G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine.
Recruiting and Increasing Sales & Listings
November 1, 1996
Rose & Kreuth's Co-Op Celebration
Chairman and CEO: Jim V. Rose Sr
Location: Virginia Beach, Va.
Size: 223 salespeople
Yes, Virginia, there is a way to increase sales and listings and recruit salespeople all at the same time. And, coincidentally, it took place in a state with your name.
Rose & Kreuth Realty Corp. created Celebrating You--Co-Op '95, which allowed salespeople both at Rose & Kreuth and at cooperating companies to win prizes for selling the company's listings.
''We wanted to thank the co-op salespeople and celebrate them for selling our listings,'' says Jim V. Rose Sr. ''We had a casino night, horse races, auctions, and drawings, all to provide prizes and recognize them.''
To qualify, salespeople had to sell at least one Rose & Kreuth listing from January through October of 1995. ''The program wasn't intended to actively recruit salespeople but to cause them to look at Rose & Kreuth and say, ‘I’d like to be in an environment of learning and sharing,''' says Rose. ''It also became a good listing tool because it showed sellers we were committed to cooperating with the salespeople in our community.''
Each time salespeople sold a Rose & Kreuth listing, they'd get ''starbucks'' equivalent to the listing's sales price. The company created five levels of prizes. The award for the top level, for salespeople who'd sold five or more Rose & Kreuth listings, was a home entertainment system worth $6,000, including installation. Other prizes included laptop computers and a new Cadillac lease, including insurance, for 90 days. At the casino night, salespeople received chips in the amount of their sales volume to use at gaming tables, to bet on horse races, or to spend at an auction of prizes.
The company promoted the plan by regularly sending all co-op salespeople its newsletter, Perspectives. ''The newsletter wasn't directed to co-op salespeople,'' Rose says, ''It covered everything from internal company news to what the company was doing in the community. But on the back cover, we thanked co-op salespeople for doing business with us and told them the level they'd qualified for.''
The program cost Rose & Kreuth about $22,000, much of which was covered from contributions by local builders and insurance and mortgage companies. ''They either gave a prize or contributed monetarily to the program,'' Rose says. ''So when it was all over, it hadn't really cost Rose & Kreuth that many dollars.''
When setting up the program, the company had to make sure it wasn't violating the Code of Ethics or the Real Estate Settlement Procedures Act. ''Under the Code, anything salespeople receive must be through their broker,'' says Rose. ''So we had to get other brokers to sign a certificate allowing their salespeople to receive prizes. Many brokers applauded the program because it encouraged their salespeople to do more transactions.''
As for RESPA, Rose says, ''Nobody could find anything that violated RESPA, because sponsor prizes weren't directed at any particular salesperson, and affiliated businesses were just recognized as the event's cosponsors.''
The program's results? Rose & Kreuth's number of co-op transactions increased 27 percent over what it had been in 1994, and the number of individual salespeople and brokers participating in co-op transactions increased 18 percent.
In addition, there are signs of the intangible results the company was seeking, despite the fact that the company didn't outwardly recruit other salespeople through the program. ''If salespeople called and asked, ‘How am I doing? Have you got my last transaction in?' we did no hard-sell recruiting,'' says Rose.
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