You finally decided that with prices still low, you are going to upgrade to that bigger house you and your husband have been talking about for years. Things are good with both your jobs and now is the time.

You have heard from several people that XYZ Real Estate has a good reputation and you see a lot of their signs around town so you decide to start your search on their website one night after work. They have a nice site and you are getting excited about the listings they have in the neighborhood you have been wanting to move into.

Soccer, baseball, yard work, laundry, and grocery shopping chores are done by mid afternoon. You and your husband finally sit down to relax before cooking dinner and wonder why you have not heard anything from XYZ Real Estate. You are both eager to look at homes tomorrow so you check your e-mail to see if someone has gotten back to you. Nothing on e-mail and nobody has bothered to call after several hours. Not impressed with the lack of response, you get back online and start searching for other companies.

Does this happen every day in our industry?

Unfortunately, it happens hundreds of thousands of times every single day!

According to NAR, 48% of internet leads go unanswered and the remaining 52% get responses a couple of days later. This is simply unacceptable to today’s internet savvy consumer who has much higher expectations when they request information online.

Your consumer can get real estate information from just about anyone these days so they are not going to wait around for you to respond to them. If you don’t respond quickly (within the hour) they will find someone who will and since 93% of consumers pick the first agent they speak to, guess who is going win?

The problem brokerages have is that most do not have enough call volume to justify a rapid response team or full blown call center. As a result, they leave it to a relocation department, or, in many cases, to agents directly. Unfortunately, without accountability and metrics, most companies fail miserably in this area and end up letting significant commission dollars slip through the cracks month after month.

The solution lies in developing a real internet leads management process that must include three distinct segments:

·    Lead capture;
·    Lead distribution; and,
·    Accountability and metrics.

In addition, you must be able to respond to consumers when they want a response. That might be in the evenings or early in the morning. Remember, you MUST get back to them in minutes, not hours.

The market is tough enough already. Don’t make it harder by ignoring the obvious… companies that can develop or outsource an internet lead management system will have a distinct advantage over those that do not.

About the author
Jose Perez is the President of PCMS Consulting, a full service consulting, sales and management organization which specializes in real estate industry issues.  For more information, please visit www.pcmsconsulting.com/webinars or e-mail jperez@pcmsconsulting.com.  PCMS Consulting is hosting a 5 month coaching series called Camp REinvent. For more information visit www.campreinvent.com.

Okay… it’s 2010 and the market has been killing me for the past two or three years. I am lucky to be here but I love what I do and I am determined to make it work. I am not going to keep doing things the same way because it has gotten me NOWHERE and it’s time for me to reinvent myself, my company, and my agents.

I have finally figured out it is not the market, it is me and there is no other choice.

2010 is when I am going to get started!

Since this is a real estate publication, I won’t bore you with my other resolutions like losing weight, working out, and all that. I am focusing on what I need to do this year because if I don’t, I am going to lose a lot of weight from not eating and have nothing but time on my hands to work out!

Here we go…

I am going to reinvent myself. I am not going to keep telling people how important all these things are yet not do them myself. I am going to reply to my emails right away, I am going to figure out Linked In, Facebook, etc. and really use these things to get people comfortable with the value I represent, and I am going to communicate with my agents the way they expect a broker in 2010 to do so.

I am going to make a commitment to Web 2.0. The first thing I am going to do is finally realize that Web 2.0 is not just about my website, it’s about how people view me and my company online. That means what we are all blogging, what we are all saying on the social media sites, how engaging our website is, how our website shouldn’t just be a brochure anymore.

I am going to finally get my arms around internet lead management. I am tired of leaving money on the table and that is what I have allowed us to do for so long. It has to stop. NAR says that 48% of internet leads go unanswered and it is probably worse than that at my company. We are just leaving it up to agents and we can do so much better for them and for us if we set our minds to it. It’s just not “okay” to go on like this anymore.

I am going let go of the old paradigms about what a real estate office is supposed to be. Every time I see empty desks and offices I wonder what is wrong with me. Everyone is happy to meet at Starbucks and I still have 10,000 square feet. What is wrong with me?

