The Sales Doctors

The “doctors” make some house calls to diagnose three companies’ sales problems. Could their treatments bolster your bottom line?

April 1, 2000

There’s no substitute for being there. Everyone knows that in order to understand what’s really going on in an office, you have to see how the desks are aligned and where the water cooler is located. So we invited three of the country’s top sales "clinicians"--Ralph Roberts, Danielle Kennedy, and Floyd Wickman--to visit three very different companies with three very different operations. We selected a trio that represented a range of company structures typical of your business: a small-town, single-office company; a salesperson with two assistants; and a multioffice company. What follows are the experts’ prescriptions for improving those operations. None of the companies were drowning, but each felt it could benefit from some expert advice. We think you will, too.

THE SELLING DOCTORS

Ralph Roberts is the author of Walk Like a Giant, Sell Like a Madman and 52 Weeks of Sales Success as well as a regular contributor to REALTOR® Magazine and other publications. Time magazine has called him “the best-selling [real estate professional] in America.” He’s also the owner of Ralph R. Roberts Real Estate in Warren, Mich.

Danielle Kennedy sold more than a billion dollars’ worth of real estate before becoming a full-time writer and speaker on sales and marketing topics. In 1996 she was inducted into the Sales and Marketing Executives International Hall of Fame. Among her books are How to List and Sell Real Estate in the 21st Century, Double Your Income in Real Estate Sales, and Seven Figure Selling.

Floyd Wickman is the founder of Floyd Wickman Courses, the largest sales training firm in the real estate industry. More than 100,000 salespeople have taken his well-known Sweathogs program. He’s also the author of five books, including Successful Strategies for Real Estate Agents, The Wickman Formula, and most recently, Mentoring. Wickman, a member of the National Speakers Association’s Speakers Hall of Fame, has also “gone platinum” by selling more than 1 million educational cassettes.

Single-office company: Reclaiming the top spot

Coldwell Banker Middleton and Associates, REALTORS®, Orangeburg, S.C.

“We were the No. 1 company in town until two of our competitors merged,” says Ken Middleton, owner of Coldwell Banker Middleton and Associates, REALTORS®, a single-office operation with 16 full- and part-time salespeople in Orangeburg, S.C. The company, which did about $5 million in volume last year, was founded in the 1950s by Ken’s father, Earl. The company also owns insurance and property management companies, which are headquartered next door to the real estate operation on a prominent downtown block. According to Ken, the merger was “a wake-up call” that told him it was time to reinvigorate the company’s sales operations. “We got a little complacent over the years,” he says. “I want to take whatever steps I need to take to get us back to being No. 1.”

Wickman: This company was built by people who knew the basics of real estate management. Years of doing the “same old, same old,” however, have left management a little stale.

The company needs to generate about 25 percent more listings every month if it wants to reclaim the top slot. To do that, it’s going to need some fresh talent.

Ken needs to create a recruiting system that can be partly delegated to an assistant. Right now, he’s talking to everybody who walks in the door. It’s too much. He needs to let an assistant prequalify people so that he talks only to candidates who are ready, willing, and able to enter the organization.

Currently, there’s very little accountability among the sales staff. The salespeople have to know what is expected of them and what the rewards will be if they make their goals. There should be a chart posted in the office showing the current company listing goal and how close they are to achieving it.

I recommend that Kenkick off a sales contest in the next 30 days and make it something the salespeople can definitely win with a little extra effort. There should be a monetary prize, but Ken should also make it personal--tell them that if they make the goal, he’ll wear a silly hat for a day or do some crazy stunt. That’s important. The best salespeople are not motivated solely by money.

Kennedy: Part of a company’s long-term success is its ability to recreate itself in changing times. Middleton is learning that lesson.

Ken’s sales team is a generous group that in the past has focused on helping low-income families achieve homeownership. This market segment, however, isn’t much of a profit center for the company. The company needs to recruit salespeople who can work other segments.

Very little consistent business development is going on right now. More events need to be scheduled, such as Wednesday night telethons, farm days for team door-knocking in the community, the sponsoring of holiday parties, and participation in local charities.

For morale and training purposes, Ken should begin regular war story meetings so that salespeople can get together to relate their frustrations and problems--and also their successes--in a supportive environment.

Ken is currently listing and selling in addition to managing. It’s a very tight schedule. But I think he should continue to do both for at least another 18 months because his productivity is needed to pump cash into the company. But he can save time by establishing some guidelines for the staff. He should request that salespeople use good judgment before they interrupt him with problems, and he should also outline on paper what are and aren’t problems that warrant his attention.

