Musing About Help-U-Sell, The Franchisor
I’ve been rather silent for a few weeks and I apologize for that. I have some BIG deadlines looming and that’s pretty much occupied me. I have had lots of time for musing, though, and here’s what’s been on my mind:
The Help-U-Sell Consumer Offer and Operating System are amazing. During our last growth spurt (2004-2006, when the real estate bubble was beefing up), almost anyone could do very well as a Help-U-Sell franchisee. It seemed all you needed to do was buy a franchise, announce that you were open in the local market . . . and Sellers would knock each other down to get in the door! Ordinary Brokers sneer: ‘Sure you were doing lots of business because you were giving away the store! You couldn’t have been making any money!’ Not so. We did WAY MORE than our share of business and we were wildly profitable because, in addition to a better deal for the Seller, we had a completely different Operating System, one that didn’t squander resources chasing after non-productive agents.
The ‘anyone can be successful’ principal blew up on us as 2007 dawned. Turned out a lot of those ‘anyones’ didn’t have the skill, the desire or the HEART to continue when the market turned. They came to us when it was easy; as soon as the market became difficult and you had to WORK to make it, they left. Today we don’t have any Brokers in passive, wait for the business to come in the door mode. Our guys have gotten very good at grabbing the business by the shoulders and shaking it until something happens. Bravo.
Infinium, who owns Help-U-Sell Real Estate, has been an incredible parent. They have done everything they possibly could to ensure our offices survived and thrived. When the business shrank to a trickle and people had to choose whether to pay their Royalties or their electric bills, they agreed to put the Royalties on non-interest bearing notes, to be paid by adding additional dollars to future Royalties. In other words: if you didn’t close anything, you didn’t have a note to pay. You only paid when you had income. Go ahead, ask Coldwell Banker or Century 21 if they’ll do that for you.
In addition, Infinium temporarily reduced Royalties from the 6% specified in the Franchise Agreement to 5%. That temporary reduction is still in effect today and I have no information about when it may go away.
They also suspended the National Ad Fund contribution. Not only was this easier on our offices in a down economy, it was also done in recognition of a truth: Help-U-Sell has always been about establishing the brand LOCALLY. It’s a target marketing business model, rooted in the idea that you carve out a piece of local geography, market to it and garner big market share there.
Meanwhile, other franchised real estate offices were usually paying a 6% Royalty (7% in some cases) and a 2% National Advertising Fund contribution on every sale. 8% . . . that’s 3% more than our guys were paying during the toughest market in history. *
Hey, as long as we’re just musing, let me come out of the closet with a secret. I know this is true for one Franchisor; others may have similar programs. What agents in successful (NAME OF THAT OTHER FRANCHISE DELETED, But use your imagination) real estate offices don’t realize is that their office is not really paying 8% out of every transaction to the Franchisor. That Franchise has a program for reducing Royalties and NAF contributions for very productive offices. So when the agent brings, say, $5,000 into the office, the office usually deducts the full 8% for Royalties and NAF (@$400) and splits the balance with the agent . . . But the office turns around and only pays the franchisor, say, a total of 5% (@$250). In this made-up example, the office would pocket the additional $150 and the agent has no idea . . .
I guess that’s snippy of me. I apologize. But I’m trying to make a point here: as Franchisors go, Infinium and Help-U-Sell have been pretty benign. In fact they’ve been more than nurturing. Rather than creating a secret profit center for good offices (at the expense of their agents), Infinium chose to suspend NAF all together and cut Royalties for everyone. Having worked for other Franchisors in the past I can see this as a matter of attitude. The other guys always seemed very clear that they weren’t in the real estate business at all, they were in the franchising business. Real estate simply provided the revenue stream from which they derived their income. Their business model was all about selling more franchises and getting more agents to affiliate with the company (agents whose average productivity has declined every year for the last 15).