I am going to make a real effort to recruit the agent of the future. I have no system, I don’t hold my people accountable, and I don’t get the recruiting results I should. My agents’ average age is 50 plus. I have to install as many tools and systems into my recruiting effort as I do into my technology, listing presentations, etc. My people are my biggest asset yet I spend less time, money, and effort in recruiting the people that will take us to the next level and keep us viable five years from now.

If I don’t lose weight and exercise, I risk my health. If I don’t address the issues I mentioned above, I risk my business.

Continued deflation in the housing market, double digit unemployment, a credit crunch, and bank failures all quickly come to mind.

After the hustle and bustle of the Holiday’s pass and the New Year’s resolution are made we will be faced with all the opportunity that every New Year promises. Like the Grinch who’s heart grew to the size of 10 Grinch’s I was reminded of modern day parable of the big and small rocks. Click here for the best video of the parable that I have seen.

As we prepare to toast the New Year and make plans to make 2010 a banner year remembering the Big Rocks will help us all put things in prospective. A couple of years ago I was speaking with a Consultant/Trainer who relayed the following story:

While meeting with a Group of Automotive Dealer’s the following question was posed, “What are the most important things in your life?” The answers were typical, with faith and family topping the list. He then posed a second question, “Do your senior managers and leadership team know the answers to the first question?” Silence fell upon the participants. Lastly Mike asked, “Does your organizational culture reflect your highest priority, the answer to question 1. As the real estate industry struggles to be profitable, thinking about these questions and the answers may go a long way to making sure we are putting the big rocks in first.

Understanding is the key to success. Understanding what we want to accomplish, understanding what those around us want to accomplish, and understanding what our customers and/or clients want to accomplish. Our industry is suffering from an extreme lack of understanding. Broker/Owners don’t understand why managers aren’t recruiting more agents, agents don’t understand why buyer won’t buy or why seller’s have ridiculous expectations of a home’s value, and clients don’t understand why an agent can’t get the pennies on the dollar that the late night infomercials promise are right in front of everybody.

To understand is to lead. And leadership is what is going to make 2010 a different year than the previous, or if you are one of the lucky few, leadership is what is going to continue to make your company successful. There has been much talk about the brokerage of the future. The brokerage of the future is going to be made up of leaders who understand. Leaders who understand that given the proper tools and training managers will attract the top talent. Leaders that understand agents and sales associates need more than a handful scripts to negotiate the best deals for their clients, and leaders who understand that an educated client or consumer will have realistic expectations.

Knowing what we know, and don’t know is the first step. The second step is making the choice to do something to change what we don’t know. What worked in the past isn’t what is going to work in the future.

2010 needs to be the year you REinvent your brokerage. “It’s never too late to be what you might have been.” George Eliot

As we begin the process of REinventing ourselves to face the new economic realities of life we must change the way we conduct our day to day businesses. Focus on the Big Rocks and we can build a high trust business with loyal followers, and motivated and productive, employees and agents.

I realize this might sound sacrilegious to some, but let’s take it out of real estate for a second:

·    Which is the better model, Nordstrom or Wal-Mart? You are shopping at both.
·    Which is the better model, Starbucks or Dunkin Donuts? You are buying coffee at both.
·    Which is the better model, network television or cable television? You are watching TV on both.

The bottom line is that in these other industries, companies utilizing different models are successful as long as they have been true to their models. If Nordstrom even hinted at being a discounter, they would lose clientele. Similarly, if Wal-Mart tried to charge Nordstrom prices, they would lose market share. If you recall a few years ago, Starbucks was trying to be all things to all people and they started to suffer as a result.

My point is that if management stays true to what they set out to do, they can continue to be successful but it is going to require discipline, accountability, and laser focus. It is the same in real estate but many brokers constantly lament all the discounters, 100% shops, etc. that have “ruined” the industry all the way back to when Re/Max “messed everything up” back in the 1970’s and 1980’s as their “alternative” model began to be accepted.

