The 13%, 15% and 26% Difference

Just yesterday I found an article in the Integrity Solutions® toolbox that was written by Bill Kowalski, their Sr. VP. In it, Bill reveals a very recent market research survey of over one thousand sales executives from a diverse range of companies in both size and industries in North America, Europe and the Pacific Rim. It’s fascinating because the findings parallel my own unscientific survey of managers and small business owners in sales organizations within my own network. It seems that in today’s global economy, there is commonality in the priorities of sales executives regardless of geographic location: The # 1 priority is increasing sales, followed by increasing sales effectiveness, increasing market share, increasing customer loyalty and reducing sales cycle time.

Two primary strategies. The 1,040 firms in Bill’s study do two things to increase sales and sales effectiveness. They do sales training and implement a sales process. Not surprising so far, right? Here’s what blew me away though. Based on the data gathered, the organizations were placed into one of four categories. Here are the definitions of how they were categorized:

1. Level I firms do not have a formal sales training program or process – sales reps are left to their own devices about how best to sell.
2. Level II firms conduct sales training and have a formal sales process but only encourage reps to use the knowledge and principles introduced.
3. Level III firms conduct sales training, have a formal sales process and expect reps to apply the knowledge and principles introduced and follow their sales process.
4. Level IV firms conduct sales training and have a formal sales methodology and process. Sales reps are held accountable to practice and apply knowledge and principles learned and managers are also held accountable to provide coaching and feedback.

The following illustrates the percent of sales quota achieved of firms in each category:
Type of Firm and % Quota Achieved
Level I (60%)
Level II (54%)
Level III (59%)
Level IV (68%)

Incredible! Level I firms who provide no formal sales training or process achieved performance to quota that was 11% better than Level II firms who provide both sales training and process but only encourage people to apply what they have learned. Level III firms who also provide both sales training and a process and expect people to apply what is learned performed essentially the same as Level I firms who employ neither sales training or a formal sales process.

How can this be? It’s pretty simple, really, and it bears out all my years of “unscientific” observations of real estate organizations and sales people everywhere: Sales training and sales process either has no material impact on improving sales effectiveness, or they can actually hinder performance absent true accountability to insure knowledge learned is practiced and applied and there is steadfast adherence to a formal sales process. Why is there such a high fall-out rate for new real estate agents, even in companies where there is a great new agent training program?

In other words, without a formal process to hold people accountable to immediately apply and reinforce training material, retention falls at an accelerating rate. Consequently, there is little to no behavior change or performance improvement.

This is further backed by research conducted by G.V. Goodard and John R. Anderson. It’s known as the “Forgetting Curve” which illustrates that without reinforcement and application within 48 hours of a learning event 75% of the information covered is forgotten. I believe (as does Bill Kowalski) that if the sales training is “event based” it may even hinder performance due to creating cognitive dissonance. It’s a fancy term that simply means if an individual is introduced to knowledge or concepts they do not believe they are capable of applying, anxiety results that hinders performance. Think about it. How many times have you attended a seminar, workshop or course and thought, “that’s great, it sounds exciting, but I don’t really see myself doing it.”

Now, take one more look at Level IV firms’ performance to quota. It was 13%, 26% and 15% better than Level I, II and III firms, respectively. This clearly supports the notion that converting knowledge into performance requires accountability and the experience of practicing and applying what is learned. It also validates the importance of sales managers being held accountable for effectively coaching staff as this leadership activity is a strategically critical link in the performance improvement process.

Imagine. If you are a Level I, II or III real estate firm, what an increase of 13%, 15% or 26% in sales would mean to your organization if you became a Level IV firm?

Bottom line. To improve business growth in 2009 and beyond, coach your people. It will make all the difference.

Guest Blogger: Susan Ireland
email: Susan@SusanIrelandAssociates.com
website: SusanIrelandAssociates.com
703.591.6158

Real Estate Leaders’ 4th Q 09 Action Plan

It’s all about timing. As real estate industry leaders, we find ourselves in scary times. It seems like just yesterday we experienced a very different picture. We had economic expansion, low interest rates, easy credit and customers with seemingly limitless wealth. Okay, maybe I’m dreaming a bit but you must admit it wasn’t too long ago that times were quite different than they are today. Now we’re faced with foreclosures and short sales, bank bail-outs, declining property values, and the government take-over of the car industry. Did I mention the spiraling cost of health care?

As the threats continue, how do we survive and even prosper? How do we get more sales revenue? More importantly, how do we get it all done with fewer resources, shrinking profit margins and seemingly perpetual customer (not to mention personal) anxiety?

What I’m about to share with you are the three most powerful steps you can take as a real estate leader during Q4 ‘09. Take them now if you want to thrive in 2010.

1. BECOME CLEAR ON YOUR VISION
Vision is having a clear picture of where you’re going – not just a clear goal, but a strong commitment to achieving it. It’s expressed in your actions and confidence level. The visionary leader has a deep belief that their objectives are possible and that they’ll find a way to achieve them. As a real estate leader, you have an important competitive advantage. You are the queen of your company or office, so you can set the direction and do it with an authentic passion to deliver on the vision. You can continuously be designing, revising, and carrying out the plan of action. When your vision is energized by a strong mission or purpose, you become unstoppable.

