80/20 Thinking

No doubt you have heard of the “80/20 rule.” Probably even talked about it a few times without  realizing how impactful this economic principle really is if applied to day to day life and business.

First of all, a brief overview.  This is a principle that was discovered and articulated by Vilfredo Pareto (hence the other name for this – “the Pareto Principle”) in 1895. He discovered that society seemed to be divided into two distinct categories; the top 20% he called “the vital few” and the bottom 80% he referred to as “the trivial many.” He later found that it applied to much of day to day business and economics in that 20% of one’s activities produced 80% of your results or that 20% of your customers yielded 80% of your revenue and so forth.

So how can we apply this to our own day to day challenges? One simple approach is to divide your tasks into ABCDE Tasks:

A = Something you must do…serious negative consequences if you do not complete these tasks…these are the 20% that yield the 80%

B = Things that you should do…consequences somewhat negative if not completed, but more uncomfortable…not serious

C = Things that are nice to do, but typically have no consequences

D = Candidates for DELEGATION

E = ELIMINATE…Eliminate everything you can so that you can spend more time in A and B

Another way to analyze this is from the point of view of what you are worth, or, your hourly value. For example, if your time is worth $150 per hour, should you be spending it doing administrative work versus reaching out to clients, sphere of influence, following up on open house contacts?  Are you working on the vital few tasks that will result in the highest return on investment or are you working on the 80% – the Trivial Many?

Think about this next time you are organizing your day so you can be the most productive in order to accomplish your goals!

 

Canadian home sales rise in October — CREA

Ottawa, ON, November 15, 2016 – According to statistics released today by The Canadian Real Estate Association (CREA), national home sales were up on a month-over-month basis in October 2016. Highlights: National home sales rose 2.4% from September to October. Actual (not seasonally adjusted) activity was up 2.0% year-over-year (y-o-y) in October 2016. The number…

via Canadian home sales rise in October — CREA

Interviewing your customers

If you have ever had the opportunity to watch James Lipton interview famous actors on his show Inside The Actors Studio, you will no doubt recall the stack of recipe cards with his well known list of questions.  What you may not be aware of is that these questions originated from a French series called Bouillon de Culture which was hosted by Bernard Pivot.

Thinking back to a number of these episodes, it is striking how well we get to know the guest being interviewed by the time the final question is asked.  And this is the point of the exercise for the viewing public but it is no different for us as Realtors.  Especially if you want to have a loyal, fruitful (i.e. profitable) and rewarding long-term relationship with your client.  I have referred to F.O.R.D. (Family, Occupation, Recreation, Dreams) questions in the past which is the same strategy.  I thought it would be an interesting exercise for you to go through the ten Pivot/Lipton questions, answer them yourself, but think about them next time you engage with a client and see how many you can get answers to.  Here they are:

  1. What is your favorite word?
  2. What is your least favorite word?
  3. What is your favorite drug?
  4. What sound or noise do you love?
  5. What sound or noise do you hate?
  6. What is your favorite curse word?
  7. Who would you like to see on a new banknote?
  8. What profession other than your own would you not like to attempt?
  9. If you were reincarnated as some other plant or animal, what would it be?
  10. If Heaven exists, what would you like to hear God say when you arrive at the Pearly Gates?

Think about some of these questions along with the F.O.R.D. ones and remember to take notes.  You will end up with a much better understanding of your clients.

The Year-End Checklist

As we approach the end of another record-breaking year for The Toronto Real Estate Board as supported by the table of sales figures below, it is timely to consider your year-end business assessment checklist.

treb-2016

Aside from a review of your sales figures, whether it is based on gross commission income, number of buyer/seller transactions or even source of your transactions, these are some of the other items to consider as well.

