Entry by Jennifer Allan

How Do You Think Your Clients Feel About Your 80/20 Plan?

  12 Comments

I just posted a blog at Active Rain that I thought the crowd here might enjoy. It's not directly related to real estate consulting, but it's definitely related to being a professional real estate practitioner, which is a big part of being a good consultant... and it expresses a sentiment that you'll be seeing a lot of around here in the new year - TAKE GREAT CARE OF YOUR CLIENTS AS YOUR FIRST PRIORITY ... and you may never have to prospect again.

http://activerain.com/blogsview/2606244/how-do-you-think-your-current-and-future-clients-might-feel-about-your-80-20-plan-

Below is the blog in its entirety... but hop on over to Active Rain where I expect they might be an interesting discussion - hope so anyway!

How Do You Think Your Current (and Future) Clients Might Feel About Your 80/20 Plan?

There was a featured blog here in the Rain a few weeks ago advising agents to devote 80% of their time prospecting for new business and 20% dealing with current business (i.e. active buyers and sellers). This isn't the first time we've seen this advice and it won't be the last; in fact, most Big Name training programs proclaim that a real estate agent's primary job is to prospect; that agents should vigorously resist the temptation to abandon their daily prospecting when clients call with pesky, administrative, non-income-producing problems to solve.

But I can't help but wonder... If a real estate agent's primary job is to prospect... and if the job our clients have hired us to perform for them can be done in a few hours a week... how on earth do we justify charging fees in the thousands and thousands of dollars?

Hold that thought while we return to the advice to devote far more time to prospecting than to serving...

Let's say that all this focused prospecting is paying off, and an agent is gathering an impressive book of real estate business - 5, 10, 20, 40 active buyers and sellers. Bravo! 

But, hmmmmm, just because the agent now has more clients to serve doesn't add hours to the day, so if he insists (as he's advised to do) on sticking to his 80/20 plan (because it's working so well!), his current clients are obviously going to be receiving smaller and smaller slices of his care and attention.

"But," the Power Prospector protests, "if I don't make prospecting a priority in my business and I do focus on my current clients, down the road I'll find myself with an empty pipeline and I can't have THAT! So, even if I'd like to do the job I promised to do I'd prefer to provide great service to my clients, I can't because I need to ensure that I always have new business coming in."

Well, um...

I'm guessing your current clients wouldn't think much of this argument, especially as they're feeling more and more neglected by the agent who promised them the world in service - and isn't delivering. I'm guessing they aren't singing his praises around the water cooler or at yoga class. I'm thinking that if they knew his business model was predicated on spending the vast majority of his time searching for, preparing for and pitching to his future clients instead of taking care of THEM, his current clients, they might have thought twice about hiring him in the first place.

Here's the thing. Taking proper care of your clients takes time. Your need for a full pipeline doesn't change the fact that you made promises and commitments to the buyers and sellers who believed you would take great care of them and their real estate needs. Believe me, they did NOT hire you because they were impressed by your prospecting prowess; they hired you because you assured them you'd take better care of them than any of the other agents they considered honoring with their business.

The bottom line is that if you can't handle more than X number of active buyers and sellers without sacrificing your service to them, then I guess you shouldn't be looking for more business when you already have as much as you can properly take care of.

Now let's go back to the first concept in this blog - if you're only devoting a few hours or even a few minutes a week to your clients, don't you think they might start to wonder what on earth they're paying you so much money for? And IF WHAT WE DO FOR OUR CLIENTS IS SO EASY THAT IT ONLY TAKES 20% OF OUR TIME OR WE CAN HAND IT OFF TO A $12/HOUR ASSISTANT, are our services really worth the fees we charge?

You can't have it both ways. You can't say, on one hand, that client care is simply a collection of administrative tasks that can be handled in your spare time or by an assistant, and THEN in the next breath declare that your client-care services are extremely valuable and should be well-compensated.

For the record, I don't believe that what we do is easy and I do believe we deserve to be well-compensated... as long as... we're doing the job we were HIRED to do and giving it our full attention.

I'll continue this soon, but please share your thoughts with me!

12 Comments

Well said Jennifer and the topic is one area that we totally see eye to eye. Concentrate on giving fabulous service and your pipeline will take care of itself.

This dialogue directly deals with the purpose of this organization.  How do we differentiate our business. Do we work on contingency like the traditional real estate brokers? Yes, I have discovered that many (maybe most) ACREs are actually traditional brokers/agents with the consulting compensation as an additional tool.

When we have dialogue among ACREs, it is wise to discern the baseline or purpose of the discussion.  We must compare apples and oranges. (as Jennifer did).  It is most likely that the agent that takes 40 clients (simultaneously) is working for free on contingency.  Which goes to Jennifer's point, that that agent must give tons of free stuff and eons of time to justify the premium high commission which is necessary to offset the fact that only 25% of contingency clients actually get to the closing table. The agent with 40 contingency clients can not satisfy her clients without hiring assistants to perform tasks.

