Relationship Brokerage: What Successful Brokers Knew
By Bob Scullin, CEO, SIOR
This is Part Three of a series of blog entries about Relationship Brokerage.
The constant conversion of low-level contacts to high-level relationships is the objective of the successful broker. Successful brokers knew this and built their careers on what we will call Relationship Brokerage.
We are all in business to make money. Nonetheless, commercial real estate brokers make money consistently only after identifying a territory, converting a database into contacts, converting contacts into clients, and finally converting contacts and clients into promoters. What is constant between each conversion is the fact that it involves an ongoing deepening of relationship.
Relationship is therefore the key to long-term success in commercial brokerage. While it is possible to score a one-off deal every now and again, that does not constitute long-term success, or serve as the basis for a productive, successful and rewarding career. The best brokers are the brokers who have focused on deepening personal relationships and providing an exceptional level of professional service.
The Top Twenty Percent
Let’s acknowledge what “they” say about any sales organization: 20% of salespersons generate a disproportionate 80% of the business (Pareto’s Principle). That means that 80% of salespersons are contributing only a minor amount to the company’s gross revenues, and in many instances are taking up space which would better be allocated to more productive salespersons.
All managers set out to assist the struggling 80% of brokers who are less productive. We want to help them to become more productive and eventually successful. That is a major challenge if it is inconsistent with what conventional wisdom says about sales organizations and other companies. But is it a dream or a vision?
A dream is not likely to come true any time soon, but a vision is a realistic possibility if certain benchmarks are met and concepts are implemented in the real world. I prefer to label my dream a vision, which is able to become reality with hard work by management and commitment by brokers on an individual basis.
Whether brokers have been successful in the past, yet wonder where their future is headed; or whether success in the past has eluded them and they are wondering whether they have chosen the right profession, all brokers share the same challenge.
Searching for a needle in the haystack is a waste of time. Cold calling is searching for a needle in the haystack.
Since enlightened brokers no longer employ cold calling because they have replaced cold calls with warm calls, there is a basic appreciation that relationship is the key to success in the brokerage business. Without personal relationships there is only serendipity in discovering random opportunities which involve good luck or great timing.
I have nothing negative to say about either good luck or great timing. They are important components of every person’s life, maybe even especially one’s business life. I would rather be lucky than unlucky, and I appreciate good timing over bad timing. But they do not constitute the basis of a successful career in commercial brokerage. To rely on good luck or great timing is not a prudent plan for paying one’s mortgage or a child’s college tuition costs.
Once a broker realizes that good luck and great timing cannot be the basis for professional success, there is no alternative but to realize that relationship is the key to success and the foundation of a well-conceived business plan.
It seems therefore obvious that fostering personal relationships is the basis for planning to succeed. Since relationship is the key element for success, a broker has to plan to establish solid and reliable personal relationships to succeed. The only way to establish personal relationships is to identify persons with whom the broker will relate. The persons with whom they will relate have to be somewhere… and they are in the broker’s territory.
In the final analysis real estate brokers are salespersons. We instinctively know that there are differences between selling a shirt at Macy’s, a television at Best Buy and a warehouse in an industrial area. Selling the shirt or the television does not require a relationship with the buyer, but selling a factory requires an intense level of personal relationship with the buyer. (Read Spin Selling by Neil Rackham.)
Brokers are not door-to-door salesmen making cold calls. They are service providers, building value on a long-term basis which requires the building of personal relationships with potential clients. What the door-to-door salesman accomplishes in a cold call is a one-off event. What brokers provide are relationships which eventually result in real estate transactions. Therefore each time a broker encounters a potential client there should be an enhancement of an ever-deepening personal relationship.
Rather than a cold call, each encounter with a potential personal client is a warming of a relationship which takes place over time. And after each warming call the potential relationship is deepened just a little, the potential client becomes a real client, and eventually the client becomes a promoter who refers business to the broker.
Every time a broker meets with a contact he should be seeking to establish and deepen a personal relationship, rather than making a cold call. It is the warming of that relationship with contacts over time that creates a value which serves to separate relationship brokers from their competitors. Without the warming of personal relationships over time, brokers remain a commodity and are easily replaced by the last broker in the door. It is for this reason that why a broker does what he does is more important than what a broker does.
The process of warm calling never ends because personal relationships are constantly being created, refreshed and renewed. Cold calling implies that a broker is meeting the contact for the first time, then moving on to the next contact, as if searching for the needle in a haystack. The dynamic between the broker and the contact is part of a relationship that requires constant tending and care. That is why we refer to each meeting between a broker and his personal contacts as warm calls.
|Print article||This entry was posted by NAI Capital on May 25, 2011 at 9:00 am, and is filed under Bob Scullin, SIOR, CEO. Follow any responses to this post through RSS 2.0. Both comments and pings are currently closed.|
Comments are closed.