Roberts: The first thing that struck me about this company was its market. The population of Orangeburg is about 40,000 people, and there were 1,130 transactions last year. There really isn’t much market share left to grab.

For that reason, the company needs to cut expenses and identify some new profit centers.

The company shares about 2,000 square feet of space with its property management and insurance divisions. I think a new location would be a breath of fresh air. It would not only give the real estate company an identity distinct from the other family ventures but also allow for a grand opening celebration and the free publicity that goes with it. Practically, a new facility would also provide better meeting and conference rooms and make recruiting easier.

I wouldn’t recommend focusing too much attention on new salespeople. The only way to get more market share in a market such as Orangeburg is to go after established salespeople who can bring business with them.

Before Ken hires anybody, though, he should focus on lowering expenses in the office. Six of his 16 salespeople made less than $15,000 in commissions last year. There are two ways to go here. One is to set minimum levels of production for everyone. The other is to start charging salespeople rent. Either way, Ken will get turnover, which is healthy.

Sales team: Bonding with customers

Eric Blackburn, Keller Williams, Overland Park, Kan.

“We’re strong in prospecting, but we need to get stronger,” says Eric Blackburn, a salesperson with Keller Williams in the Kansas City, Kan., suburb of Overland Park. Blackburn represents a trend in real estate: the sales team. He has two full-time assistants as well as a part-time buyer’s assistant and a part-time general office person. Blackburn moved to Keller Williams last fall after nine years with Prudential in the same neighborhood. His volume last year was $13 million, down $5 million from his 1998 volume. He attributes the drop to the move and says the team will have to work harder and smarter in the coming year to achieve its sales goals. His strategy for doing so includes a stepped-up prospecting effort as well as developing a solid referral base.

Wickman: Eric moved to Keller Williams, which is just getting established in this market, and did about 70 percent of his previous year’s volume. He’s going to have to work a little harder to get back to his old volume, but there’s no reason it won’t happen.

Eric needs to be more consistent with prospecting. Basically, the team members prospect when they have time. And, of course, nobody ever has time. They have to learn to prospect during scheduled times--probably 45 minutes a day--and not let anything interfere with it.

He also needs to work harder at staying in touch with past clients. He’s doing that already to some degree. He has a computer program that automatically calls his current client base. If a person answers, it disconnects. But if an answering machine picks up, it plays a recording of Eric saying, “Hi, how are you, just thought I’d give you a call,"--that kind of thing. I don’t think this would work for prospecting, but it’s great for staying in touch.

Finally, he could do more with his listing presentations. He currently uses a flip chart when he goes out to list a house. That may be OK for older clients but not Gen Xers. They expect to see a laptop. So do FSBOS. In both situations, you want to demonstrate your mastery of the market. A laptop goes a long way in making that point.

Kennedy: Eric and his team are a good example of the new generation of salespeople who’ve come along in the past few years. They joined the industry right out of college and possess the kind of business skills and knowledge that many older practitioners didn’t have until much later in their careers.

Eric’s team is very organized, and that’s good.

Where I think they could use some help is in the area of prospecting and in building long-term relationships.

Eric built the business on cold calling. There’s nothing wrong with that. But he needs to work more niches and find some new profit centers. FSBOS and open houses are two areas I think he and his team should consider. Open houses, in particular, are a great form of advertising. I used to do two or three a day. Not only do they get the word out about a particular listing, but they also serve as a showcase for the neighborhood. And they don’t have to take all morning. Limit them to two hours.

Selling real estate is a relationship business, and relationships don’t happen unless they’re cultivated. Right now, Eric doesn’t attend closings. He should. It’s the little things that count when you’re building up a referral base--the closing gifts, occasional visits, and cards and calls for birthdays. He could also do more with testimonials from past customers. They are a terrific--and inexpensive--marketing tool.

Roberts: The Blackburn team is made up of Eric Blackburn and his two assistants, Jane Bell and Debi Brennan. There are many aspects of Eric’s operation that impress me.

To start with, he has gone out of his way to identify and work with quality people who know what they’re doing. This is an important time in the team’s growth. Both Jane and Debi are ready to spread their wings and fly. Jane could easily run a buyer’s or listing department, and Debi is a perfect candidate to head up some yet-to-be-defined new profit center for the company. To do that, however, they’ll have to be freed from their day-to-day support staff tasks.

