The Creation Economy.

July, 2023 | Thought Provoker

We live in a new world. You must adapt, be agile, be creative, and get back to the core of what great Estate Agency is all about.

We live in unprecedented times, where a decade of low to no interest rates, fuelled by a pandemic boom, has left agents short of stock and wondering what's next.

How's the economy? It's how you make it. "You can't stop the waves, but you can learn to surf," says Jon Kabat-Zinn.

Welcome to the creation economy. Every listing and sale by any agent in your market drives a chance to be relevant. That relevancy then drives the frequency of your communication, and if you're consistent with your actions, you'll build relentless market share over time.  Here are our insights on what the best are doing to stay ahead of the conditions.

Trusted advisor status is earned, and now there's a new wave of agents bringing new thinking to the game, driving up their revenue and stealing market share.

Revenue and Activity Periods

Know the difference between revenue and activity periods. Plan your holidays 12 months in advance. Make data-driven decisions. Imagine if you graphed all your market appraisals and all the listing presentations you attended throughout the year. You'd find a low listing period in December, but a great selling period. Plenty of agents let the time of year dictate their attitude rather than putting a system in place to drive revenue. If you have a superb January, it changes everything for your momentum in February and March.

The first week of November is the turning point, where you stop listing for the current year's campaigns and turn your attention to the following year's listing stock. Data indicates that the biggest days on the internet are Boxing Day and New Year's Day. We've all got time. And in the new world, we take our phones when we go on holiday. On those phones are the apps we fall in love with to help us kill time outside of our normal routines.

Launching Boxing Day with your first open homes on January 13, 2024 allows for your first auction by the end of January or the first week of February. The same goes for April, over the Easter break in late March, with school holidays out of season with Good Friday and Easter Monday.

How do you know all of this? It's called planning. It's what you do when you get serious about the game. Right now, you're listing for Spring stock.

- Think Mid-November to Mid-December for Boxing Day launches and January sales. (You are still on holiday from December 15 - January 10).

- List in the two weeks before the Easter Break.

- List well in June/July for your late July/August launch. If you get a great run in August, you meet all the sellers for your September Launches - the big spring finish.

- Then take some time off on the first week of November so you come back refreshed and ready to hit out the final sprint, selling existing listings and listing new ones.

The skill is to identify low revenue periods, then work the 60-90 days prior as activity periods to list stock to turn your quiet periods into consistent periods of cashflow generation.

The Era of Responsibility

Max Verstappen and Lewis Hamilton are the world's best Formula 1 drivers. In every race, they measure every lap time. Is Lewis gaining? Can Max take the foot off the pedal and not risk coming off the track during wet conditions? What's the margin between first and second place? Often split seconds.

That level of responsibility is incredible. Business is the greatest sport of all. We are out on the race track for 44 weeks of the year. And the skill is to drive your market appraisals. We know, on average, it takes three quality appraisals to land one listing presentation. If you want to win five listings, you need to go on seven listing presentations, which means 21 market appraisals. That's 21 market appraisals plus the seven listing appointments, making 28 MAPs or LAPs. Divide that by 20 work days in a month; on average, 1.5 either MAPs or LAPs per day. If you do that, you win the race and land your 50 listings per annum.

When you engineer it like that, you realise the power of compound effort. Sell out your calendar. Every day you have the chance to sell three appointments per day. Buyer appointments build confidence, market appraisals allow you to connect with sellers, and listing appointments are your greatest opportunity to tell the ultimate story of what you do for the client so that you can win the listing.

If you want success, you do the hard work. Work harder, smarter and for longer. The power of effort, over time, always produces market-dominating performance.

Power of 10:10:20

Whilst many are hooked on vanity metrics and airbrushed marketing, the truth is that in every campaign there's an opportunity to build data. Think of the ten owners on either side and the 20 owners across the street.

How many of the 40 neighbours did you meet during your campaign? And more importantly, how many of your actions led to getting them there?

Think about it. We've over-marketed, automated and under-delivered. Just-listed cards rarely have the open time on them, no QR code, and are usually a mini ad for the property. Is that the purpose of the DL?

What if you were really hungry? What if you wanted to turn every listing and sale into another one? What if you had no additional funds and you just had to do the work that counts?

What if you built a rock-solid process, and you or your team followed it every time? Simple things like:

- A door knock or call on the Thursday at 4pm before launch (when parents/kids are home from school), with the goal to opt-in the homeowner to find out when the property sells and how its sale price would impact theirs.

- Followed by a reminder letter in the letterbox on Friday:

"Hi, number 10 in your street is available for sale/auction, the first open home is tomorrow at 10am, and we'd love to see you there. Scan this QR code to see it now on our website."

- Then a reminder SMS on Saturday morning:

"Quick courtesy reminder, number 10 is open this morning at 10am; we'd be thrilled to see you there".

- Then a guest list was at the open, so when the neighbour at number 14 came through, we knew it was the person we met when we did the door knock.

- Followed by a sold call when it sells:

"Hi there, number 10 sold at auction today. It made $x. We have two buyers left over; what should we do with them?"