Are you clear about your vision? Do you know where you’re going? Do your people, your customers, and the rest of the world? Is it being clearly articulated on a regular basis so everyone ‘gets’ it?

2. INVEST IN A COURAGEOUS CULTURE (BACKED BY A STRONG TEAM)
A courageous culture is critical when the stakes are high and uncertainty abounds. Successful real estate leaders must have courage, determination, backbone and persistence. Let your courage spill over to your entire team – employees and sales associates. And don’t forget your ‘virtual’ team. They are the vendors you work with, colleagues in the industry and your suppliers. Communicate with them often – form alliances, build camaraderie. Strong teams achieve more than any individual can, reinforcing one another to do what they could never do on their own. Want to expand your team? Form a mastermind group with your peers. Mastermind groups can be run very inexpensively and the agenda is set by the group based on group’s needs. It’s a great way to share best practices, learn new strategies from one another, and hold each other accountable for the things you know you should do but don’t.

3. GET AND STAY FOCUSED
Finally, focus on what’s working. You can create calm out of chaos by identifying the things that have worked for you up until now. Write them down. Determine why they’ve worked and resolve to stay focused on them. And by all means, quit focusing on the ’small stuff’. Put your energy into the most important company priorities and be sure these get done first. To pull this off, deal with at most three to five things at a time. Don’t do other things until these top priorities get done. Need help staying focused? Work with a peer or colleague. Agree to call each other regularly to keep each other on track.

News of bankruptcy, foreclosures, terrorism, bank failures and corporate greed persistently remind us of the threats we face. In some ways, these things may seem like the new normal. But as a real estate leader, you don’t have to accept them as the new normal. Take steps now, in the 4th quarter 2009, to confront these realities. Do it with vision, courage and focus!

Guest Blogger: Susan Ireland
email: Susan@SusanIrelandAssociates.com
website: SusanIrelandAssociates.com
703.591.6158

Very early on in my real estate career, I worked part-time as a residential marketing director for one of the oldest real estate development and management firms in the country. The residential division of this company was treated like a red-headed stepchild by the owners.

As you may recall, the development, commercial sales, and management divisions were the money makers back in the mid 1990’s. The owners (”the boys”) kept the residential side open because their late father started the company as a residential real estate brokerage and they promised they would never close the doors.

While working there, I had the opportunity to experience several management styles which made a lasting impression on me and helped set the tone for my own style as a manager.

Depending on who he was speaking with at the time, our broker had to wear many different management hats. I would watch him with the agents, the staff, and “the boys”. One day I asked, “How do you determine which management hat to wear?” And, his response surprised me.

“I wear so many hats during the day because I have to deal with so many different personalities. For instance, when a deal gets shaky with an agent, I put on my firefighter hat. The agent is in such a tizzy they can’t see a positive outcome due to all the little fires that started once the contract was signed. I sit down with them, go through the entire file, and help them sort out the various reports. I then work with them on a solution for their client or the other agent. We role-play the discussion and objections. If I have to, I tell them we will not accept the deal, and the fire is out for now.”

Okay, I understood that hat, but I was curious about the hat he wore with top producers.

“Well this hat has several shades and styles,” he said. “You see the number one agent has been in the business as long as I have, so the hat I wear with him is one of a sounding board, a consultant, and a fighter.”

“A fighter,” I questioned?

“When you work for a large company as we do, the boys look at the bottom line – what we are making and what are we paying out. So, when they want to reduce commission, I have to fight them to be fair and re-educate them on why it’s important to have the best.”

So, what other hats did he have to wear? “Well, it really depends on the day and in some cases the time, if they are active with buyers or sellers, or if they aren’t working any deals at all. Then the hat I wear becomes that of a therapist, cheerleader, or the person that kicks them in the pants and tells them to stop whining and start working their referrals.”

Well, we covered the manager’s hats in dealing with the agents, but what about the hat for the support staff? “That’s the most comfortable hat I wear. I manage the staff with objectives and goals so that we are able to meet our yearly budgets. I show them appreciation for the work they do and thank them every day for not being independent contractors!”

I asked him if he enjoyed wearing all of these hats in a given day.

“I couldn’t see myself wearing only one hat for the rest of my life. You see, I love being a manager of a residential sales office. Every day is different, so I don’t get bored. And at the end of the day when I lock up, I often smile. I know that I’ve helped someone fulfill the American dream of owning a home, and helped my agents and staff obtain their dreams, too.”

The moral of the story is that if you are a sales manager – enjoy your various hats. And if you aren’t wearing multiple hats, are you doing a disservice to your office and yourself?

Think about it.

In a recent poll, I asked managers, “What is the biggest challenge you face in 2009?” They answered, “Increasing sales and doing more with fewer resources.” Before you can address these challenges, I encourage you to take care of what’s likely to be the biggest roadblock you have, and you may not even realize it’s there.

