By Bob Scullin, CEO, SIOR

There is a tendency among all brokers to forget the importance of relationships with clients when times are bad. In the scramble to make money, brokers incline to abandon nurturing relationships and go chasing deals like pigeons pecking at seeds on the pavement. There seems to be no end to the activity, and no reward for the effort. 

Why is it that some brokers are successful in the worst of times while other brokers fail in the best of times? Since they both share the same market circumstances, it must be that market circumstances have nothing to do with success. But what is it that distinguishes the successful broker from the unsuccessful broker?

Since the successful broker does well regardless of peaks and valleys in the economy he must do something which is constant regardless of economic situations. That constant is more than networking, it is forming quality relationships with clients called promoters who value the broker as a professional and refer to him their closest friends and colleagues. But how do brokers develop promoters on which to base their referral business?

Let me give you an example. Tim Foutz is a friend of mine. Tim started in the commercial real estate business in 1971 and over the past 40 years has distinguished himself as one of the best industrial real estate brokers in Southern California. What did he do to become such a pre-eminently successful broker? I have been interviewing Tim regularly over the past couple of years in an effort to answer that question.

Tim regards success as a fine balance between art and science, and he says that if art is the answer to the question “what” is being done, then science is the answer to the question “how” to get it done. “What” successful brokers are doing is forming relationships and developing clients into promoters over time.

The art of successful brokerage is more difficult than the science, which may explain why only 20% of brokers are successful. We will have more to say about the science of brokerage in next week’s blog, but for now let’s agree that the art of successful brokerage is predicated on forming relationships.

Tim says that it is essential that a broker have a business plan in place before the beginning of each calendar year; discuss the plan monthly with a reliable sounding board; review the plan quarterly with a mentor; and commit to implement the plan regardless of immediate results. A year without a business plan will surely never go as planned. Success would only be an accident and would not easily be replicated.

Like Michelangelo, Tim is a paragon of persistence. Once he writes his business plan he sticks to it without deviation. He often quotes his favorite saying, “People don’t care how much you know until they know how much you care.” By implementing his business plan and communicating his level of care for his clients, Tim converts them into promoters, which has been the backbone of his success for four decades. That is what successful brokers do to be successful.

How do successful brokers measure their success? We previously discussed that a broker’s Net Promoter Score (NPS) is a reflection of loyalty on the part of a broker’s clients. Without a high NPS, detractors outnumber promoters and the opportunity for referral business is either eliminated or greatly reduced. This does not bode well for eventual success.

This is the secret that Tim Foutz discovered when he encountered the fork in the road and chose the road less traveled. His clients hold him in the highest regard and readily refer their friends and colleagues to Tim, knowing that they will receive individualized attention with high professional standards evidenced by his record of success. Tim has a very high NPS.

If the art of successful brokerage is simply to create promoters, why are only 20% of brokers successful? Is it because creating promoters is not really so simple? Next week we are going to suggest a specific plan to create promoters as part of an effective business plan.