If there’s one thing I’ve learned from coaching top teams for the last 15+ years, it’s this: to be successful, you have to be a strong leader. Sounds simple, right? But the biggest issue most teams face is poor leadership. I’m going to break down the top five leadership mistakes that are ruining your real estate business and tell you the best way to stop these problems in their tracks. This advice has taken teams from struggling and disorganized to productive and driven.
It all begins with you. Leaders need to have a strong vision of what they want from their business, and then they’ll get the buy-in of team members. Too many people start a team because they need help handling leads – they do it as a reaction to a problem, not as a desire to grow.
The biggest mistake leaders make is not having vision or clarity – i.e. they don’t know what they truly want. They put the sale before the business as a whole. Sir Richard Branson said it best: “If you look after your staff, they’ll look after your customers. It’s that simple.” Many leaders make the mistake of putting the sale first and the Team 2nd. For example, they’ll miss staff meetings or put them off to run after a sale, vs. spending time working on the team as a whole. This happens for several reasons:
a. No clarity of vision as to the purpose of the business
b. No clarity of roles and responsibilities of each team member – especially the leader
c. Lack of communication when providing team members with expectations and timelines
d. Lack of accountability when it comes to each team member achieving their goals
A great leader knows their numbers and making decisions based on assumptions can be disastrous. Profit and loss, the cost to list a property, monthly expenses, conversion rates on appointments for themselves and each team member, the cost of an expired listing, what their return on investment (ROI) is for every marketing effort etc.
The purpose of owning a business is to make a profit. If you’re not aware of your costs, how can you run a profitable business? A great leader reviews their profit and loss monthly – or at least quarterly – to ensure that they’re on track with their goals.
More specifically: fear of team members leaving, therefore increasing splits and making them too high for the business. Leaders who try to keep team members with high splits usually either don’t make enough profit to be financially viable long term, they or lose the team member anyway. The culture is to always want a higher split.
Get clarity on your business model – it has to be a win/win/win situation. A win for the team member, a win for the business, and a win for the business owner (meaning either more work/life balance or return on investment for their time.) As I mentioned, you need to know your costs, and the benefits the people on your team enjoy. Why is it better for them to be on your team vs. being on their own?
If you look at the average expense ratio of agents on their own, they spend almost 50% in marketing, website, client retention, etc. Too many team leaders try to compete with splits of brokerage vs. net income to them and their agents.
Over the years, I’ve had several people that were losing money on every transaction a team member made. This may be okay if the team leader is doing the bulk of the business, but in the long term this is not sustainable for the team leader – or to build a saleable business.
A successful business requires that systems are in place to keep things running smoothing and to ensure that the consumer experience is quantifiable and consistent. This includes getting a buy-in from the team and instructing every team member on the best way to deliver a reliable customer experience.
For example: a buyer calls about a property listing. It is assigned to a team member, who shows the property to the buyer, successfully negotiates the offer, and closes. The buyer has no other interaction with the business or team leader. The business, therefore, has no relationship with the buyer – only the agent. There needs to be a system in place that nurtures the relationship between the business and the buyer. Either a customer service agent or the team leader should be responsible for reaching out.
In this instance, the leader makes the mistake of abdicating instead of delegating. They build a business and advertise services to attract more customers, but then they fail to communicate with the customer personally. Let’s not forget that every customer should be able to generate around 5 transactions in their lifetime – yes five – by repeat or referral. That can only happen if the business continues to have a relationship with the customer. (And mailing them a newsletter doesn’t count.
There are four steps to teaching an adult:
i. Tell them what you want them to do
ii. Show them how to do it, and then give them enough training so they can do it properly
iii. Let them do it! With most teams, there is where it ends. Over time, the team leader has no idea how the process or service is being delivered by team members.
iv. Measure the ability of the person delivering the service or process to ensure that it is being delivered in the manner the business has outlined (and that it provides the desired results).
Over time, it is common for team members to modify or adjust processes slightly for their benefit. Unchecked, they can develop very different client experiences and processes. When I managed my team, I would go out for a day with each agent approximately every six months to ensure our system or process was followed.
This was a great learning experience for everyone! Sometimes it was the catalyst we needed to develop changing systems that allowed us all to grow, and sometimes it revealed why an agent wasn’t on track with their goals. (As a side note, this was usually because they weren’t doing client follow-ups or following a trusted process.
When all team members “walk the walk” and are held accountable, they’ll see the value of being on the team. They will understand the value of being in a team environment. I always tell coaching clients that they need to recruit the people on their team as diligently as they recruit the people they’re trying to attract to their team. The people on your team need to know the value, the vision, the numbers and the benefit of systems. By creating a win/win/win relationship, team members, the leader, and the business will thrive.
Bill Renaud
Real Estate Business Coach
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Great summary of the power you bring to your coaching program Bill! How many times have I heard these principles during our calls! Thank you for your experience and clarity.