Before designing a compensation program it is important to first identify who your customer truly is before you start recruiting. I believe that many Brokers do not have a defined outline of the REALTOR® they want to attract. Given the challenges of recruitment, Brokers tend to be seduced by the physiological win of a new heartbeat as opposed to being focused on acquiring the right REALTOR®. The result is often the development of compensation programs designed to attract them on price.
Often when I ask a Broker to role play and try to recruit me as an agent, I find the following fundamental challenges in their approach:
- They do not have an agenda.
- They do not ask any (or enough) questions.
- They try to tell me too much, which is overwhelming.
- They focus on price primarily.
- If they discuss value, it is not focused on what I want or how it benefits me.
Let's tackle the first observation.
The clarity and commitment to your vision and goals will ultimately pave a path to your destiny and your success. The problem is that typically they are not clearly defined.I have discovered that the typical broker was a successful REALTOR who would never consider compromising their commissions to a potential customer. They would have a strong listing presentation that would identify their points of distinction. They take time and effort in a strategic manner in order to validate their services to command the fee they feel they are worth. One of the methods is to prove that by listing their home with them, the customer would net more money in less time than their competitors. The disturbing part is that many of them did not take that skill and apply it to their brokerage business.
How Clean is the Data Upon Which You are Basing Decisions?
In order to run a profitable Real Estate Brokerage, one needs to know and truly understand the metrics involved in running one’s business.
When it comes to business planning and measuring performance, real estate brokers often focus most of their effort on developing the sales side of their businesses. Revenue growth, albeit a very important metric, is only one indicator of overall business performance. There are other key metrics that should be tracked ongoing to effectively inform business strategy and be set up for long-term success. For some, this can be an overwhelming process as they are unsure what to track and how.
In order to run a profitable Real Estate Brokerage, one needs to know and understand the metrics involved in running one’s business. One of these metrics, which we consider to be the most important metric, is the GROSS PROFIT PER REALTOR (GPPR) metric. This metric is critical to obtaining your Gross Profit per Realtor Objective (GPPRO).