We live in an era of chaos (with worldwide Government intervention), filled with the language of uncertainty (we’re not sure, we can’t rule out, we might, which promotes anxiety of the future), waves of drama (micro issues that flair up to in-the-street protests and fade in minutes), sugar money (everyone’s become rich all of a sudden), low work ethic (what happened to all the workers?), rapid inflation (your money doesn’t buy what it used to) and inflated asset prices (cars, boats, watches, motorbikes, real estate). So what happens next?
Welcome to the world of uncertainty. We’re not sure, we can’t rule out, and we might. We hear it from our political leaders, our work colleagues, and our friends across social channels. The cancel culture, the anxiety club, the gossip group. Whatever you want to call it, it washes away our confidence for the future. We live in a VUCA world - one that’s filled with Volatility, Uncertainty, Complexity and Ambiguity. First used in 1987, drawing on the leadership theories of Warren Bennis and Burt Nanus, VUCA couldn’t be more accurate than our current operating environments.
Imagine starting your day in the office, the boss walks past, ‘Morning, just so you know, we may fire you this afternoon, we can’t rule it out, have a great day’. That one sentence sends you into chaos. We wouldn’t do this in the workplace, so why do we do it in real life?
We’ve moved into a reschedule, cancel, schedule again, delay and put off culture. Cancel culture needs to be cancelled. We need a world filled with confidence, certainty, simplicity, and decision making rules. Rather than be reactive to the news of the day, we need to set a date well into the future, and on that day we'll decide what will happen. It lets us keep on playing to where the puck is going, to do great work and to dream of a much bigger future. People stuck in the chaos of the day and the drama of the moment promote small ideas, live in a permanent state of the present, and lack the foresight for future planning. As we enter the third year of the pandemic, we need to promote language that supports a much bigger future. International markets like Dubai reference ‘healthy distance’ as opposed to ‘social distance’. Both are 1.5 meters apart, but the difference in how we feel, operate and play determines our creativity, problem-solving ability, and general outlook on what comes next.
What Happens Next?
A correction follows every boom. Corrections are a natural state in every property market cycle. Booms and busts are often influenced heavily by government policy of the day.
Booms are driven by incentives like first home buyer grants, first home builder grants, stamps duty concessions, lowering of interest rates, reduction of interest rate buffers, and removal of investor lending restrictions. When a market overheats, affordability comes back to the headlines; policymakers shift to find a balance between a growing economy and not letting that get out of control. APRA (The Australian Prudential Regulation Authority) regulates how much money banks lend, what percentage can go to home buyers versus investors, deposit requirements, and debt to income ratios. The RBA (Reserve Bank of Australia) determines the cash rate of the day. Whilst interest rates were a great indicator as to the intention of the government of the day, APRA’s intervention has been far more prevalent in modern monetary policy to shift markets in seconds.
With each wave of the virus, both APRA and the RBA have been hesitant to act, not wanting to cool the market too quickly during volatile times. Stories from NZ show that movements too early produce crazy situations, including the home buyer who was knocked back for finance as they’d bought a lottery ticket in the last 90 days, which may have indicated an issue with gambling.
We know that sustained price growth without wage growth, population growth, or additional supply for the disadvantaged in our community, is unsustainable. At some point, the party comes to an end. Be an agent for all markets and quickly adapt when the changes come.
Adaption is about monitoring subtle changes like online inquiries, inspections, second appointments, offers, and the number of active bidders on auction day. Not all properties will be the same. ‘A’ grade or prized assets always sell well. ‘B’ and ‘C’ grade property with issues around floorplans, structural defects and locational issues are the first to suffer.
The market that goes up the fastest is usually the one that comes back the quickest. Great agents move to logical management; benchmarking with owners the expectations around what will happen each week of the campaign.
New tools, such as daily updates via a WhatsApp group between the agent, support staff and vendors, allows for the latest information around new listings to market and sales made in the last 24 hours. New listings promote competition for the same buyer pool, whilst a new sale showcases a property that’s stolen another buyer from the buying pool.
Markets become price sensitive with strong owner expectations, followed by bearish offers from a buyer, if any at all. The skill moves from the capacity issue of dealing with all the buyer enquiries in a boom, to getting a buyer to inspect a property during a private appointment to extract an offer. Buyers who have something to sell if they buy become the cornerstone of your buyer work. Listing numbers swell as days on the market increase and agents move to re-positioning assets with new marketing campaigns, re-pricing and even re-auctioning.