The Infinium/Help-U-Sell Franchisor attitude is very different. We are in the real estate business. All of us. Our Franchisees are partners. We all live and die by how effectively we serve Sellers and Buyers in local markets across the country. There are no Vice Presidents running around the halls of Help-U-Sell Corporate who came from rich careers in, say, Hotel or Car Rental Franchising . We are real estate people. We think like Brokers and before we pull the trigger on any idea, we talk to our Brokers . . . because they are a little closer to the consumers we all serve than anyone in the Corporate Tower.
*Our competitors might say the suspension of the National Ad Fund was a stupid thing for Help-U-Sell to do, that it made us less visible to consumers at a time when visibility was essential. We decided that being visible in, say, the State of Montana, where we have no offices to serve any consumer who stumbles across our marketing really would be stupid. . . especially if we used monies from our offices in , say, Pennsylvania, to do it. So we suspended the Ad Fund which in theory gave our offices more dollars to spend locally establishing the brand in a way that would benefit them. I think it’s also important to look at how the other guys spend their Ad Fund dollars. If you look at their marketing and where it is placed, it’s clear the objective is not to help their offices sell more real estate, but to help the Franchisor sell more franchises. This is sold to the offices as marketing that will help them recruit more agents . . . . and that’s a whole ‘nother topic.
On Hiring
I just got off a Training Magazine webinar on ‘Engagement.’ That’s the mysterious factor that comes into play in almost every human interaction from Facebook to the Church Social. In this case the experts were talking specifically about Employee Engagement: keeping the members of your team energized and involved in the success of your business.
Much of the discussion centered on hiring, and I think that was appropriate. Your best bet at building a good team is to hire the right people. But who are they?
If you are an ordinary real estate broker (wink, wink, nudge, nudge), you probably have lots of scripts memorized about the kind of person who can be successful in the business. In reality, though, you long ago gave up the notion that you could tell who would make it and who wouldn’t. You hired too many hot shots who failed miserably and probably a few plodders who plodded on to do big business. The ordinary broker would never say it out loud, but the philosophy of hiring is basically this:
Hire anyone who can fog a mirror. Give them a little training – hopefully the kind that requires little investment of time or energy on the broker’s part – and give them six months.
On paper, the ordinary broker would compare the new person’s performance against a standard at six months and decide then whether they could stay or go. In practice however, the ordinary broker is too busy hiring more and more agents to have time for this weeding out process . . . and that’s why the average real estate agent in the US does what? about 7 deals a year.
At Help-U-Sell we have a different problem. We have difficulty attracting agents who are used to being paid 75% commission splits on the 7 deals they do a year to our program where they’ll probably do 15 or 20 deals and be paid 50 or 55%! Somehow that ordinary agent believes that the size of the commission split establishes his or her value as an agent – NOT the number of buyers and sellers he or she helps. What can I say? It’s a crazy universe!
One of the revelations I had in today’s meeting is that, in hiring, skill sets are important . . . but if they are present, the MORE important thing is Cultural Fit: Will this person be able to embrace our culture, our mission, and get onboard with enthusiasm and passion?
Here’s where we (Help-U-Sell) have an edge. The skill set for Real Estate Sales is pretty fluffy. You have to be able to talk to people and to present yourself as a professional. You have to be able to learn and remember lots of semi-technical, semi-legal information. You have to be organized and able to manage a lot of detail – or be willing and able to hire someone to do this for you. It helps to not be afraid of computers or technology in general. You have to be able to persevere in the face of setbacks and defeats. I could go on but you get this picture: this is all pretty soft stuff. I mean: it’s not like ‘you must be able to program in C+.’
So, with this soft skill set, LOTs of people might be successful in Real Estate. What becomes more important is their ability to fit within the company culture . . . which assumes your company has one (a culture). But most real estate companies don’t. Really: What’s the culture of most real estate companies? They all do the same thing in the same way with the same tools . . . . what’s the difference? There is none.
