I’m a very fortunate man.
Happy Father’s Day everyone!
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I’m a very fortunate man.
Happy Father’s Day everyone!
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If I told you I was selling restaurant franchises at a million dollars a pop, plus an annual royalty percentage, would you take me up on that offer? If you answered yes, call me immediately as I got so much crap to sell you. But if you’re most people, you’d need a wee bit more information to make that kind of a decision. I would have to get a bit more specific about the restaurant concept, the business model, competitive advantage etc etc. Even so, ideas alone might not suffice for you to part with that cool millie.
While working as a salesman for a piece of equipment that mixed five milkshakes at the same time (”the multi-mixer”), Ray met the McDonald brothers who had opened up a hamburger store in San Bernardino that featured the “speedee service”. As the brothers kept ordering more and more mixers, Kroc studied their business model and the reasons behind its success and decided he wanted in.
But the magic didn’t happen until he bought out the brothers and took over the business. He had a hunch that by tweaking the Mcdonald’s system and making it more efficient, he could turn it into the well oiled greenback “printing” machine that it is today. However, he had no interest in running each restaurant in the empire to be. Instead, he would franchise the system to owner operators that would run the stores day to day and share in the profits. Winner Winner, Chicken Dinner. But at the time, he was about as believable as I was in the question that started this post. So what did he do? He showed that it worked. In an actual store. That he ran.
There isn’t a day that passes by that I don’t get some phone call or some email from someone claiming to sell me a “can’t fail” expireds kit, cherrypicked leads, marketing conference tickets, social media consulting or what have you, all in the name of enabling me to “dominate my local market”. Ninetine and a half times out of a hundred, they’re so full of crap, I have to call the City for a septic inspection.
If you happen to be a Gary Keller or Russell Shaw or Gary Vaynerchuk or Jeff Turner and you want to sell me a book, a pair of tickets to a conference you’re keynoting or a marketing system I’m inclined to buy. Why? Because you have shown that it works by means of your own experience, in real life. You have therefore created a valuable PROVEN franchise out of your way of doing things.
The Ray Kroc Principle is simple:
If you want to sell, teach or consult you must first show your prospective customers that it works in a “model store”
Put the Ray Kroc principle to work today. Show people that it works or shut the hell up.
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These thoughts have been percolating in my brain for a long time, but it wasn’t until I had a Twitter conversation with Rain City Guide’s Ardell Della Loggia (a must follow, by the way) that I decided it was time to crystallize them into written words.
This post on AgentGenius a few weeks ago stirred things up, when AG contributor Ben Goheen argued that the answers to some difficult questions (emphasis mine) would move the real estate industry into a more transparent direction:
• How much do you actually net for selling my house?
• Do you get paid more when another agent from your office represents the other side of the transaction?
• Why do you pick one home inspector over another?
• Do you receive any benefits if I use your company’s lender, title company, etc.
Needless to say, the fight that started in the comment threads of that post, spilled over into other parts of the blogosphere with Jeff Brown (@bawldguy) offered this very different perspective on this BHB post:
Transparency is honest dealing from a basis of rock ribbed integrity — nothing more and nothing less. The rest is self righteous dung.
I dare you to demand to know what your dentist, doctor, CPA, attorney et. al. are netting from fees they charge you for their services. What a joke — a bad joke, but a joke nonetheless. Who do these buncha Kumbaya, hand-holding yahoos think they’re kiddin’ anyway? Transparency my ass. They want information their parents/grandparents would’ve had the good manners never to seek in the first place. Why? Cuz it’s none of their damn business and they knew it.
Knowing how much an agent actually nets on a particular listing benefits the client in no way shape or form. Let’s not forget what the end game is all about here: The client called, hired and will pay the agent for results. That’s it! Not profit margins, cost of goods sold, or balance sheet analysis. We must never forget that. An agent that actually got a home sold by making a collect call to a prospective buyer (and nothing else) served the interests of his client better than the agent who spent thousands of dollars “marketing” a property without selling it. Period! So let’s cut the crap and let’s not attach accounting voyeuristic fetishes to a nice sounding word like “transparency”.
Is there place in our industry for transparency, or is this just the latest “self righteous crappola from the PC crowd”? Let’s look at one aspect of the real estate business and the answer will become clear instantaneously. I don’t think anyone in their right mind would argue against the fact that Buyer Representation Agreements and Listing Agremeents are slanted and biased in favor of the real estate agent. They are first and foremost documents that ensure the exclusivity of representation and ultimate compensation of the agent.