.

I support what is stated in the post. But what I agree with the most is we can't have it both ways.

I don't believe what we do is easy, but it is becoming more of a commodity to the general public. Which I believe, in my opinion, decreases the value of the real estate professional--at least in the minds of our customer base. Going forward, dealing with this mindset isn't going to get any easier.

More home sellers and buyers see the professionals that are involved in the process as an extra cost that doesn't necessarily need to come out of their own pockets. They are searching for more efficient ways to minimize or completely eliminate that cost. And at the end of the day the client isn't concerned if we are well compensated or not. As they say, "Not My Problem!" 

Now, it is up to us to figure this thing out. How do we sell Us to the Them? How do we sell the value we offer as professionals to a population that would rather have someone else pick up the cost?

My belief is we have to fill the pipeline with a different kind of client. We need to create a new customer base and convince them they need us earlier on in the process.

To me it is obvious. Some have used the analogy of the Financial Planner. Well, keeping with that analogy a person looking to fund a retirement wouldn't wait to seek the help of a FP days before they were due to retire. This shouldn't be the case with real estate either but in reality it is.

In the end, it is our industry that has to push the client in the direction we think would be the most beneficial to all involve. And we are past the point of nudging. 

William - I disagree that we have to find a different kind of client - real estate buyers and sellers, while all unique individuals, simply want to feel they got good value for the money paid. They want to be treated with respect, which means the agent they honor with their business places them on a higher priority level than prospecting for new business. That the agent they hire puts a high value on competence and customer service.

One thing you'll learn about me, as compared to Mollie ;-] is that I have an extremely high level of disgust with the real estate industry as a whole and I have no qualms expressing it. I think a significant percentage of real estate practitioners are incompetent and lazy. And no compensation structure - consulting or any other - is going to fix that. Until WE demand more from ourselves, as an industry, we will ALWAYS battle the perception that we are a commodity - and an unwanted/unneeded commodity at that.

The attitudes expressed by the 80/20 crowd could put us all out of business if the general public finally gets fed up enough to find an alternative to the licensed real estate prospector practitioner. And we'll deserve it.

I agree that we need to raise the standards for agents.

I've been doing a lot of reading lately, trying to figure out how to reposition my business in 2012.  I've been thinking way too much about this for too long, but it all comes back to agent value. 

1) In the asbsence of leadership, people will listen to whoever is talking. In our case, the people getting attention are the Zillows of the world and discount brokers. They have trained the consumer to think that our only value was data (now openly available) and that we only do basic tasks like put a sign in the yard, enter data in the MLS, and open doors.

2) Buyer agency - there is an inherant conflict of interest when the buyer's agent is paid by the seller. Most Americans are used to this, but try to explain this to an international buyer.  Makes no sense. Also, because they aren't writing a check, they don't think of it as their expense and therefore don't put any thought into who they use.  It's "free" to them, and many agents event talk about it that way. 

3)  The infrastructure compounds the problem. Because the MLS is based on the cooperation between agents, how can you get away from the seller paying the buyer agent? I think this is why discount brokers came to be - they are forced to work within the existing structure. This is why rebates exist, because you are forced to be paid the "old way."

I personally would like to see NAR do a big campaign on agent value. But it still won't matter until the actual way we make money is based on that value.

Yesterday I analyzed the business of a local flat-fee brokerage in my area. They offer 3 levels of service: $200 entry only, $400 limited service, and $1000 full service (including negotiation, contract management, etc). HALF of their business is full service. So that tells me that people still value the additional help, but how in the world can they do it for $1000?  I've been tracking my time for years and the pre-listing activity itself takes 10 hours before you even put anythng into the computer. There's no way they can be proactive and provide true full service.

Anyway, getting back to the value.. it's going to take something big to fight the existing perception of agents.  Maybe not big, but organized at least on message. I don't get excited about being another good agent. I want to change this industry.

Well Jennifer, I appreciate your candor. When I called for finding a different kind of buyers and sellers, I mean the ones who are early adopters. Those willing to approach real estate differently. They are out there looking for innovation. I speak with them everyday.

Regardless of what any of us believe, the industry is rapidly changing and most of that change is coming from the outside. 

And I like you have a concept about imcompetence and laziness, but also arrogance of many in the industry. We believe that what we know and learn is all there is to the process. We think that businesses from outside our realm could never beat us at our own game.

We (the industry) like human nature at so many points in time are rash, quick to judge and slow to change. This is what I have heard from so many outside of our industry, including our customer base.

Sitting here typing a listing agreement and noticing the emails flying on this subject. Great. Maybe this property is worth mentioning here.