But there is a difference at Help-U-Sell. Our people – and by that I mean everyone: brokers, agents, admins, processors, corporate employees, everyone – is on fire for the mission. We’re not just selling real estate, we’re changing the way real estate is sold. We’re changing the world for the better, not just perpetuating a bad idea that’s been around for decades. This passion for the Crusade is one of the many things that differentiate us from every other real estate organization. And THAT’s what we should be looking for when we hire: people who have the ability to get excited and passionate about doing real estate in a better way. If we can find them, the rest is easy. After all, most of those soft skills can be developed.
Picture this: a help wanted ad for a Help-U-Sell office:
Needed: 2 agents who want to change the world.
We are overrun with buyer leads and seek dedicated
individuals to take extraordinary care of them. If you
want to be busier than you have ever been in your
career, if you want to delight consumers by giving them
outstanding service AND a better deal, call today:
123-456-7890
Engagement, the ability to become involved and passionate about the company mission, is essential to today’s best companies. Near the end of today’s meeting, one of the presenters shared Zappos policy on new hires. They do the standard interviewing/screening process, looking for skill sets and cultural fit. Candidates who make it through are put into a three week training program about the company, the work, the culture and the mission. At the end of the three weeks, each one of them is offered $3,000 to quit.
Stop. Let that sink in a minute.
What Zappos is saying is they acknowledge they can’t always tell who will fit with the company and who won’t. But they’d rather pay their bad hiring decisions to go away rather than invest time, money, effort and productivity in trying to rehabilitate them after the fact. Clearly: anyone who would take the money and run . . . is no one they need on the team anyway!
So, Help-U-Sell brokers: I know you are overwhelmed. You need help, and you need it now. But don’t let your need turn desperate to the point that you make bad hiring decisions. You may have to talk to ten people to find one who can burn for you. Don’t give up after 3 or 4 and start modifying your program so that a marginal agent, already disgruntled with their current broker, will come to work for you.
Are Open Houses Dead?
I had breakfast with a broker last week. He’s a great broker, has come through Real-Ageddon with a few scars on his face but never lost his smile. His perseverance is paying off: he’s having a very good year.
Now, understand this: I am a Help-U-Sell purist. With no hesitation and absolutely no doubt, I embrace what our visionary founder created. In short: If Don Taylor Said It, I Believe It, And That Settles It. But I am becoming a vanishing breed. Most Help-U-Sell brokers have adjusted the system here and there, mostly in response to the difficult market realities of the last five years. I have no problem with that: job one is survival. But when you talk to me about your sliding scale of fees (versus your SET FEE) or the elimination of Seller Participation from your operational system . . . well, I can get very loud and long winded. As a result, many Help-U-Sell brokers won’t talk to me about what they’re really doing; they just don’t want to get the lecture again.
My breakfast broker is different: he’s made all kinds of adjustments and has no problem sharing them with me. We debate them. On tap at this meeting were Seller Participation and Open Houses.
‘I don’t do Open Houses, ‘ he said.
‘Ok,’ I answered, ‘But your sellers hold their own, don’t they?’
‘No. I tell them it’s a waste of time,’ he paused, registering the shock on my face. ‘If they insist, I’ll give them signs and they can hold their own . . . but I don’t do Open Houses.’
I was running a little short of breath. ‘Can . . you . . please share . . with me . . . why?’
‘They don’t work. Open Houses are dead,’ he said, ‘Plus, that’s old-style marketing. It’s what ‘real estate ladies‘ did in the seventies before the Internet made them irrelevant.’
‘But . . .’
‘Buyers don’t work that way anymore.’ He offered me a sip of water in hopes it would help me regain my composure. ‘Today, they’re on the Internet, looking at photos, going to virtual tours. If they see something they like, they drive by . . . and if it looks good, that’s when they call to get inside.’
‘Really?’ I was picturing a pristine and deserted beach and silently chanting ‘oommm‘ to myself in hopes of getting my pulse to slow.