Yet, a Buyer and Seller are expected to sign on the bottom line of these agreements after a phone conversation, a quick coffee or at best, a shiny listing presentation. Honestly, how much does a client know about your ability to deliver those results they are looking for after that quick rendezvous? Elementary my dear Watson: Didley Squat. The result of this “arranged marriage system”, is thousands upon thousands of clients ending up with agents who “just stuck the sign in the yard and never showed again” or the ones who “are never available to show but I can’t get out of my agreement”.
So, in to make a short story long: YES! There’s desperate need for transparency in real estate.
How do we resolve this issue? On the one side, you don’t want no agreements in place and good agents working hard for client getting screwed by unscroupulous clients (YES, there’s some of those). But on the other, it’s not realistic, or fair, or transparent for that matter, for a client to commit to an agent without knowing anything about them.
We resolve this issue, the Ebay way:
After every transaction we close, we ask our clients to review the service they received on a third party site (in this case, Yahoo Local). We don’t guide them one what to write; we don’t moderate or delete their reviews; and we don’t cherrypick who gets to review. It keeps us on our toes and it helps the next prospective client make a decision on whether we’re the right fit for them. And here’s where the story comes full circle to my conversation with Ardell.
Writing a review might not directly benefit the client that just closed (although it doesn’t hurt them). But, the truth is, it might have benefitted that client to read those reviews before they made the decision to work with me. If done with “rock ribbed integrity”, an unrigged review system would lift the veil, hold the agent accountable for their performance and benefit the consumer tremendously – which ultimately is the very purpose of transparency in real estate.
What are your thoughts >
]]>Why should I pay you a single shiny penny?
Before I give you my take on this, it is definitely worth mentioning that the fear of extinction has sparked a valid debate that has gotten people in our industry thinking (and doing) about how to be better and raise our cabbie standards. And that’s a wonderful thing.
Now back to the ridiculous. Let’s take the word Realtor out of the equation for just a second – and substitute it with “district manager” ”staff accountant” or “financial analyst”. How utterly inconceivable would be for that employee’s boss to demand a daily, detailed report of what she had done that day to earn every dollar she will get on her paychecks? Let’s take that even further. Would the employee that spends more money on gas getting to work everyday deserve their pay more than the one that lives around the corner? He is spending more, after all.
The fact that our work is project-based, doesn’t make this any more sane. Instead of focusing on the end goal – success in selling that home or finding that perfect colonial – it seems we’re playing a game of “Let’s count your money”.
My answer to that often asked Seller question: Because I get it done!
Which brings me to this: Those among us who still contend that our worth is in being the nightguard to the gated community that is real estate information, will soon vanish if they haven’t done so already. So will the ones that give slews of powder puff reasons for their worth – my concierge service, my attention to detail. Yaaawn! Get results and like my good friend Jeff Brown says “your clients will be happier than bugs in rugs”. If you can get the home sold by making a payphone call that costs you a quarter, more power to you. If you deploy a Spielberg-led movie crew to make a short film about your listing and that won’t get the house sold – you’re in the justification business. And the light at the end of that tunnel is a train.
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(As somewhat of a postscript)
We’ve got much bigger issues to deal with as an industry than compensation justification and the paramount of these issues is the need to raise the minimum standards for our industry. But that’s another post for another day.
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The feeling is all too familiar to us entrepreneur types. The debilitating paralysis that grips our business soul and temporarily evaporates every ounce of our self confidence. If you have ever owned a business, there has been a time when you invested all your creative energy on closing that deal or getting that client and failed. You’ve surely had one of those days when you walked into your office with your confident chest out ready to convert all those prospects into loyal clients and got hung up on. Or built a solid pipeline only to watch it turn into Chernobyl in a matter of days.
It’s not personal. It’s just business.
When you are so involved in every aspect of your business from strategic decisions to coffee making, it is hard not to take every business shortcoming as personal failure. After all, you’ve poured yourself into the mold of every component of this creature of yours – from business cards to operating systems. But let me repeat Don Vito’s timeless creed: It’s not personal. It’s just business.
So dust yourself off and do what you do best: Make it happen! That prospect hung up on you? Call another. That deal fell out? Put another one together. Pipeline looking thin? Hit the pavement and you’ll load it back up to the gills. Check your emotions at the door, put on your business mantle and make them an offer they can’t refuse.
