As salespeople, we operate in a game of odds and probabilities. Being deliberate in knowing the odds and improving them is what a Champion does. We must be able to balance the odds of the marketplace, the odds of the prospect, the odds of creating a delighted client, the odds of expending our resources, the odds of a higher return, and the odds of our time. All of these odds have to be evaluated and factored into our decisions.
Casinos earn large returns for the owners. The reason is they play the odds in their favor ... always. They don’t do it sometimes; they do it always. There is not a game in any casino in the world where the odds are against the house ... not one game! Some games, like blackjack, are more favorable with a higher probability of winning than roulette. The odds are still less than 50/50 for the player, though. The casinos know that, if you sit there long enough and frequently enough, even if you win in the short run, you won’t win in the long run. It is certainly better when you are the house. How do we become the house in the business of real estate? The first step is to understand the aforementioned odds by tracking and analyzing the odds of the marketplace, the odds of your skills, and the odds of the prospect.
Champion Rule: Wants and needs don’t change the odds.
Too often, we believe that if we want or need something, that fact will swing the odds in our favor. I would have loved to play professional basketball. I really wanted to be a power forward, like Maurice Lucas, Karl Malone, or Buck Williams. At 5’11” when I graduated high school, the odds were heavily against me. Even after I grew another four inches before I started college, the odds were extremely long. How many 6’3” power forwards have there been in the last thirty years in the NBA? NONE!
If a seller says to you, “You don’t understand my problem. I really need to net $100,000 from the sale of my home, so we need to list the home for $350,000 to net that amount,” and you know that the house needs to be at $299,000 to get a buyer for the property, does the seller’s need to net $100,000 change the value and sales price of the home? What are the odds of finding a buyer who is willing to pay this seller a $50,000 premium for their home because they are nice and the seller really needs it? ZERO!
We, as salespeople and entrepreneurial business owners, must play the odds. The better application of odds leads to better income, results, and time off with our families. When we are, in effect, playing the odds, we can still make a lot of money, but it will cost us more time than is necessary. When I see agents working six or seven days a week, it tells me they are ineffective at evaluating and playing the odds. It tells me that there is a lot of wasted time and emotion in their business model. This correlates to lower than necessary hourly rates for what they do based on their skill, lead volume, market presence, and experience.
One of my key objectives, when I work with anyone in a coaching and consulting capacity, is to double their hourly rate in the first few months of working with them. Your hourly rate directly connects to how well you are doing and will be doing in a sales business. It also demonstrates the odds of your business and how well you play those odds. Your value per hour is a critical computation and number of success. I describe it as one of the six key numbers in a real estate agent’s practice. The hourly rate is like when your doctor takes your pulse. It is the pulse rate of your business.
To calculate your hourly rate, take your gross commission income for the last twelve months and write it in the blank provided below. Your gross commission income is what you make before expenses or company split. You created the gross revenue, so use that number. Your split is really a cost of sale, not a cost of your time value. Then take the number of hours you work in a day, on average, and write that in the space provided. Then estimate the days you work per week and weeks you work per year. Multiply all of those work hours, days, and weeks together to get the total hours worked. Then divide your total hours worked by the gross commission income.
The goal is to double the number you just wrote down in the next six months. If you double your hourly rate, you have dramatically more options in life. You can work the same number of hours and make twice as much money as you normally would, or you can cut your hours in half and make the same as you were making before. Most agents choose neither of these options. They usually choose a combination of more income and better quality of life. The best news is, you can choose now, where before you had no choice. Champion Agents continually raise their hourly rate through improvement of their skills, knowledge, attitude, activities, and the odds of the business.
Champion Rule: Consis-tent commitment of effort and consistent commitment of resources will change the odds.
A true Champion Agent is an agent of consistency. They consistently do the activities that generate high profit margin revenue for their company. They consistently prospect, do lead follow-up, and book appointments. They operate in a world of consistency. They consistently engage in self-improvement, listening to CDs, attending seminars to learn, or coaching. They consistently evaluate the financial performance of their company and their personal assets. They consistently engage in health related activities like working out and monitoring their eating habits. One of the characteristics of Champion Performers is consistency. Most people are too inconsistent to be of Champion caliber.
Let me illustrate the power of consistency. You decide to lose ten pounds, and in order to lose those ten pounds, you need to move your body sixty miles. You are now faced with a choice of odds. You could decide to go all out for three days and get it all over with by going twenty grueling miles each day to reach your goal. You could also run one mile a day for sixty days. Which of these approaches would increase the odds of your success in losing the weight? The answer is obvious to us all. The binge approach with little consistency would leave us far short of the ten pound weight loss. If we eat reasonably and exercise over the sixty days, we could achieve our goal.
The same is true in our sales business. To go out and make fifty contacts today, to binge and get it over with, rarely works. A Champion has developed the skill and discipline to invest in success producing activities like prospecting and lead follow-up daily. A Champion Agent doesn’t binge in this area . . . ever! They have learned to control their environment, schedule, access points, and emotion to engage in success producing activities every day of their working life. The consistency of activity is the key. That is true of everything in life.
Dirk Zeller is a sought out speaker, celebrated author and CEO of Real Estate Champions. His company trains more than 350,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters. The Real Estate community has embraced and praised his six best-selling books; Your First Year in Real Estate, Success as a Real Estate Agent for Dummies, The Champion Real Estate Agent, The Champion Real Estate Team, Telephone Sales for Dummies, Successful Time Management for Dummies, and over 300 articles in print. To learn more, please visit: http://www.realestatechampions.com/.