‘Nobody has time to drive all over town, dropping in on random Open Houses. That’s just not the way to get a property sold today.’
When I got back to my office, I did a little Googling. I discovered that he is not alone in his thinking. Many agree that the Open House is a vestige left over from a time that has long passed. But not everyone believes this. I tossed the question out to our Brokers on our regular Wednesday Power Hour Webinar. Most were absolutely on-board with Open Houses and mostly with Seller Participation. As I listened to them I began to realize where the discord was coming from.
It all has to do with being clear about what you want to accomplish.
If your goal is to sell the house that’s being held open . . . well, that’s a rare occurrence at best. Maybe Open Houses as a strategy for accomplishing that . . . are dead.
But a couple of Help-U-Sell Brokers said the principal benefit of Open Houses (held by them) is the opportunity they provide to present their program to potential Sellers – the neighbors, the casual drop-bys. People are surprised to find a Help-U-Sell Broker sitting on an Open House and say something like, ‘Gosh, I didn’t think you guys did Open Houses.’ And that opens a whole dialogue about who we are and what we do.
Others talked about the benefit of having dozens of additional directional and Open House signs up in the neighborhood. The added visibility boosts inquiries from both buyers and sellers.
And finally, there were those who talked about how Seller-held Open Houses create additional opportunities for lead capture, opportunities that don’t involve the Broker’s time. Going back to Don Taylor: A well-coached Seller, holding his or her own Open House, always gets contact information on anyone coming through. On Monday morning, that list is faxed to the office for followup. Most times, the visitor has eliminated the subject property . . . but is open to hearing about others (bingo!); and sometimes, with a little clarification, they are ready to make an offer on the subject property (bingo again!). A Help-U-Sell broker who has done a good job of selling Seller Participation may walk into the office on Monday morning to find 3 or 4 or more sign-in sheets in the FAX machine, and suddenly there are half a dozen more buyer leads.
So, here is the message:
As with every piece of marketing you do, the first order of business is to define exactly what it is you want to accomplish. Then track results in terms of what you said you were after and evaluate the program based on that criteria. Simple.
What might you want to accomplish with an Open House? Pick one or two, not all five:
- Sell the subject property
- Make contact with buyer prospects who probably won’t make an offer of the subject property but who may buy something else through you
- Create an opportunity to spread your message to potential sellers in the area
- Boost your visibility in the marketplace through increased signage (directional and Open House signs)
- And in the case of Seller held Open Houses, multiply your efforts, getting more done than you can do yourself
My breakfast broker decided the only thing he might want to accomplish with an Open House was to sell the subject property. That’s an iffy proposition at best, so no wonder he thinks Open Houses are dead. As a marketing tool, however, Open Houses do hold all kinds of other possibilites.
By the way: there is acutally a sixth reason to hold an Open House and I left it off the list because Help-U-Sell Brokers generally don’t do it. It is often the only reason an ordinary REALTOR holds an open house:
To create a false impression of activity thus pacifying an anxious seller for another month.
Pay-Per-Click, Step-By-Step
We all know that carefully planned pay-per-click advertising works. It can effectively drive traffic to your website, where, if it is handled properly, it can turn into leads. We saw an example of that this morning on the Tech Time Tuesday Webinar, where Jack Bailey increased traffic to his office website by almost 1,000% over a four month period. ,due largely to his pay-per-click campaign on Google. Using Ad Words, he brought roughly 15,000 visitors to his website. One of his ads – the one offering a free market analysis – had a 31% click-thru rate! That’s crazy good! And, assuming some of the traffic is converted to leads, some of which actually buy or sell real estate, the cost can be very low. Really, Jack’s budget was $12 a day – a little less than $400 a month.