The elephant in the room.

Your company feels the economic pain. Sales are down, morale is low, and your people know you have to make cuts. Everyone feels tired, overworked and taken for granted. Underneath it all is fear, anxiety, and even paranoia. It all points to INSECURITY – the elephant in the room, and it’s keeping your people stuck in low productivity levels.

Let me backtrack for a minute. All people are motivated by wants, needs, and values – for hope of gain and relief of pain. As a leader who gets the most out of people, one of your most important jobs is to help people relieve the pain of insecurity. Indeed, “security” is one of the basic levels in the progression of human needs . . .people need to feel safe, experience freedom, control choices and determine their own direction. If you can help them do this, you’ll see their productivity increase. And no, you don’t have to be a junior psychiatrist to do it. Just follow this simple process:

1. Make an effort to re-connect with your people on an individual level. I’m not talking about group discussions and team brainstorm meetings. Your mission is to make a genuine attempt to understand where your people are coming from without filters or biases. To do that you must communicate with them individually, in a safe and supportive environment.
2. Schedule time to meet with each person one-on-one for 20 – 30 minutes. Mostly to listen. Don’t challenge, disagree, or lecture. Don’t try to solve their problems. Share what is currently happening as well as the game plan for surviving the recession. Ask for their ideas. Ask, “If you could make progress on any one goal in the next 30 – 60 days, what would it be?”
3. Begin a weekly series of 20 – 30 minute “listening sessions” with each person. Ask questions that get them talking and thereby discovering for themselves things that are going on in their lives that impact their job performance. Help them uncover that elephant in the room. Again, don’t give advice. Just listen and attempt to understand their feelings. Ask them what actions they could take to overcome the elephant. Many times I’ve listened to people, asking occasional questions that cause them to look deeper within themselves, only to have them smile, relax and say, “Thank you, you’ve helped me so much!”
4. Give specific praise. I’m not talking about the generic “you did a great job,” or “you’re a wonderful sales person.” I mean dig deep! Recognize specific talents or skills you’ve observed and value in that person. Connect these to the positives (strengths) you see in them. One of the best ways to do this is through the use of handwritten notes.
5. Finally, use these sessions to challenge your people to be part of the solution. Empower them to take ownership of their own success and that of the company. Encourage them to stretch outside their comfort zones. Hold them accountable to the actions they commit to taking.

Good luck!

Guest Blogger: Susan Ireland
email: Susan@SusanIrelandAssociates.com
website: SusanIrelandAssociates.com
703.591.6158

Translation: You’re not the Eveready Bunny.

A real estate manager recently asked me to help him with a problem I’m seeing with more and more frequency. It’s burn-out . . . but he didn’t call it that . . . at first. It seems that since the beginning of the real estate market decline, his company has downsized staff in nearly every department and the branch offices (his included) were hit hard. Budgets have been slashed and the people remaining are frazzled . . . faced with longer work hours, larger workloads and an overall feeling of “what’s next?”

A little more background: Lately, the manager finds himself spending most of his days fighting fires, dealing with one problem after the other. And worst of all, sales continue to decline. He knows he and his agents could be doing better (despite the economy), but no matter what he does, nothing seems to improve. Sound familiar?

I recommended an action step to help him address the things he can control (that’s the burn-out) by tapping into available resources just outside his own real estate office. In addition to addressing the burn-out, the side benefit is he’ll gain new ideas, new thinking and the solutions he needs to re-build his office. What is it?

Start or join a Mastermind Group. The benefits are big and the costs are low:

• Built-in support system. Being a part of a mastermind group boosts energy and confidence. It helps overcome the burn-out factor and plugs its members into the experience and talents of a peer group.

• Practical advice. Members of the group provide ideas and guidance about things other members may not be good at.

• Novel solutions. It’s easy to get tunnel-vision when you’re working on the same issues and struggles day after day. A mastermind group helps its members get a different view of their individual situation and to think outside of the box when dealing with business challenges.

• Accountability. Mastermind groups set and share goals with one another, and hold each other accountable to reaching them. They offer their members encouragement and advice if they fall behind in meeting targets; support and praise as they reach each new milestone.

• Convenience. Most mastermind groups meet on a pre-scheduled basis; usually bi-weekly or monthly via teleconference. No need to travel, fight traffic, or take enormous blocks of time away from the office and family. Members of the group “take turns” leading the meetings or enlist the help of an experienced coach/facilitator.

• Affordability. Masterminding can be achieved for little cost. Nowadays, there are free conference call services, and if the group self-facilitates, the only cost is for each individual’s telephone calling plan. Or for a nominal fee, the group can obtain a coach/facilitator to lead the meetings, keep the group on track and introduce additional support mechanisms.

Do mastermind groups succeed in helping managers re-charge their batteries? A recent survey of leaders and managers who had participated in peer mastermind groups revealed that over 75% said the experience was highly beneficial. Pretty good odds in today’s world.

Guest Blogger: Susan Ireland
email: Susan@SusanIrelandAssociates.com
website: SusanIrelandAssociates.com
703.591.6158