kind of inside track to the client, it's relationally based. Too many agents rely too much on the relational connection rather than "expert" connection. A Champion Agent works to establish both.
A Champion Agent's knowledge creates quantifiable benefits to their clients. By empirically proving your advantages to prospects, customers, and clients, you raise the probability of your success.
A Champion Agent's knowledge translates for their clients as:
- More money for the sale of their home.
- More efficient, less hassle transaction.
- Better strategic positioning of their property to attract more buyers.
- Stronger property demonstration to enhance value and sale price for their sellers.
- Effective price verses value counseling.
These are examples of tangible benefits that clients receive from Champion Agents. This is merely a short list to use as an example. We have identified well over thirty clear benefits that clients receive from Champion Agents with ways to prove them empirically.
All these above services relate to dollars in your client's pocket. All these are achieved through the value of your knowledge and skill. That's what separates the Champion Agent from the others.
Published: September 17, 2010