As far as I am concerned, nothing in our industry is ever going to go back to the way it once was. We may as well start accepting that and start doing the things we need to do to truly understand our model.   Once we truly understand our model, even if we have to reinvent it given today’s environment, we will  know what we need to do to be successful given the seismic shifts that have occurred over the past few years.

Whether we are traditional brokers, 100% brokers, online brokers, niche brokers, or any other kind of broker, we need to know what our agents and customers expect, and what the limitations of our financial structure will allow. Once we have a true understanding of this, and we make sure that our management team and agents also understand and embrace this, we can move forward, stay focused and grow a profitable business as our industry begins to stabilize in 2010 and 2011.

Some examples of being true to several different models:

Traditional model – This model continues to be the dominant model, however, many traditional brokerages have eroded their profit because they have felt compelled to offer full service (i.e. great websites, referrals, branding, etc.) but also try to compete on price with models that offer higher commission splits. As a result, this model has become a low margin business. Traditional brokers can have a bright future if they lower their overhead, decrease the size of their foot print, figure out how to generate and distribute business online, and create ancillary revenue streams. These companies can be true to their model and have a bright future as long as they continue to provide service to their agents but figure out how to make up for lower profit margins by having other sources of income such as mortgage, title, etc.

100% model – Since “genie was let out of the bottle” 35 plus years ago, traditional brokers have looked down upon this model because it has caused commissions splits to rise and profits to decline. Although that maybe true, I would argue that the traditional brokers, at least originally, were not true to their model and tried to compete on price by offering higher splits. The 100% model is not going away any time soon and there is a certain segment of the agent population that will always be drawn to it. As a result, as long as the 100% broker stays true to his model and determines how to make their fixed cost monthly fee continue to work for their agents and, like the traditional broker, determine how else they can make money, they too can have a bright future.

Discount model – Like the Nordstrom and Wal-Mart example described above, there are certain consumers that will always gravitate towards a “deal”. Discounters can be successful as long as they remember that they are making less than their competitors down the street so they either have to make it up on volume or they have to limit the services they offer.

Virtual model – In the past couple of years, more and more virtual brokers have arrived on the scene. Clearly, with a much lower overhead structure, these brokers can charge dramatically lower fees and pay much higher commissions. That being said, as long as they are true to their model, they won’t have locations, office meetings, or many of the services a traditional broker, for example, might have. Virtual models can work as long as those brokerages remember that is what they are and don’t try to compete with some of the others at their level.

One of the biggest weaknesses of our industry is the lack of accountability and discipline. In most companies, the agents are afraid of their customers, the managers are afraid of their agents, and the brokers/owners are afraid of their managers. My argument is that if the industry, regardless of your model, holds itself more accountable and becomes much more disciplined, anyone can be successful as long as they are true to their model.

PCMS Consulting expands Terabitz relationship

Company chosen to provide search engine optimization project management

Atlanta, GA (November 9, 2009) – PCMS Consulting today announced that it has been chosen to lead all search engine optimization and social media efforts to the Web 2.0 enterprise clients of Silicon Valley based Terabitz. The innovative company, who names leading companies such as Intero Real Estate, @Properties, and Prudential Gary Greene as clients, has an exclusive marketing arrangement with PCMS and has also been informally recommending them for SEO projects for several months.

Terabitz founder, Ashfaq Munshi, decided to expand the relationship based on the belief that SEO has become a prominent topic as brokerages go away from print media and are looking for ways to organically drive traffic to their sites. “In addition to the great job PCMS has done leveraging their relationships on our behalf, we also feel very confident they can provide an integrated approach to our whole internet marketing effort. They will help drive traffic to our ‘best in class’ Web 2.0 solution.”

Stacey Salatto, Broker at Porter Properties in Auburn, AL, signed a deal with Terabitz and hired PCMS Consulting for SEO services separately in April 2009. “It has been very convenient for us to have our SEO vendor working hand in hand with our Web 2.0 enterprise provider. PCMS markets the Terabitz product and is intimately familiar with their architecture so it gives them the ability to give us much better service than someone else might be able to.”

