The last 18 months have seen an upturn in activity for a good many (though not all) agents, and after a difficult few years following the post-2007 downturn, it is heartening to see the survivors enjoying healthy results. But this doesn’t mean things are plain sailing, and new market conditions present new challenges.
Stock is hard to come by and as a result completed transactions in the early part of 2015 are down 18% year on year (source: Land Registry).
Evidence suggests some agents are suffering from constipated sales pipelines possibly as a result of lack of personnel within the process (conveyancers and surveyors in particular) which could have an impact on cashflow, ironically when said pipelines are encouragingly healthy size-wise.
One of the positive outcomes of tougher times for our industry is that better agents worked hard to reduce, monitor and manage costs far better than before to enable them to stay in business, and this principle should continue to be adhered to.
Assuming that your costs are tightly controlled, you should review the effectiveness and time management skills of your staff to see what their genuine productivity actually is.
It can be a useful lesson to calculate the return on investment you are getting from each individual and/or team. For every £ you spend on those employees, what income do you generate? Does it vary from person to person and/or from office to office? If so, assess the reasons – they will be likely to fall under one of the classic headings of knowledge, skills or attitude.
Successful business owners constantly invest time in staff development. Accepting that there have been budgetary constraints on many practitioners in recent years, it nonetheless seems extraordinary that staff are left to fight the battles for business on the front line without adequate training on the essential knowledge and skills required.
The horror stories about agents failing to win business because of their lack of skill are scarier than anything US novelist Stephen King could write.
How about the valuer who spent a grand total of 15 minutes at a modern three-bedroom house before valuing it at ‘between £200,000 and £250,000’ – which the vendor could have done on their own – and who then promised to ‘do a deal on fees that is guaranteed to be cheaper than anyone else’. Unsurprisingly, he did not win the instruction. This unskilled approach to instructions is ludicrous to adopt in the face of stiff competition.
Take a good look at each of your team members – how productive are they? Many negotiators are good at looking busy and hiding behind a software-generated “to do” list. However, the focus needs to be on results. How many hot applicants or local property-to-sell applicants are they talking to every day? How many viewers are they getting round properties? How many valuation appointments are they booking or attending?
Sales activity targeting and monitoring can quickly highlight differences in output between employees and can reveal training and coaching needs.
Time management plays a massive part in determining the survival and success of estate agents in the current economic climate. With reduced team sizes, each member has to be better than ever before at understanding the concept of ‘money balls’.
Imagine playing a game of pool with a time limit where the balls you pot each have their own value, ranging from worthless to highly lucrative. The player who identifies and pots the most valuable balls will make the most money – far more than the player who pays no attention to the value of each ball and who randomly tries to pot as many as possible.
Apply this proven time management principle to your business and see whether your staff can both identify and pot the most lucrative balls. In other words, is your team better than competitors’ teams at qualifying applicants and vendors, thereby sorting the wheat from the chaff and spotting and maximising all business opportunities? Do they adequately investigate and ascertain customers’ motivations and timescales for moving, as well as their financial situation?
Agents waste far too much time on clients who can’t or won’t move. The ability to sort the “hot from the not”, in terms of both staff and clients, has never been more important.
Training and coaching to meet this need may well solve your problem and be a lot cheaper than employing an extra pair of hands.
TM training & development