“20 Minutes of Successful Niche Secrets – EPISODE 65,”
Shift #2 – The Technology Market Shift with Glenn McQueenie
Glenn: Hi! It’s Glenn McQueenie, and welcome to Part 2 of my Success Series Podcast on the three shifts for 2019.
So the three shifts are that we have an economic shift that’s hitting a lot of the areas. The second shift is the technology shift on how we do real estate, and how that’s going to affect you in the future. And the third shift is the shift from logical, thinking, data-driven to more of the emotional intelligence shift that I think is required whenever you go into a shifted market. So I want to spend a lot of time talking about the top tactics for really doing that kind of work, because it really matters.
In the first episode, I talked a little bit about getting real and getting right, and just really getting your head in the game. Don’t be in denial about it when a shift happens. You’ve just got to go and play the game with the cards you’re dealt. I talked about having spectrums of complete failure and massive success in this real estate industry, but a lot of agents are sitting in the middle and are just trying to figure out how to get out of it. We talked about how shifts are slow, and then they happen really quickly when we’re transitioning from a seller’s market to a buyer’s market. I gave you some of the facts. What is a buyer’s market? A seller’s market? A transitional market? And then we gave you some strategies. Listen again, if you want. Just grab a piece of paper and write some of them down, because I think they’re going to really help you out as we enter into 2019. We also talked about how it’s all about maintaining your market share in a shift, and if you do, you actually gain market share when you come out of the shift. It’s also about being proactive about doing it and being aware that the government has a lot of policy levers that they can do to either make your life really amazing or really miserable. There are also the banks that can tighten or ease lending. There is the overall affordability index, which is a huge factor in when and how many people in any given market can actually afford to buy the median price home. So that’s what we covered in the first one.
In the second one, we’re going to talk more about the 12 Tactics of tough time. Again, this is almost like a book summary, so I’m going to give credit where credit’s due, and it’s from a book called “Shift: The 12 Tactics” by Gary Keller. What I’m going to try to do is put a little bit of a niche market spin on how we can really succeed and get out of it. So let’s start moving right into the 12 Tactics.
So tactic number one is get real and get right. This is the time when you actually decide what your priorities are, and then just focus them towards hitting your goal. At this point, you have three mental options. One is you can be a pessimist about it. You can panic and freeze. You can overreact and go, “Oh my God! The worst thing ever has just happened!” Or, you could be an optimist (that’s number two), where you could just deny and ignore that it’s even happening. You just decide not to react to the change and just pretend it’s business as usual. Really, overall, your feeling is, “Hey, nothing’s happened. Everyone needs to buy a house and sell a house.”
So I’m going to ask you today to be a bit more reactive, or more realistic – and that really requires you to be more calm and productive, and just realize that it’s not business as usual. You need to act proactively and aggressively and also know that history is on your side, because all that’s really happened is that the needs of the buyers and sellers have changed. Let me say that again: all that has really happened is the needs of the buyers and sellers have changed.
So when the market shifts, there are two shifts that you need to do. One is the mental shift, and the second is an action shift. This is where you might want to get out a pad of paper and really understand what we’re talking about here. The mental shift is just getting real about your situation, because when a shift occurs, confusion is going to follow. Don’t panic. Just understand there are two shifts: a mental shift and an action shift. There’s a saying that says, “Your life will either be about your problems or your opportunities.” And I’m going to tell you, in a mental shift, your opportunities actually become bigger. You can either choose to run towards what you most want, avoid and run away from your biggest fears, or just understand that you can’t control the market. All we can really do together is control our outlook and control our response. So that’s the mental shift. You have to just move with the market.
The action shift is, you have to get right into action, and into the right actions. Look at the whole totality of the situation, and just realize, “Okay. Not every listing is selling, so I’m going to have to take more listings in order to hit my goal.” It’s going to probably require you to go on more appointments to even get a listing. So you’re going to have to ramp up the other side of your business, which is go on more appointments just to get a listing. So if it used to be (when you were prospecting), that for every 20 appointments you might have gotten 10 listings, then you were 50/50 if it was cold business, and you’d probably be 80%-90% if it was referred business. You’re just going to have to go on more appointments, because a lot of people might want to move, but they just might not be able to move. You’re really going to have to discriminate about which listings you’re going to take on in this market, because what you do realize in a shift is that listings cost a lot of money. There’s a monthly fee, ongoing cost that you just have to keep doing. So you don’t want to be doing that – I’m telling you right now. So the action shift for you is you have to go into the ownership of lead generation and lead conversion. You just have to own both of those two things. They’re the most important activities that you can do, because in a shift, nothing becomes more critical than finding motivated buyers and sellers, and then closing them for an appointment. That becomes the game. You have to find motivated buyers (which is what I call buyer buyers), who have to buy, and motivated sellers (which are really seller sellers). So I should have said, your job is to find buyer buyers and seller sellers, who are motivated and have to move, and then close them for the appointment.