But, how do you do this? How do you proceed step-by-step to take advantage of this Internet Marketing Bonanza? Here’s how:
1. Decide what kind of lead you are seeking. Are you looking for Buyers or Sellers? What kind of Buyers? Buyers interested in Foreclosures? Buyers looking in a specific neighborhood? Buyers with little down payment money? Sellers with equity? Upside down sellers? Sellers in a specific geographic area? Step one is all about getting very specific about your target. The more specific you set your pay-per-click parameters, the more efficient your campaign will be. In short: you’ll attract fewer clicks from customers you don’t want (out of the area, just looking, unable to buy and so on).
2. Build a landing page on your office website where people who click your ad will ‘land.’ A good landing page should address exactly what the ad mentioned. If it was the offer of a free Market Analysis, that’s ALL that should be on the landing page: just the contact information capture form and a tiny bit of verbiage explaining what will happen when they sign up. Some experts say you should keep your branding, both personal and company, to a minimum on a good lead capture landing page. The idea is that people may sign up online for something they perceive to be of value if they don’t associate it with an ordinary Realtor or real estate company.
3. Decide where you are going to advertise. Google is the 800 pound gorilla here. If you choose this, your ads will appear when people who fit your demographic parameters search for the keywords and phrases around which you build your campaign. Don’t overlook Facebook. Their pay-per-click ads have been effective for many, and their targeting process is very specific. And don’t forget: not everybody searches with Google. Some use Bing, some use Yahoo. You may find more cost effective alternatives if you just look around.
4. Design your ad. Keep the verbiage to a minimum. Stick to exactly what you’re offering. Use Google AdWords to determine which real estate search terms are most common in your area and build your campaign around them. While Google pay-per-click is all words and links, Facebook allows you to include a photo or graphic in your ad. If you’re using a photo, note that. sometimes it’s the quirky photo that catches the eye. **TIP: Include your phone number in your pay-per-click ad. Some people will call rather than click, and you don’t pay if they don’t click!
5. Set-up and budget your campaign. You’ll set three ‘maximums’ when you initiate your campaign: your total budget (the maximum you want to spend for the entire campaign), your daily maximum, and the maximum you’re willing to pay per click. I mentioned Jack’s campaign: his total budget was right at $1,500. He was willing to spend up to $12 a day. I don’t know what he agreed to pay-per-click, but what usually happens is the vendor (Google or Facebook or Yahoo) will give you a range in which you should bid. Let’s assume it’s $1.10 – $1.53 per click. The higher you bid, the more frequently your ad will appear . . . until you hit one of your maximums. When I’ve done pay-per-click, I’ve set my bid on the high side of the middle of the range. By they way: some clicks will come in at less than your bid; it all depends on how competitive the environment around your key words is at that moment.
6. Track your results. Conceptually, this step is number six. But Chronologically? You probably ought to move this to first. BEFORE you do anything with any marketing, pay-per-click or otherwise, you must set up your system for tracking results. How will you capture and track the leads that come in via your Internet contact form? What about those leads that choose to pick up the phone and call? And how will you get your staff to take all of this tracking as seriously as you do? (I’ve always been a big fan of boiling in oil and/or burning at the stake for slackers, but the choice is yours).
7. Manage your campaign. Everyday, take a look at your results. How many leads did you create? What key words or phrases pulled the best? Which keywords could you pause or drop from the campaign? And so on.
Now it’s soapbox time. This is the moment when all of us need inventory. Listings are so low right now and the Listing Agent is in control. This is happening because increased buyer activity as begun to push prices slightly higher – something we haven’t’ seen in years. Homeowners are very curious right now about what their homes are worth. They’ve seen the uptick in values and are wondering if they’re still upside down. Now is the time to do a pay-per-click campaign aimed at these people. How about a pay-per-click ad that simply says: ‘Find Out What Your Home Is Worth Today’ . . . leading to the free market analysis page that’s already set up and is available on your office website.
So, let’s do it. Do steps 6, 1, and 3 – get it all organized – and then call Tony in Sarasota. He’ll be happy to help you finish the task. And if you want to run any marketing ideas by me, I’m energized and available.