PCMS President, Jose Perez states, “We are very excited that a recognized Web 2.0 leader such as Terabitz recognizes our ability to help them not only in marketing their platform but also working with their clients and engineering staff to drive traffic. Our continued positive momentum continues to attract business and allow us to recruit talent.”

PCMS recently recruited Jeff Castner to handle business development in the Midwest and is also actively recruiting to round out their award winning business development team. Mr. Castner is a former sales leader for Sotheby’s International Realty and Coldwell Banker and joins a team that has over 300 years of experience on the local, regional, and national real estate scenes over the past 25 years.

ABOUT PCMS CONSULTING
PCMS Consulting is a full service real estate consulting, management, and sales organization specializing in real estate brokerage and franchisor growth related issues.  PCMS was founded in 2007 and delivers a portfolio of innovative consulting services and related products that leading companies require for maintaining and enhancing their market position and profitability. The organization is led by founder and President Jose Perez who has compiled a veteran, forward-thinking team of consultants, business development personnel, and innovative industry product vendors and franchisors to assist clients as they seek to “reinvent” their companies in a dramatically changing environment.  For more information visit www.pcmsconsulting.com and www.pcmsconsulting.com/pcms/blog/.

“Adversity causes some men to break and others to break records,” is a quote by William Ward that I believe is quite appropriate for our current market. We have a number of companies and agents doing quite well in what many consider difficult times.

This is not our first challenging market. When I started in the business in 1980 we had 18+% interest rates and less than two million homes sold nationally compared to four+ million this year. Many did not survive that downturn or subsequent ones.

That brings me to another important point. Many brokers that should have sold during the mergers-acquisitions boom of a few years ago now are not able to because their company’s value has decreased dramatically. Assuming you agree the market will stay flat for at least 12 – 18 months, how are those companies going to increase profitability so they can be in a position to sell for a profit at some point in the next 3 – 5 years?

Back in the 1980’s, and through today, profitable and sustainable companies all possess:

• Great Leadership – positive, encouraging, and consistent;
• Willingness to make tough but fair decisions;
• A strong, well articulated, and balanced value proposition;
• “Rainy day” financial reserves;
• Lower than average occupancy costs;
• Higher than average volume per desk;
• Higher than average variable costs vs. fixed costs;
• Marginal profit even at lower transaction velocity;
• Laser focus on improving market share, the only true economic variable a company can control; and,
• Managing expenses but always spending a majority of time driving top line revenue opportunities.

Profitability does not appear to be related to your brand, market size, or brokerage model, even though these are all important. Profitability is all about achieving balance and being true to your model.

An example of a company model would be a high agent compensation model. This can be profitable if the brokerage is providing an appropriate level of support for the company dollar derived. The agent is receiving fair tools and services for the compensation they receive or fees charged. In turn the broker must be allowed to retain a fair profit for the services provided. Obviously fairness is in the eye of the beholder, but if the equation is slanted too far in either direction neither will prosper for long.

Many of the companies that exited the business, or will soon, are severely flawed in their balance. Because of their generally high fixed overhead expenses combined with high agent compensation their model is sustainable only with high transaction velocity.

How are these companies ever going to position themselves for an eventual sale if they do not address these issues? How are you going to position yourself for a profitable sale in a market that is going to be, best case, flat for the foreseeable future? What is your succession plan?

As with every industry, we must better manage our ability to adjust to market cycles. I believe many companies can emerge from this market “re-invented” combining a strong agent/client value proposition and scalable marginal income. The time to change is now.

History will repeat itself and lessons can be learned but hopefully not forgotten. Did I mention my profitability themes above were first presented over 25 years ago during the beginning of another difficult period?

RIS Media – December 2009, “Adversity causes some men to break and others to break records,” is a quote by William Ward that I believe is quite appropriate for our current market. We have a number of companies and agents doing quite well in what many consider difficult times.