The second tactic is to start to shift and re-margin your business. What that means is, you have to re-expense your business. That’s the first action you should take when a market shifts. Peter Drucker said it famously. He said, “You can’t build a business by cutting back, but you can find your profit and save it by cutting back.” Every business, including yours, must make a profit, and in an up market, we acquire habits and things that don’t stop us in good times, but grind us to a halt in really bad times. We do so much right that the market covers up for any wrong we might do. Even mistakes get covered up, and you’ll see later on when I’m talking about bulletproofing your transactions – in a down market, every mistake can be fatal. In an up market, nobody cares because their house has gone up 5% or 10% since they bought it. So I would ask you, when you start thinking about re-margining your business or re-expensing your business, to just think that every dollar spent should return to its original amount, plus a reasonable profit. This is really where I say it’s a 4:1 or an 8:1 return. So you have to look at this. There’s no expense that is untouchable. There’s no cut that’s too small. You just must reduce your expenses to match your income, plus an acceptable profit margin. You can’t really spend your way out of a shift; but you can result your way out of it. So the whole key is to start going, “What can I re-margin? And how can I change my budget?” But that’s going to require you to change the way you think about things and the way you look at your business. The way to get your margin back under control is to cut your expenses and step up your lead generation. Now, you’ve got two big expenses. (If you’re a team, they’re much bigger). You’ve got payroll and lead generation. Now most people will immediately cut on payroll, but you have to start thinking of your staff as an investment. Before doing any de-hiring, you’ve got to try to slim down that payroll. Don’t cut the customer service, because people will want more. Don’t cut the budget you have for training and coaching, because this is an investment that will actually help you make money, and can more than pay for itself. But what you could do is cut some hours. You can combine positions. You can start offering more bonuses rather than salary increases. You can package out the people who aren’t the right fit anymore. But most importantly, start listening to what your staff really want. They’re very smart people, and they’ll tell you what their spidey sense is telling them to.
So here’s what we do to lower expenses. You’ve got to lower your costs. You need to generate revenue (but you only do that by generating leads). In order to make a profit, you just have to manage your expenses. When the market shifts, you must create a budget that matches your revenue, and this is what we call re-margining your business. Play red light, green light with any expenses. Grow your budget incrementally – more in line with an acceptable profit margin. That is a really great tactic for re-margining your business.
The third tactic is really about doing more with less. It’s called leverage. When a market shifts, your organization must shift too. A market shift can be an opportunity to evaluate, upgrade, and top-grade your business. It’s really the unsolicited gift of the shift. This is the time when you can re-assess and actually top-grade your people, because more talent will come back to you in the market. They might have just lost their job, and now you can get them a lot cheaper. This is also the time when you have to retool and upgrade your systems. This is the real gift of it. So let’s go back to the basics. You have to ask yourself now, “What are my business priorities? When do they need to get done? And who is the best person to do them?” And more importantly, “How should they be done?” There’s a big movement right now about, whenever you have a “how” to do something, you’re just the wrong “who.” The question becomes, “Who can do it who can finish this project cheaper and faster than I can, so I can spend more time in my high-value activities of real estate?” (getting listings, getting buyer contracts signed, negotiating offers, removing conditions, prospecting). That’s where you make a lot of money in real estate. The challenge in a shift is a lot of people, for some reason, go into more monkey time instead of making money time. This is when you really have to be vigilant and guard yourself against any monkey time. So that requires you to just go back to the fundamentals.
So here are the six fundamentals that you have to do as an agent. You have to lead generate, capture, and convert your prospects to appointments. You have to go and present to buyers and sellers and get an agreement (get contracts signed). You have to go and show buyers’ and sellers’ homes. You have to write and negotiate contracts. You have to coordinate the sale to closing (you don’t have to do it, but you need to have a system to do it). And also, you have the most important thing: you’ve got to manage money. You must look at your team (because we’re talking about leverage here), and understand that you’ve got two types of people on that team. You’ve got those who are directly employed to you and indirectly employed by you. Direct employees would be your assistant, your buyer agents, your listing specialists, etc. Your indirect would be all of your allied services. Now is the time to go around and top-grade that talent pool, too, just to make sure that you have the right people on your squad that are going to be able to do this.
So let’s get to tactic four, which is really about finding the motivated buyers. In order to find the motivated people, you really have to know your numbers. You have to know your numbers when the market’s up, and you have to know your numbers when the markets are down. You need to ramp up your lead generation, and you need to really change your messaging. What you’re going to find is your leads become fewer, so you just have to be able to attract more of them, get to them first, and be able to convert them faster than you ever have. Really focus on, who are your “yes’s,” “no’s,” and “maybes?” Your “yes’s” are anyone who said, “Yes, I’ve got to do business now.” Your “no’s” are “No, I’m not doing business now. I’m going to do it in the spring.” You thank them very much and you keep in touch with them. But we really have to drill down on the “maybes,” because the maybes are what kill your business. I’ve seen agents run a whole quarter with 10 maybes and never sell one home (because they’re either buyers whose expectation or money is $400,000, but every house they like is $550,000, or a seller whose house is worth $400,000, but they’re not going to give it away for under $500,000 or $550,000). “If the perfect opportunity comes…” or “If the stars align…” or “If someone overpays for my house…” – these are all “maybes,” and you need to get rid of them as quick as you can. The other question you have to ask yourself is: Do the sellers you’re talking to really need to sell? Will they actually price their home to sell? Will they get it in the proper condition to sell? Ask your buyers: Do they really need to buy? Are they going to listen to you? Do they understand that in any market, there are some really good buys? That’s really the key here on tactic number four. You’ve got to just lead generate until your fingers are bleeding, or your knuckles are bleeding, or in your niche market, you’re just talking to so many people in your target market and you have the right message to meet with them. That’s going to require you to also change some of your tactics to be more offer-response messaging, like, “Free List of the Top 10 Best Homes,” “The 10 Tactics to Sell Your House in a Divorce,” “The 10 Ways to Downsize and Make the Most Money You Possibly Can,” “10 Secrets to Getting the Home You Want for Cheaper Than You Thought,” “The 10 Best School Neighbourhoods to Move Into.” These are all where you start changing messaging so that you can actually get into the path of business. And also, don’t stay in the office. Get out of the house. Take it to the streets. Get out there. Seek, knock, talk to people. Go back to the belly business of what real estate’s all about.
I hope you enjoyed Part 2 of our shift tactics, and stay tuned, because Part 3 is coming out soon!