I was the 2nd and 4th agent with this listing and now I am the 6th agent.

LOL LOL

It started in 2007 before I became aware of being a consultant and the sale asking price was double what it is now.

Hilary - AMEN AMEN AMEN!!! I think you and I are sharing more than a few brain cells on this topic!!! I'd love to chat with you more about your 2012 initiatives; it sounds as if you're SO on the right track. Yeah!

William - oh, my yes, I forgot to mention the arrogance! Which, when coupled with the laziness and incompetence would be funny if it weren't so sad, eh?

 

Wow!  thanks for the great blog Jennifer. I never put it in perspective that way!!!  Thanks for making me think about it differently.

 I prospect when I can but never take away time from my clients, past or present, because to me that is more valuable than prospecting cold.  My clients are my referral source.  And they appreciate that no question is too elementary for me to devote my time to it.

Providing excellent customer service and value will always differentiate any product or service and eliminate commoditization.  If an agent is prospecting 80% of the time and sees a substantial increase in their buyer and seller clients it only seems natural that their focus would have to shift to satisfying current clients needs and expectations.  Providing value and excellent customer service should be any practitioner's main objective once they create a client.  If they provide excellent service and value to the client they won't need to prospect 80% of the time anymore because they should have built a great referral base of business. Their pipeline should remain full with the natural shift of prospecting for new clients to prospecting, happy, satisfied past clients for referrals.

 

Amen, John!

The thing is... I would hope that most decent agents, even mediocre ones, would recognize that clients need to be taken care of and that a long-term 80/20 plan is a ridiculous goal. BUT what bothers me is that the overriding message out there is that your primary job is to prospect and that your prospecting should NEVER play second-fiddle to client service.

How can we expect the general public to take us seriously or even much like us if THIS is the mainstream thought in the industry?

I guess that is why the general public lumps most real estate agents into the same class of people as used car salesmen. To many clients sign on with the agent never hear from them again until the house is sold and they show up at closing to collect a big check. I agree client service should be every agents number 1 priority.

This page contains a single entry by Jennifer Allan published on November 29, 2011 7:34 AM.

A Formal Welcome to SWS from the "New" ACRE® was the previous entry in this blog.

New alternative business model is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

  • User ID | User Name

  • | Denyce Thomas (3)
  • | Alysse Musgrave (1)
  • | Betty Byrnes (4)
  • | Charita Cadenhead (3)
  • | Bill Holt (1)
  • | Bill Travis (1)
  • | Bonnie Cox (1)
  • | Brenda Mullen (3)
  • | Brent Fraizer (3)
  • | Bryan Robertson (1)
  • | Carole Helwig (6)
  • | Carolyn Shipp (2)
  • | Christopher Earl (1)
  • | Jeffrey Mangus (1)
  • | Deb Orth (18)
  • | Don Gockel (1)
  • | Donna Janovsky (2)
  • | Diane Wolta (1)
  • | Erica Ramus (2)
  • | Ferris Anderson (2)
  • | Fred Carver (1)
  • | Glenn Freezman (28)
  • | Hilary Eshelman (1)
  • | Hilary Stokes (1)
  • | Holly Hall Wilson (4)
  • | Howard Abell (1)
  • | Ismael Jusino (1)
  • | Jim McCaughan (1)
  • | John Brennan (2)
  • | Jeani Thomas Richie (3)
  • | Jennifer Allan (35)
  • | John J. Gladwin (1)
  • | Jillian Klarl (1)
  • | Jim Kimmons (1)
  • | John Goddin (1)
  • | John March (2)
  • | Judi Bryan (8)
  • | Keith Bruce (1)
  • | Karoline Gumble (1)
  • | Kim Loredo (1)
  • | Lester Langdon (66)
  • | Laurie Furem (3)
  • | Linda DeVlieg (1)
  • | William Watkins (8)
  • | Marjet Wolbertus (1)
  • | Matthew Johnson (1)
  • | Melinda Hendershott (2)
  • | Merv Forney (18)
  • | Mike Swick (1)
  • | Mollie Wasserman (53)
  • | Nadeem I. Haddad (1)
  • | Paula Pitts (1)
  • | Paula Bean (5)
  • | Pat Tristram (2)
  • | Mary Pope-Handy (4)
  • | Ron Stuart (7)
  • | Tom Propes (2)
  • | Randy Landis (2)
  • | Jose Rivera (7)
  • | Robert Whitney (1)
  • | Shari Capers (1)
  • | Stacy Erickson (2)
  • | Steffy Hristova (1)
  • | Susan Mekenney (1)
  • | Susan Lehmkuhl (1)
  • | Timothy Fennell (1)
  • | Tom Keys (2)
  • | Trent Seidl (1)
  • | Vince Kleinknecht (1)
  • | Wendy Miller (1)