This is not our first challenging market. When I started in the business in 1980 we had 18+% interest rates and less than two million homes sold nationally compared to four+ million this year. Many did not survive that downturn or subsequent ones.

That brings me to another important point. Many brokers that should have sold during the mergers-acquisitions boom of a few years ago now are not able to because their company’s value has decreased dramatically. Assuming you agree the market will stay flat for at least 12 – 18 months, how are those companies going to increase profitability so they can be in a position to sell for a profit at some point in the next 3 – 5 years?

Back in the 1980’s, and through today, profitable and sustainable companies all possess:

• Great Leadership – positive, encouraging, and consistent;
• Willingness to make tough but fair decisions;
• A strong, well articulated, and balanced value proposition;
• “Rainy day” financial reserves;
• Lower than average occupancy costs;
• Higher than average volume per desk;
• Higher than average variable costs vs. fixed costs;
• Marginal profit even at lower transaction velocity;
• Laser focus on improving market share, the only true economic variable a company can control; and,
• Managing expenses but always spending a majority of time driving top line revenue opportunities.

Profitability does not appear to be related to your brand, market size, or brokerage model, even though these are all important. Profitability is all about achieving balance and being true to your model.

An example of a company model would be a high agent compensation model. This can be profitable if the brokerage is providing an appropriate level of support for the company dollar derived. The agent is receiving fair tools and services for the compensation they receive or fees charged. In turn the broker must be allowed to retain a fair profit for the services provided. Obviously fairness is in the eye of the beholder, but if the equation is slanted too far in either direction neither will prosper for long.

Many of the companies that exited the business, or will soon, are severely flawed in their balance. Because of their generally high fixed overhead expenses combined with high agent compensation their model is sustainable only with high transaction velocity.

How are these companies ever going to position themselves for an eventual sale if they do not address these issues? How are you going to position yourself for a profitable sale in a market that is going to be, best case, flat for the foreseeable future? What is your succession plan?

As with every industry, we must better manage our ability to adjust to market cycles. I believe many companies can emerge from this market “re-invented” combining a strong agent/client value proposition and scalable marginal income. The time to change is now.

History will repeat itself and lessons can be learned but hopefully not forgotten. Did I mention my profitability themes above were first presented over 25 years ago during the beginning of another difficult period?

I “secret shopped” eight clients yesterday. I randomly sent e-mails to five agents per company at lunch time. That was 40 e-mails saying I was interested in buying real estate in their towns and gave them a price range plus asked them to tell me about themselves and their companies. I was also specific about the fact I expected e-mail responses because I was not ready to talk to anyone on the phone yet.

40 e-mails. Specific instructions.

What have been the results in the ensuing 34 hours???

Keep in mind… every study tells you today’s internet consumer expects an immediate response. Furthermore, NAR states that 74% of consumers pick the first agent that responds regardless of their experience level or just about any other metric you might measure an agent by.

Drum roll please…

40 e-mails. Specific instructions.

Results please…

2 calls within the hour, 1 call within 5 hours, 1 call within 10 hours.

THAT’S IT!!

36 out of 40 have still not responded after 34 hours!!

I realize this is not a scientific poll, however, if you are a broker you should be asking yourself the following questions:

- Why am I not “secret shopping” my agents?
- How much money might I be leaving on the table?
- Why am I not holding people accountable?
- Why don’t I have a system for tracking this?
- Why am I risking all the investments I have made in driving traffic to my site?
- Why am I risking all the investments I have made to keep people on my site so they want to do business with my company?
- Why am I leaving all this in the hands of someone else?

Inspect what you expect!

RIS Media – November 2009 When I entered the real estate industry in 1984 I was told real estate was a numbers game. I never forgot that. The more people I reached and made a connection with the better chance I had they would turn into buyers and sellers.
I was young, and eager to succeed so I called a minimum of 50 people every day from the yellow pages, ran as many newspaper ads as my pocket book would allow, sent out flyers, sent out postcards, had a booth at our state Home and Garden show, and did TV commercials. I continuously tried to reach as many people as I could.
In 1998 I switched careers and become a mortgage broker. I could no longer afford the newspaper and other traditional means to reach my new customers and the internet was gaining speed so I made a decision to seek alternative avenues for marketing.

