SYNOPSIS: On career
important items, we don't save any money by not taking on an
expense. Article discusses different ways of spending a little
more in order to make a lot more. 1500 words.
OF DOING BUSINESS
At a recent seminar I was promoting a series of listing and sales
workshops I offer and the inevitable question came from an audience
member: "What does it cost?" I answered with another
question: "That depends. Do you mean if you do it, or if
you don't?" Certainly there are costs incurred from actions
we do not take. Consider the old saw, "if you think
education is expensive, try ignorance."
The actual cost of doing business involves both the amount you
spend and the losses from what you don't. Take computer software,
for example. There is a variety of industry-specific and general
application software programs called contact managers. These
programs manage your contacts with clients, customers and prospects
so that if you are supposed to call them, write them or see them,
it will either happen or you have to order your computer to stop
telling you to follow up. That's important because the number
one cause of lost business is that our prospects slip through
the cracks. Then by the time you follow up (if you remember to
at all), they've either signed with another sales person or altogether
changed their minds about buying and selling.
Contact managers are expensive to buy (generally in the $500
range). But each transaction you lose is worth perhaps $2,000
to you, and without consistent and thorough follow through, you
stand to lose fifteen to thirty such transactions each year.
Why save $500 by not buying a contact manager and lose $30,000
to $60,000 for not using one? You see survey after survey that
real estate clients were sufficiently satisfied with their last
agent that they would use him or her again - but have not heard
from the agent in several years and don't remember the agent's
Star producer Demetria Chadbourne of Gorham ME (180 closings/$20
million in a good year) says the single best investment she can
make is in keeping in touch with her past clients, who represent
80% of her business. Each dollar she spends on keeping in touch
with that group comes back exponentially. Notice the difference:
most agents don't follow up at all, while star performers never
let a past client forget where they can find us. How will you
apply that lesson?
What does it cost to conduct a program of personal promotion
to keep your name, your availability and your successes in front
of people? David Lentz of Lentz Design in Chicago says your budget
for full color postcards like he produces might run as little
as $50 a month plus postage. And what would all that promotion
be worth? Depending on the turn-over of property in your area,
you could have anywhere from an extra three to twelve closings
each year. Demetria Chadbourne spends 50% of her advertising
dollars on personal promotion and 50% on her properties. But
her personal promotion tracks to a 110% rate of return while
property ads only yield about a 50% return on investment. Therefore
every ad for a property includes an ad for her personally.
Cheri Rufino has excelled in her College Station TX market for
35+ years and enjoys about a 90% referral/repeat business rate.
Several years ago she began a program of personal promotions
(postcards, etc.) and experienced a 50% increase in production
in the next year alone. It's paying off; in a next year, Cheri
and her team of 2½ assistants closed 140 transaction at
$14 million in a small Texas college town. Today among other
activities Cheri hosts an annual client appreciation party at
her home during the holiday season. It's characteristic of her
to want to touch her clients and greet them in such a personal
way. At a cost of $2,500 to $3,000 to host such an event, you'd
better want that many people in your home.
like so many other exceptional performers we've met, Cheri insists
that it's more than a genuine thank you. She also gets enough
business after the party that the event pays for itself in the
next 30 days. All the other referral business traced to that
party is icing on the cake, which makes her client appreciation
party a wonderfully effective expense.
To complete a course of study earning you the Certified Residential
Specialist designation, you will spend a couple thousand dollars,
top to bottom, plus travel expenses to get you to any programs
held outside your area. The value? Average income for a Realtor®
is $37,500 while CRS members earned an average of $85,276. CRS
designees are just 4.9% of the total Realtor® population
but are involved in 25% of all transactions. Let's see: spend
a couple thousand once to earn the designation, then average
an annual $48,000 pay raise thereafter. Worth it? You do the
Steve Stewart Seminars is approved in a variety of states to
offer continuing education credits upon the successful completion
of certain courses. But I happen to believe that all states should
drop their continuing education requirements. That's because
many states won't allow you to earn credits by learning anything
that will help you work with clients. What's holding you back
from higher production: being unfamiliar with your new HP calculator,
or not having enough buyers and sellers wanting to work with
The net result of current education policy in most states (administered
by people who have never sold a house) is that agents frequently
refuse to attend any program that won't earn them credit hours.
That puts all the focus on issues like tenant evictions and federal
monetary policy, rather than on getting and satisfying more buyers
and sellers. How smart is that? Paul Volker never sent you a
client. You don't want to spend your life in motivational seminars.
But if you spent three or four times the hours in seminars that
you do now, you could eliminate 80% to 90% of the dead buyers
and uncommitted sellers that you deal with. That would save more
time and earn you a fortune!
After a recent R.S. Council Sell-A-Bration conference, I was
looking through the collected business cards and comparing them
to other stacks of cards collected at seminars around the country
earlier that week. The difference was striking; the Sell-A-Bration
attendees all had cards that were more colorful, informative,
most with photographs, and printed on heavy, expensive stock.
Yet these people give their cards out easily and readily compared
to other licensees.
I collect a large number of business cards from active sales
people at my seminars. All cards are entered into our computer
database; once in there, you can never get out and you are on
the mailing list as long as I can still get mail to you. But
twice a month when going through the collected cards, we'll find
one from an agent who's down to his last ten cards and not sure
whether he should re-order. So he's been Xeroxing his last ten
cards on the office copier. Classy. They are printed askew on
20 lb. bond paper and cut out with a pair of scissors with rough
cut sides (hey, it's faster to hand cut a couple sheets at a
time ... even if the cuts are crooked!). Go ahead, save money
on card printing, hand them out like you're proud of them and
see how much money you save!
Every good expense you incur is a profit center, not a true expense
item. Good expenditures make you more than they cost you. Should
you print nice flyers or plain flyers on white paper? Should
you save by not washing your car, or clean it regularly never
knowing when you might have a buyer who wants to see property?
The current cost of a four-year college education in the U.S.
runs between $50,000 and $120,000 depending on location and public
vs. private schools. That's a total, one-time cost. But high
school grads earn $18,737/year while college grads earn $32,629/year
- $800,000 more over a lifetime (Doctorate holders pull in $1.5
million more than high school grads over a lifetime), and typically
spend their lives with more interesting work to do.
The cost of having braces on your teeth as an adult will run
approximately $3,500 if you needed them. What would a great smile
be worth to your sense of confidence?
A buyer's home protection plan costs around $400 in most areas
of the country. But homes with such plans sell in half the time
(and half the house payments) as homes without, and they sell
for $500 to $2,000 more than homes without. For $400 payable
at the closing, that's a great expense.
In short, when you face a good expense - one that pays you more
than it costs you, you don't save a nickel by not taking action.
Look around your desk and your in-coming mail. What do you see
you could invest in? Then, as Nike would say, Just do it.