Since Eric works in an affordable market, he could produce many more buyer leads by implementing regular first-time homebuyer seminars. Jane could manage the events, and the new leads could be assigned to a new buyer’s representative.

In addition, given the amount of business the seminars are likely to generate, Eric could probably persuade a mortgage company to sponsor or cosponsor the events.

There are also a few technological time-savers from which he could benefit. Eric currently handles all his own accounting and writes out all his checks by hand. He could save hundreds of hours a year simply by implementing some business accounting software such as QuickBooks or QuickBooks Pro.

Multioffice company: Listing and Recruiting

Gallery of Homes/Mulhearn, REALTORS®, Bellflower, Calif.

“We have a lot of turnover with our buyer specialists,” says Bruce Mulhearn, owner of Gallery of Homes/Mulhearn, REALTORS®, in the Los Angeles suburb of Bellflower, Calif. The company, which Mulhearn founded in 1967, has 12 offices and 650 salespeople. About 40 percent of the customers are Hispanic. The volume last year was about $700 million. The company also has a very successful mortgage business--about 65 percent of the mortgages are handled in-house. Overall, Mulhearn says, the company and the market are booming. His main concern is recruiting. The company hired 180 new salespeople last year and terminated 90, “which is more than I would like,” he says.

Wickman: This is a very exciting, even visionary company in many ways. It bats a thousand when it comes to motivating and retaining top producers. There are only a few areas in which I think some changes should be made.

The first is in listing training. Right now the vast majority of the company’s energies and income go into attracting new salespeople to work with first-time buyers. The new salespeople are fed a steady stream of leads from the company’s lead generation department and sent out into the market to try to convert the leads into sales.

But ultimately the heart of any successful real estate sales career is listings. That’s where the money is, for the simple reason that you can handle more sellers than buyers at any one time. It takes, on average, about 30 percent more time to service a buyer than a seller. All the top producers at Mulhearn are listers.

More listing training would help solve the turnover problem.

The company has a mentoring program in place, but from what I can tell, it’s only partly successful. That isn’t unusual. Most mentoring programs are too controlling: They assign new salespeople to veterans arbitrarily and expect them to get along. But mentoring is different from training. Because mentoring is more personal, mentors and protégés need to find one another to some degree.

Kennedy: Mulhearn’s team is full of power. There’s so much talent here. The managers are multicultural and bilingual, as is the customer base. One of the company’s more innovative ventures is a Hispanic infomercial.

Things could improve, I think, in the areas of recruiting and training.

A big issue for the company is, who is it trying to recruit? Right now most of the energy at company headquarters is going into recruiting buyer specialists who in turn feed the mortgage business. But the mortgage business is only one profit center among many. It shouldn’t dominate the overall mission of the company.

At the moment, the company is experiencing high turnover, and I think part of the reason is the recruiting ads. Ads such as “We provide leads to get you making money fast” are a big mistake. The best salespeople are risk takers and self-starters, but this ad is primarily designed to attract people who need a paycheck every Friday.

Mulhearn could also be more discriminating in its recruiting interviews. Why not involve some seasoned superstars in the selection process? As the old saying goes, it takes one to know one.

Mulhearn also requires all applicants to take a personality test before meeting the recruiter. Personally, I haven’t seen many good results with testing. I think it just makes people nervous and uncomfortable.

Roberts: My real estate company uses the team approach with no independent salespeople, and I’m very happy with it. But if I ever decided that I wanted a traditional real estate operation, I’d copy much of what Bruce Mulhearn has set up.

Everything at Mulhearn is run as a system. The perfect example of that is the call center, which is located at the corporate headquarters and staffed by buyer specialists. An extensive marketing program generates calls from prospective buyers and renters, whom the buyer specialists attempt to convert into buyers. The calls--there were more than 200 on a recent day--cost the company about $5 each, and the success rate is about 30 percent. Not bad at all. But I think the return on investment could easily be raised by getting more experienced salespeople involved and also by installing a call center computer network and database software to track the leads. Right now, leads are handled mainly by new recruits. Seasoned practitioners, however, could follow up on leads that might otherwise fall through the cracks.

Another place where the company appears to be leaving money on the table is with its nonlicensed support staff. During my visit, I met several who’ve never been issued company business cards. Every single employee and independent contractor should have cards to hand out to family and friends.

Robert Sharoff is an architectural writer for The New York Times, Washington Post, Chicago Tribune, and Chicago Magazine. With photographer William Zbaren, he has produced books highlighting the architecture of Detroit and St. Louis. He is a former senior editor with REALTOR® Magazine.

Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.

Related