People started coming to me by the hundreds then by the thousands.

It hit me… numbers still work, but instead of me reaching out to people, they were reaching out to me. I was able to reach millions of people through the internet!
Let’s look at some numbers provided by Quantcast:

1 google.com 142M+ U.S. monthly people. The site attracts a more affluent, more educated audience.
2 yahoo.com 123M+ U.S. monthly people. The site appeals to a more educated crowd.
3 facebook.com 95M+ U.S. monthly people. The site appeals to a more affluent, young adult, very slightly female biased following.
4 youtube.com 82M+ U.S. monthly people. The site appeals to a more youthful following.
5 msn.com 80M+ U.S. monthly people. The site caters to a adult, more educated audience.

Between Google and Yahoo alone there are over 275,000,000 monthly visitors in the U.S. alone?

In the last two months more video was uploaded to You Tube than the combined content of network TV stations since they started airing in 1948.

Twitter gets approximately 4,419,413,000 tweets per hour.

NAR states that over 84% of home buyers and sellers begin their search online. Unfortunately, as an industry, we are forgetting what I learned in 1984. According to NAR only 33% of real estate agents are participating in social networking. What am I missing? Why is this the case?

As I reflect back on my last nine real estate home purchases (both investment and primary) I used the internet for research. When I was ready to see homes, I sought out the agent or real estate company that provided me with the local real estate information I was seeking. It was that simple. I did not need to talk to someone until I was ready.  The internet proved to be a valuable resource.  I was able to identify local trends, school information, community info and everything I needed to make an educated decision.

The internet, whether it is your website, a blog or social media campaign is about numbers and conversations.   Real estate is about numbers.  Social media and search engine numbers should be enough to grab the attention of all Realtors but we need to do more to create an integrated internet marketing strategy.

In today’s economic climate, recruiting a quality sales force is a critical component to the viability of a real estate company. In addition, today’s changing market provides the best recruiting opportunity we have seen in 10 years.

These challenges and uncertainty in the market have caused a massive agent movement and the agents are looking for a leader to emerge. Those who are providing solutions for agents and who have created a productive office environment are having the most recruiting success during the downturn.

The agents today and in the future are also looking for a progressive broker who is using technology and social media to capture the consumers and communicate with agents.

One of the hottest recruiting strategies of today is using social media.

Here are some things to think about…

1.    Are you effectively utilizing social media to recruit both new and experienced   agents?
2.    Do you understand how to set up a profile, groups, blog, tweet and get agents to follow you?
3.    Do you have a You Tube channel or use video in your recruiting?
4.    Do you use a recruiting micro-site, RSS feeds and know how to link all of it together?
5.    Lastly do you understand SEO and how to optimize your company site, micro-site and any blogs you post?

If not, you are missing the technology agents of today and the agents of the future. Additionally, to have recruiting success in today’s market you must have a plan with timelines, action steps and specific recruiting strategies relative to your goals.

The most successful recruiters understand and have incorporated these five philosophies and techniques in their communication.

1.    Agents fear change and they don’t want to move, you must give them a compelling reason to meet with you
2.    You must find out their needs, their why and their dreams so you and your company can be their solution!
3.    Your company’s benefits must be tangible and quantifiable. Use evidence when presenting.
4.    Don’t “Sell” your company’s benefits, allow the candidate to discover their value by leading them with the right  questions.
5.    Is the candidate motivated? They must be more motivated to change their results or the fear of changing companies will cause them to stay put.

About the author
Rich Rector, Recruiting Strategist
With over 20 years experience in the real estate industry, Rich has been able to fine tune methods specifically designed for real estate brokers to meet their recruiting goals.  For more information, please visit www.pcmsconsulting.com/webinars.  PCMS Consulting is hosting a 6 month coaching series called Camp REinvent. For more information visit www.campreinvent.com.