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When the news broke out yesterday, that Steve Jobs (co-founder of Apple) was taking a leave of absence due to complications with cancer, the blogosphere (and Twittersphere) went into a frenzy. From straight reporting of the breaking story to dump-apple-stock urges to “you’re an idiot if you sell” articles. Regardless of which side of that argument you support, I think everyone will agree that Steve Jobs is Apple’s Justin Timberlake in that he “brought its sexy back“. Many would argue that other companies like LG or HP make products that are comparable (or sometimes superior) to respective Apple products but somehow they have not been able to emulate Apple’s “other side of the pillow” cool perception. It is valid to argue that Apple will most likely continue on the same path since they’re being ran by the same management, marketing and product development teams as before. However, no one can deny that the absence of a such a visionary would be a substantial hit to the company and its market cap.
I told you that story to make this point. Let’s set Apple aside for a second and start talking about companies whose “market cap” changes based on how much money is in the owner’s checking account that day. Mark Twain’s CPA Business. Bob Barker Insurance Agent. YourNameHere Real Estate.
The money you make has nothing to do with the answer to that question. You may slide the veil of success over it, but the truth remains underneath. If your brand and your company lives and dies with you, you have simply created a job for yourself, albeit a good paying one at times. You have not created a real business until your pitch changes from “Mark’s the greatest CPA in the world” to “our way of doing business (i.e. system) makes us the greatest CPA firm in the world”. It is imperative that you’re selling a system of doing business that can be easily reproduced by properly trained people. No matter how successful one person or a team of people get, there will always be a limit to what they can achieve – at some point there’s just not enough hours in the day for more business even at maximum efficiency.
In every business there are people who are just amazing at what they do – True Rockstar Rainmakers. But until they figure out a way to “bottle” that rockstar quality so it can be duplicated by a properly trained garage band member, their magic flame will flicker out with them.
(I wish Mr Jobs and his family a fast recovery to great health and great things. Whether Apple has been able to emulate his legendary magic into their systems will remain to be seen at a future time).
Photo Credit: tsevis
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Flirting
It came to us on a stuffy autumn afternoon after viewing a foreclosure property. I had just gotten off the phone with one of our investor clients and the news was not good. After presenting him with what I though was an offer he could not refuse he proved I was no Don Corleone. Reason: Money tied up in other projects. On the way home, I was fuming like a chimney in a Dickens novel.
Then, the “aha” moment rocked my world. “There had to be someone out there that would love to jump on a deal of that caliber, if they only knew about it.” – I thought. We had a great supply of a precious resource but no “megaphone” to announce it to the world. Later that evening, I posted the first foreclosure deal on our website. Before that moment, our website had been a collection of boring pages full of yawning paragraphs I couldn’t even finish reading. And that night, it turned into a foreclosure mercantile exchange of sorts.
Dating
In the fall of 2006, after having cancelled an ad in the Greensheet that produced an astounding ROI of -50%, we decided to get radical and start an Adwords Campaign with Uncle Google. Sure, our website was beefed up with as much foreclosure supply as my Frontpage could spit out without gagging – but the people were still not coming to the storefront to see all we were cooking up. And just like GM and Chrysler, we just needed a bridge. We named ours “Pay per Click”.
Exactly thirteen hours later, my Blackberry buzzed. It was an email that read “Real Estate Information Request”. The following day, I found myself in a builder’s office helping this couple buy their first home, with my hand placed firmly on my head to keep together a mind that had just been blown. Ever since that campaign was setup and tweaked in ‘06, I have not touched it once. The result: Over 600 leads per year with a 10% conversion rate and an ROI of 2083%. Is it any wonder newspapers are dying? They don’t even make for good toilet paper.
Digression
Now, I know there will be some people out there that will comment on how Adwords and other internet marketing are a complete waste of money and how it hasn’t worked for them. To them I say this: Internet Marketing is like Sex in that if it doesn’t do you any good, you just ain’t doing it right. The fundamentals of internet marketing are those of any marketing. If your campaign is not tying together supply with matching demand, you’re just wasting your time and money. Another way to look at it is this: If you were given the opportunity to sit in front of a real customer wanting to buy a real product or service right at that moment, would you make the same pitch? Is the customer you want to attract and do business with looking for what you’re offering or something in a completely different category? Let me illustrate this for you. Often times, in ads and in their site, real estate agents talk about themselves and their great professionalism, areas of town they cover etc. Which would be okay if real estate consumers were out there searching for agents. Bu they’re not – They’re looking for houses. Therefore if you base your advertising on marketing a supply that’s not in demand, it is destined to fail.