When the next wave of market conditions arrive - Align. The skill is to move past the chaos, distractions and never-ending media cycle of the day, and get back to dreaming. Most of us have enjoyed the relief of an overseas holiday to ‘switch off’. With mobile devices making us available 24x7, we feel more connected than ever to work. The skill is to balance great service and accessibility with clear time out and away from the game. The latest Apple iOS allows for ‘focus modes’ where you can determine what apps, what people, and what times any of those can access you. It’s a game-changer that lets you do more focused work to shift momentum.
We need to get back to dreaming. Agencies lease commercial premises with five-year terms, so you need a business plan for at least the next five years. What are you planning to do? Which markets will you dominate? And what service lines do you expect will have exponential growth?
Balance sheet items, including property management growth and commercial building ownership, are long term games. You need to be clear on what you want. Will this or won’t this get you to where you want to go? The secret is to set big goals, then map out the strategy.
To own a new market you need to recruit well, have a great marketing program, and consistently drive market share, one listing at a time. Too many set the strategy, never measure and never adjust. Fewer strategies, more measurement, and more adaption (adjustment) is the recipe for success.
This was evidenced by McDonald’s 3-tier strategy to adapt during the pandemic. They moved to digital ordering, drive-through and delivery. Delivery alone shifted the business from $1bn to $4bn in annual revenue in the first year of the change.
For your agency, what are your three?
1. Drive productivity of your existing agents
2. Drive digital adaption (systems, reducing wastage, streamlining)
3. Work past clients, landlords and buyers for your future buyer/seller pipeline
Marketing ROI booms when it increases the spending of the existing customer.
We need to build confident, service oriented people. We’ve all seen it - the customer service person in retail, on their phone, struggling to give you any attention, as they are sucked into the screen of content rather than doing their job.
Confident people know what to say when. They’ve been drilled on service experience. Great businesses document what they do, why they do it, and how to do it. Then they teach their teams, train them, and test their competence. Melbourne Estate Agencies do a wonderful job of this in training auctioneers of the future. Rather than the weekly scripts and dialogues session that’s rarely attended, why not pull apart an essential part of the process, teach it, train it, and test competence.
We live in a world where everyone already knows. To know and not to do is to not know at all. We are the experience creators. Experience determines the fee. Understand what the customer does before, during and after the transaction. Write it down and map it out in a workshop with your team. Make sure they understand. Get them to demonstrate real-world skills.
The Rise of AI, IA and HI - we live in a world where we expect technology to do it for us. Artificial intelligence learns how to work with the customer to anticipate their needs. Intelligence augmented is where better information is put in front of the agent to decide what to do next. We’re on a freedom rally to drive the adaptation of human intelligence.
Training your people on what to do in real human situations, like spotting the buyer who comes back for a second appointment, brings a tape measure and has a cheque book. Simple skills that radically shift results. A combination of all three will make a huge difference to the highly skilled agents of the future.
Meeting Rhythms and Routines
The more often we meet, the faster the pace of the organisation. We’ve got lots of data, and plenty of it sits in our databases, but what do we do with it next? Sure, the AI and IA can take care of the digital experience, but real-world nous makes a huge difference to agent success.
Each day hold your daily directions meeting:
1. What’s ahead?
2. Next three listings/sales?
3. What’s been listed/sold in the last 24 hours? And who should know?
4. What’s left over from yesterday that needs to be done today?
If you start the day like that, you focus on the game.
There are four specific lists for any great business:
Seller Hitlist: these are the sellers you’re about to pitch on, have just pitched on, or have a proposal or agency agreement, and they're about to decide on either you or someone else to represent them. The skill is to know what to do next in your follow-through until it’s listed. Anything from showing them something to buy to getting in front of them with another agent from your office to win the right to represent them. There are probably 3-5 people on this list; it needs to be reviewed every day and it changes almost on the hour.
Buyer/Seller List: these are the buyers you know will sell with you if you find them something to buy; uncontested business. Go for growth - Make it happen. Review this list every day and match it to the newly listed properties by any agency in your area. If you don’t refer them to the home, they’ll buy and most likely sell through someone else.
Market Appraisals: this is every seller you’ve ever met face to face to give them an idea of the value of their home. Make sure you know their problem, timeline and destination. The more you know about the client’s problem, the quicker you can help. This list needs to be reviewed every week. What can you do to assist each seller in coming to market?
Buyer Hitlist: who are the buyers you know are ready to buy? Simple things, like they've bid at an auction, sold last weekend, and need to buy by a certain date for a job relocation or a tax event. Every day this list needs to be reviewed.
