M. Nack’s Blog

Well, here I am proclaiming the difference between good and bad salespeople and look at me. I completely fell down on the most basic aspect of the job last week: returning a phone call. I can’t even begin to enumerate the number of times I have gotten on a tirade about “It must be nice to have so much business that you can afford to just throw it away! Just THROW it in the garbage!”

I am reminded of an exercise I did once in a sales training class.  Given the amount of the average real estate commission, the value of a lead in real estate can be sizable. If you know your average commission, you can calculate how many transactions you need to achieve a particular income goal. For example, if your average commission is $5,000, it would take 20 transactions to earn $100k. This particular trainer wanted us to figure out how many leads it takes to generate “x” number of transactions. If it takes 10 leads to generate one sale and 20 sales to make $100k, 200 leads should achieve your goal of $100k. Each lead, then, is worth $500.

Once we had all these numbers worked out, he had each one of us take a dollar bill out of our pocket and tear it up. (I guess once the gov’t found out about it, he had to stop. Apparently, it’s a federal crime to willfully destroy U.S. currency. Who knew?) It’s amazing how difficult it can be to actually tear up a dollar bill. If you don’t believe me, try it! The moral, of course, is that each time we blow off a lead, we’re not tearing up $1, we’re actually throwing away $500!! “Mea culpa, mea culpa, mea maxima culpa. Forgive me, father, for I have sinned.”

“All Things With Exuberance!”

mary!

A key point taught in Salesmanship 101 (OK, maybe it’s in 102) is that people buy with emotion and justify with logic. So, the saleman’s trick is to find out what the customer’s emotional needs and wants are and then provide it - or, more correctly, articulate how the product they are selling provides it. The reason salespeople have such a bad “rep” in our society is because bad salespeople make themselves so pesky, you “buy” their product just to get rid of them. Unforunately, the minute they walk out the door, chances are excellent you are on the phone cancelling the order. They will certainly never get your repeat or referral business. As long as they continue bullying people into “buying”, they will continue having to look for new “victims”.

The BEST salespeople, in fact, don’t actually “sell”, at least not the way most people think of selling - pitching your product with such force and persuasion that the customer can’t help but be ”sold”. The truth is people LOVE to buy and HATE to be “sold”. What the best salespeople truly understand - and why they love it so - is that “salesmanship” is actually relationship. Relationship takes time to develop and nurture. Relationship means that the salesperson actually LISTENS to the customer and cares enough to provide a real solution. Only the very best salesperson will understand that occasionally their product doesn’t solve the customer’s need - and will candidly admit it.

Done right, sales is truly a noble profession that is not only financially lucrative, but, more importantly, emotionally rewarding. As I used to tell my salespeople, sales is a great career:  we get paid - and paid well! - to become people’s friends. And what could be better than that?

“All Things With Exuberance!”

mary!

I attended an event that was held by the Chicago Association of Realtors Friday evening. They had 3 prominent economists discuss their take on the market in general and on real estate in particular. The first speaker agreed that real estate had been soft in 2006 but that the market as a whole is doing very well. The first thing bolstering our markets is Global Liquidity. China and Asia are seeing run away growth - and need to put their money somewhere. That “somewhere” is in our markets - both the bond markets and the stock markets. She sees no end in sight of that trend. In addition, corporate balance sheets are extremely strong with 18 quarters in a row of double digit earnings growth. So, American business is in great shape. She expects continued investment in capital expenditures. So - even though housing is down, the economy on a whole is quite robust.

The second speaker was the head economist for the National Association of Realtors. He was in town visiting from D.C. Even though the real estate market declined nationally in 2006, it was STILL higher than 3 years ago when it was considered to be healthy. Interestingly, the markets that have seen the biggest declines are Florida and California. The good old conservative Midwest that didn’t see the run-ups has also not seen the down turns. Appreciation in Chicago, in fact, remained at 1% - meaning our market is holding steady. This speaker also saw signs of the housing market bottoming out and starting to turn up again. My experience concurs: since New Year’s, buyers are coming back into the marketplace and are seriously looking.

The final speaker addressed the downtown Chicago market - which has been and continues to be hotter than a firecracker ever since Millenium Park opened. Developers coming on with pro-formas of $500/sq ft are, in fact, selling at over $600/sq. ft. And are being sold out in weeks. Probably a factor of the robust economy the first speaker addressed. I am often asked: “where do people get the money?” Believe me - it’s out there!

“All things with Exuberance”

mary!

It has been awhile since I’ve visited these pages. There is a phrase: “to return to a familiar place to discover the ways in which you yourself have changed.” These past 6 months have been interesting - in the same way that, when asking the attributes of a blind date that has just been arranged, the reply is, “They have a good personality.” At the end of it all, I am happy and grateful for where I have landed - no longer in charge of running and operating a real estate office. To be sure, it has been a huge learning experience - and I don’t regret it for an instant. However, I am so glad to have that “out of my system” (at least for the time being). Now I am able to focus on the things I love doing most: working with clients, building relationships and making deals happen.

What has been most interesting is how many previous small business owners have since admitted to me that they are much happier being rid of their businesses! Our culture creates this myth that owning your own business is the ultimate scenario. This seems to be the best-kept secret in America: most small business owners work harder only to make less. The book The E-Myth by Michael Gerber says ”just because you love to bake does NOT mean you should open a bakery.”

Owning a business is about the business of running a business - and the actual product doesn’t really matter that much. The problem does not lie with owning and running a business. For those willing and able, the myth is true. Owning a business can be a terrific way to become financially independent. I am probably stating the painfully obvious: being a good craftsman has little to do with being a happy business owner. For a great read on this subject, I cannot do better than to recommend my friend Barry Moltz’s fine book You Need To Be A Little Crazy. (www.barrymoltz.com )

“All Things With Exuberance!”

mary!