Popping the Question
In the spring on 2007, I stumbled upon an online network called Active Rain where agents blogged about real estate. From cold and factual market reports, to insightful opinion pieces, to eliminating pet odors, to blatant advertising, to personal and business experiences. After doing a little sifting through the noise, I started reading some fascinating people and in the process, learning about bringing back one of my old passions (writing). That aside, I had my doubts about the business value of blogging in real estate. After all, it was supposed to be just a numbers game: Cold call until someone said yes. Prospect till your ears bleed. Harass till they sign on the dotted line.
But it wasn’t me.
After a couple of months of feverish blogging an email came in “Sent via Active Rain”. Then another. Then another. They wanted me to help them purchase investment properties in Houston. Multiple Ones. They were already sold on our expertise before they made contact. They had been reading my blog for months before making that decision. And I could just be me. Not some pushy, “come-on-down-to-the-car-lot” salesperson. I knew then this was for life.
Marriage
Now, I’m truly starting to put it together around a social media framework. All the previous stages of this story, from producing content consumers are seeking, to getting eyeballs on that content, to developing a base of readers through blogging have prepared me for this. Social media is the bond that makes it all come together and forms the brand that is you. You can do blogging. You can do content. You can do Twitter. You can do Facebook. But all those things are nothing but disconnected elements until you become an online marketer. And that’s not something you do, but rather something you are.
]]>Oh, but there is so much more.
Today I wanted to show you how you could book your own courtside seat in your local Twitter market and start cherrypicking it with laser-like focus:
Needless to say, you are wasting your time if you are looking for tweets along the lines of:
“Looking to do business with a ______. Call me at _______”
You should be looking for people that you truly find interesting and then engage them into a conversation that might evolve into future direct or indirect business for you. Fight the urge to sell and spam – When you engage someone on Twitter they will look up the website you provide and your bio so they already know what you do.
Real Estate is local and your twitter strategy should match.
]]>Show me the money.
Skip forward to a room full of veteran real estate agents attending a conference on social media marketing. The question arises every single time. It might come in different packaging, but it’s ultimately the same question.
How many blog posts do I need to write to get a client?
What’s your ROI for Twitter?
Made any money out of this Facebook stuff yet?
Exactly how is Linked In going to help sell my Northwest Houston listing?
When it comes to social media marketing, the Always Be Closing approach is a self administered poison pill. It’s the approach that leads you to alienate your social prospects (if you will) by spamming them with incessant sales pitches and links to your listings. Let me save you some time. You will never be able to figure out how many tweets it takes to get a sale. Or how many Facebook friends you need to book to get a referral. This is NOT a number’s game.
It is an involvement game. An engagement game.
This is an invitation to change your thinking much in the same way that social media will change the way people select who they do business with in the future. And the future is now. Unlike any other medium in the history of the world, social media provides you with a window into the real lives of people but in return provides them with a courtside seat into your life. Show them your passions, your personality and your expertise and they will let you know when it’s time. Twitter is not a sales call – It’s an investment. Facebook is not an appointment – It’s a casual lunch at a local cafe. Social media is not a brochure. It’s a panoramic view of your life.
Change the way you approach social media. And your business will flourish like you cannot begin to imagine.
]]>In that unconference during one of the discussions, Jeff Turner (@respres) spoke about Twitter and how it could be used as a business tool. “Imagine – he said – that you’re in a restaurant and three or four people are having a conversation. Twitter allows you to join that conversation, contribute to it and in the process build a network that will be good for your business in so many ways. But to do so, you’ve got to listen”
Hmmmm…
After the conference, I thought long and hard about what he said. And slowly but surely I started to get it. Most likely, you will never find someone on Twitter that will say “Looking for an agent to sell my home. Call me at …”. But if you join meaningful conversations you can create a network of followers friends that will help your business tremendously in the long run, if you’re willing to invest your time and undivided attention.
In my humble opinion, when it comes to using Twitter for business, the absolute biggest advantage that this platform offers is targeting. In other words, you get to choose the “crowd” with which you hang out, the people that will not only dig your way of doing business but also your personality.
So if you’re ready, let me take you on a sweet shopping trip for Twitter followers:
A couple of parting words.