The neighbour will say one of three things:

1. We're not selling.

2. Bring them through.

3. We're not selling, but I heard number 16 is; they have a job relocation.

It takes guts, determination and effort. But if you do it over and over, you'll dominate your market, drive up the quality of your database, and reduce your acquisition cost in getting new listings.

LTV Becomes the New Game

What's LTV? The lifetime value of a customer. Think about it.

I buy:

My first property.

My first investment property.

My first family home.

Another investment property.

A bigger family home.

Another investment property.

Then something to downsize into.

That's seven property transactions per customer. You may have met me on transaction number 2 or at number 7, and at every stage I have the power to refer.

What's stunning is our complete disregard for looking after past clients. Think of a list of every person who has bought from you this month during your entire career. Call them. Then every person who's sold with you this month, in your career; call them. We make it so hard when we lose the data and grow contemptuous of our scheduled tasks. Even worse is when our work becomes short-term only, relying on AI to tell us who to call next when the fish are right at our feet. Be good at working with people for their lifetime. It changes the whole game.

Size of the Market - Before, Core and After

Where do they come from? And where do they go? If your average sale price is $1,000,000, a buyer buys and sells a $500,000 property to purchase. That's your before market. Then when the seller sells at $1,000,000, they purchase the $1,500,000 home in the next suburb. That's your aftermarket.

Imagine if you took all of your seller's forwarding addresses and mapped them on a map. Where do they live? If there's a logical trend, then you've got a much bigger market of relationships.

In our coaching, we noticed a trend with our leading agent.

- People bought their first apartment in Bondi, moved to a smaller house in Bondi, then a bigger house in Tamarama, then a bigger house in Bronte, and then retired to their final home in Paddington in Sydney. Working up and down the price ranges, up and down the life stages, is smart work.

Be good at working with people for their lifetime. It changes the whole game.

Define to Deliver

A customer experience that isn't defined can't be delivered. Think, you turn up to a restaurant, and they ask if they can take your jacket. That one move shifts the expectation to a minimum of $100 a head. You go to another restaurant and ask for water, and they point to a tap in the corner; that's $15 a head. Customer experience is brand, and brand is pricing power. Let that sink in. What you do before, during, and post the transaction determines what you charge in the future.

If people love what you do, they'll refer you. Your sales process is not a random sequence of one-off events. It's got six defined stages:

1. Off-market

2. Launch week

3. On the market

4. Auction week

5. Auction day

6. Post-auction sale

Each of those six strategic stages has specific tactics and measurements to ensure the campaign is on track. If you do it well, you boom your clearance rate. What's the purpose of each stage? When do the alarm bells go off in each? The power of measurement is the ability to adjust to keep things on track.

Zero to Hero

I get asked a lot, how do you go from zero to hero?

1. Learn your listing presentation - it's the ultimate story of what you do for the client.

2. Get exposed to more customers. Do more opens; aim to get to 5 opens every Saturday and things will change for you.

3. Dream big, and build a team. Your scale points are usually every 30 transactions. That's when you add someone to your team.

4. Define great customer experiences. Make sure they are scalable at 100 transactions per year.

5. Sell out your calendar. If you don't ask, you don't get it.

The power of measurement is the ability to adjust to keep things on track.

Put Some Speed On It

Markets move quickly, and so can you. The creating economy disregards the 'conditions of the day'. Instead, you get out there surfing, finding the buyers who want to buy and the sellers who want to sell.

In your sales meeting every week, work up three reasons why buyers should buy, and sellers should sell.

For buyers:

1. Getting close to the top of the interest rate cycle and the bottom of the pricing cycle, rents are increasing; buy now to ride up the recovery.

2. Acquisition costs to upgrade are the cheapest they've ever been. The house you wanted is cheaper than it was. The changeover costs to buy up are more favourable.

3. 400,000 migrants have landed in Australia before June 30, 2023. Most will rent initially; they'll qualify for a home loan in two years. With the slowdown in building, building costs, etc., this new demand will drive house prices in 2025.

For sellers:

1. Beat the mortgage cliff expected when borrowers come off fixed home loans. Sell now before you find yourself selling in a market with people who have no other choice but to sell.

2. Get into a better asset class. Houses, on average, went up more than apartments. Sell the apartment, buy a small house, sell the small house, buy the bigger house, etc.

3. For investors, sell the asset and lock into a guaranteed return without risk, with a term deposit at the bank. Sure, there's no capital growth event, but there's a good return with no risk.

Based on how you've been operating, here's the question: Have you been floating up and down based on the market cycle? Or are you a part of the creation economy, where every time you see a listing or a sale, you connect with your customers who are impacted, find out where they're acting, and create opportunity?

So now, ask yourself, 'Are you a part of the creation economy?' And if the answer is no, what are you doing to do to change it?


Josh Phegan is the internationally renowned go-to speaker, trainer and coach for high-performance real estate agents and agencies. He is the number one preferred trainer for Australia’s top 100 agents and top 50 women in real estate.

In 2023 he’s the drawcard speaker at over 200 events in the UAE, UK, New Zealand and Australia.

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