  1. How do you currently track your clients, appointments and contact details?(CRM, Excel, Outlook, in your head. Provide as much detail as possible.)
  1. How do you currently track your deals, production, efficiency, profit/loss, and expenses? (QuickBooks, Broker does this, Excel, Accountant)
  2. What do you believe has been your greatest challenge in business thus far?
  3. Do you have an assistant? [ ] yes [ ] no Name(s)
  4. Do you work with a buyer agent(s)?
  1. TELL US ABOUT YOUR CURRENT MARKETING ACTIVITIES

RATE your tools and activities on a scale of 1 to 10 in terms of effectiveness. 0 being not implemented, 1 being not effective at all, and 10 being extremely effective

Seller Package

Buyer Consultation Package

Database Marketing (CRM)

Client Newsletters

E-Newsletters

Laptop Listing/Buyer Presentation

Advertising, Magazines, Newspaper

Just Listed/Just Sold

Video Bio

Video Open Houses | YouTube

Farming, Direct Mail

Dialogues and Presentations

Websites, SEO, PPC

Facebook, Twitter, Linked In

Free Sites (Kijiji, Craig’s List)

These are a few of the topics you should review at year-end to ensure that your business plan for the next following year addresses any weaknesses or capitalizes on some of the strengths as you move forward.

Your Road-Map

I started thinking about this after looking at some current Broker/Salesperson production statistics from The Toronto Real Estate Board (“TREB”).  Total membership for TREB is almost 47,000.  Almost 32% (i.e. 15,000) do not do any transactions!  Over 58% of TREB members do 2 transactions or less.  At the other end of the spectrum, 13% do between 6 – 10 transactions, just over 5% do 11 – 15 transactions and 2.29% conduct 16 – 20 transactions. 2.84% do 20 transactions or more.

If you use the TREB average price of $762,000 and a 2.5% commission rate (for a buyer sales person), it is not hard to understand that a huge portion of the TREB Realtors are not making a real career out of this; at least not one that will pay off especially after paying their fees, expenses and taxes.

All this to arrive at the topic or question for this week’s post; what is The Road-Map to a successful real estate career?  Having been privileged enough to work with a lot of new Realtors and witnessed some great successes, I have gradually come to realize some very real truths about getting in to this career.  First and foremost, be prepared to get knocked down, a lot!  Whether these turn out to be “TKO’s (technical knock-out’s)” or you get back up, that is the real test.  Perseverance.

Second, have a self-improvement plan (for life) that includes regular reviews, whether by yourself or preferably with a mentor/coach.

Third, put the time in right up front to become an “expert!”  One of the best activities I learned early on during a training session in Atlanta with Coldwell Banker Commercial (known today as CBRE) was to become an area specialist.  This involved learning absolutely everything about a geographical area and commercial real estate specialty, in my case office leasing, so that you were the source for any real estate information.  Interestingly, Larry Kendall of Ninja Selling and The Group Inc. fame promotes this same approach.  “Be the source for real estate” for your clients, community, and anyone looking for solid real estate advice.

Devote the time and energy early on to these areas and a career in real estate will be that much more fruitful

What would you do if you weren’t afraid?

The best sales people, coaches, managers, leaders, ask lots of great questions. The question above is an excellent one to ask oneself when you find yourself holding back on taking action.  Add anything to the end of the sentence and then explore further.

For example, “what would you do if you weren’t afraid of the outcome?“, or “success”, or a “yes” answer.  As in, “yes, we would like to go ahead with an offer to purchase.”

Originally, the title of this blog post was going to be “What’s my purpose?”, but in doing some research, it became obvious that without asking some of the really important questions it would be near impossible to come up with a satisfactory answer.

Another great question by Molly Gordon of shaboomInc.com is “What if failure is not a deal-breaker?”  Think of the perspective of this question and what it does to your mindset.

Recently during a team vision building exercise I was facilitating, the question of “why are we here, or rather, why do we exist?” was put to the test.  This is one of the key foundational questions from Patrick Lenzioni’s excelent book The Advantage.  Ultimately, it is not to make a profit, more sales, get awards, be # 1, but rather as Lenzioni says, “to make people’s lives better!”

This is when sales people, business leaders, and others, really start connecting to their clients, customers and co-workers.

For more great insight into the power of great questions check out www.boxofcrayons.biz