HOW TO CHARGE MORE

Elite Agent - - CONTENTS - Josh Phe­gan

With ev­ery real es­tate agency seek­ing to win more listings, top coach Josh Phe­gan says there are only two ways to in­crease prof­itabil­ity. You can fo­cus on the com­pe­ti­tion, or you can fo­cus on the cus­tomer. But choose wisely, as only one of them is re­spon­si­ble for pay­ing your in­voice.

OUR IN­DUS­TRY is ob­sessed with what the com­pe­ti­tion is do­ing. We still fol­low what oth­ers do, and if some­one breaks the mould, we wait and watch. If it looks suc­cess­ful we repli­cate it fast.

The dis­rup­tors are eat­ing at the edges of our busi­ness, strip­ping away the value propo­si­tion, and it leaves us com­plain­ing that the com­pe­ti­tion is stiff; that it’s hard to com­pete. The ad­vent of lead-gen­er­a­tion web­sites, new mod­els that charge lower fees and pro­vide higher splits, leaves us dazed and con­fused.

The re­al­ity? All of that is a dis­trac­tion, be­cause it fo­cuses on the cur­rent en­vi­ron­ment, on the ‘right now’ cus­tomer. Even the banks are en­ter­ing with full ar­tillery to pro­vide con­sumers with the ‘real mar­ket value’ of their homes. The age-old mar­ket re­port, mar­ket ap­praisal and free as­sess­ment are done.

So how do you win? You put the cus­tomer at the cen­tre of ev­ery­thing you do. It’s called cus­tomer-cen­tric de­sign. You work hard to iden­tify the sticky points, the fric­tion, the things that don’t work; then work out a way to de­liver it so that the cus­tomer finds you valu­able.

The cus­tomer has never ar­gued for a lower fee; they’ve ar­gued for value. In a good mar­ket, agency looks easy. You’ll never know the strength of an agent un­til a mar­ket turns, or they have to ne­go­ti­ate. Any agent who started in the last five years on the East Coast of Aus­tralia has a lim­ited mem­ory of GFC con­di­tions; we’re cer­tainly not headed there, but we are re­shap­ing what it is that great es­tate agents do to earn the right to the cus­tomer.

It comes down to your cus­tomer ac­qui­si­tion strat­egy and, if you think so­cial’s the an­swer, watch your busi­ness fry. What makes a busi­ness move and turn quickly on its head, the type of thing that adds ac­cel­er­ant to your growth, is re­la­tion­ship.

When ev­ery­one is equal on dig­i­tal, which is hap­pen­ing fast, it goes back to the re­la­tion­ship. That’s why those who fo­cus on mak­ing the calls, get­ting in the doors, get­ting face to face, al­ways win.

It takes guts to avoid an in­dus­try fad, an ap­par­ent trend. You must be­come more valu­able. For ex­cel­lent buyer work, it means mak­ing a pest, build­ing and strata re­port (if ap­pli­ca­ble) avail­able from day one to re­duce the buy­ing fric­tion. For the seller, it’s having a buy­ing ser­vice to help them find where they are mov­ing to, as­sist­ing with prop­erty prepa­ra­tion, even send­ing some­one to help have the prop­erty ready ev­ery Satur­day morn­ing for the open.

Peo­ple are time poor; we live in a fast-paced so­ci­ety, a mo­bile so­ci­ety that ex­pects to press a but­ton and just make it hap­pen. You could fo­cus on the cham­pagne you give to the cus­tomer, but isn’t it of more value to send a cleaner round in the hours be­fore set­tle­ment, for both the buyer and the seller? To send the lock­smith to re­place the locks and keys alike for the buyer just af­ter set­tle­ment, and pro­vide a spare key at our of­fice ser­vice to con­tinue that con­sumer re­la­tion­ship with the fu­ture cus­tomer?

The most suc­cess­ful busi­nesses in this in­dus­try fo­cus on the cus­tomer, never on the com­peti­tor, so be care­ful about who you’re try­ing to repli­cate, who you hold up as a role model. You may be fol­low­ing a path into lower fees, lower prof­itabil­ity and pos­si­ble ex­tinc­tion.

The eas­i­est way to drive ser­vice in­no­va­tion is to go through a real es­tate trans­ac­tion your­self from be­gin­ning to end. Look at ev­ery point and ask your­self: what are the things you have to do and how can an agent make that eas­ier, faster, bet­ter? We use a ser­vice called Get­feed­back.com to sur­vey our clients, and the ideas they have for in­no­va­tion on what we can do are as­tound­ing. Pick up the phone and talk with 30 cus­tomers a day; find out what their real chal­lenges are, the block­ages as to why they can’t move, why they can’t sell and so on. Find a so­lu­tion and you’ll nail it. The last thing we need is an­other mar­ket re­port, an­other Just Listed or Sold in the let­ter­box. What we need is a re­la­tion­ship that mat­ters – one that’s built on trust. You do that through be­ing rel­e­vant; that rel­e­vancy de­ter­mines the fre­quency and con­sis­tency al­ways wins in busi­ness. Set your ser­vice de­liv­ery stan­dard; train on the cus­tomer life­cy­cle and what you do to add the value. The true pur­pose of any great agent is to help peo­ple have a much big­ger fu­ture through prop­erty.

The in­dus­try is bright for those who choose the al­ter­na­tive path. Do the work and watch your busi­ness thrive. •

The cus­tomer has never ar­gued for a lower fee; they’ve ar­gued for value.

Josh Phe­gan is a high per­for­mance real es­tate speaker, trainer and coach to some of the best agents and agen­cies around the world. For more in­for­ma­tion visit josh­phe­gan.com.au.

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