G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.
Hold on to Those Leads
Protect your company’s investment in client databases when sales associates quit the real estate business.
January 1, 2011
Harold Crye, CEO of Crye-Leike, REALTORS®, in Memphis, Tenn., says the real estate downturn has prompted record numbers of his company’s sales associates to leave the business. Some don’t make an abrupt departure but rather "fade away," he says. "They still have their license, but they’re doing less and less work. There’s not always a clear-cut decision that they’re leaving."
Though few brokers ask sales associates to leave their lead database behind when they switch companies, it’s a different matter when agents quit the business entirely. Whatever their method of departure, as a broker-owner you need to protect your investment in their client database.
During sales associates’ tenure at your company, you may have funneled them hundreds, if not thousands, of leads. If they walk away without passing their database to another sales associate at your company, everyone’s hard work evaporates.
That’s why it’s so important to protect the leads your company has paid good money to generate. Here are steps for a smooth transition when sales associates depart.
Create an Exit Plan
Set up a system to broach this sensitive subject with all of your sales associates. Carol Johnson, president of The Recruiting Pipeline, an online network for real estate professionals based in Schaumburg, Ill., recommends including it as part of your overall training. Help associates see that they are building a sustainable business that can be sold, shared, or passed on in the future.
"Explain that every sales associate needs an exit strategy because even if they don’t want to leave the business, they might have to go to take care of elderly relatives or deal with other issues," Johnson says. Ask each associate specific questions: Do you protect yourself and your business by having an exit strategy that ensures that your database is in the best digital condition possible? Do you already partner with another sales associate as backup when you go on vacation?
Paul Mydelski, broker-owner of RE/MAX Leading Edge in Winchester, Mass., has a transfer system for sales associates who leave the business or move away. "We set sales associates up with another associate who’ll inherit their book of business over time," he explains. "The inheriting associate takes over the day-to-day management of the leads and works out a financial agreement with the retiring sales associate."
Agreements vary; in some cases, the inheriting associate will pay a referral fee to the retired associate on any sales that come from the leads for the first year, a reduced fee for sales that come within the next year, and so on for as long as five years.
"It’s up to sales associates to agree on the commission or referral share," Mydelski says. "They’re in complete control of their business, and I don’t interfere with the plan they set up."
Jump Into Action
Despite your efforts to help sales associates prepare for their potential departure, some simply will not have done the necessary planning. In those situations, your job is to facilitate on-the-spot strategies.
Crye says he simply asks them what they’ll do with their database. "If they haven’t already thought of it, once that idea blossoms, they’ll want to find someone who works in their own image. The manager’s goal is to plant that seed."