I received so much positive feedback about my presentation at the recent Negotiator Conference that I decided to present an edited version for this month’s column.
The title was “How to Become the Uber Agent in Your Area” and the question was, “Why is it that some agents are generating one or even five million pounds of revenue per branch whilst so many other agents struggle to make a living?”
An ordinary agent in most areas will now be charging a fee of 1 per cent or less. The first thing that an Uber agent will do is to command a fee of at least 50 per cent more than their competitors. They achieve this by making a superb presentation that convinces vendors that by paying a better fee, they will achieve a better price for their property. The concept is that it’s not the fee that matters, but the net proceeds, i.e. sale price minus the fee paid. If their fee is challenged, Uber agents won’t give in. They’ll fight three or more rounds to justify why their worth. Their valuers are trained to make these arguments and will practice them with roleplays every week.
The Uber agent gets more sales through to completion. The ordinary agent accepts a fall through rate of 30 per cent. The Uber agent reduces this to 10 per cent or less by virtually insisting that vendors and purchasers use their recommended solicitors and mortgage brokers, and by employing experienced sales progressors to manage every sale in a proactive way and resolve problems before they cause the sale to fall through.
It’s not the fee that matters but the net proceeds – sale price minus the fee – which justifies your worth.
The Uber agent will sell a much greater percentage of their properties. The ordinary agent will just stick properties on the internet and wait passively for a buyer – and typically sell less than 50 per cent of their instructions.
The Uber agent will sell at least 85 per cent their properties by taking a much more proactive approach. Their sales negotiators will have two or three hours every day of protected time when they make calls to applicants to encourage viewings. They will be given daily targets for the number of calls and viewings they must arrange. They will get sophisticated sales training to ensure that they don’t miss any opportunity and refresher training on a weekly basis. The valuers will also have several hours per week of protected time to keep in touch with clients and persuade them to agree to a price reduction when appropriate. They will have sophisticated data and visual aids to prove that a property is overpriced.
The next stage of the process is the conversion ratio of valuations to instructions. The ordinary agent might be satisfied with a ratio of 25 per cent. The Uber agent will expect 40–50 per cent. They achieve this with a superb structured selling presentation supported by professionally designed visual aids. They will be professionally trained each year in how to deliver this presentation and receive weekly refresher training. Many ordinary agents have not changed their presentation for 20 years.
The Uber agent succeeds in marketing – typically with a Google pay per click advertising campaign, top three position in the Google Directory and page one in Google free listings. The ordinary agent often does not appear until page three. The Uber agent has a big budget for professionally designed leaflets and letters, they monitor which leaflet works best. Finally, they have a sophisticated database of old valuations, withdrawn instructions and past clients and a dedicated telesales team to keep in touch with them. The results can be spectacular.
DO THE MATHS
The ordinary agent might attend 400 valuations per year – at 25 per conversion ratio, they take on 100. They sell 50 per cent which produces 50 sales. They complete on 70 per cent per cent, producing 35 exchanges. At £3,000 a go (1 per cent) this produces just £105,000 of income.
The Uber agent also attends 400 valuations per year but converts 50 per cent; producing 200 instructions, selling 85 per cent, winning 170 sales. 90 per cent complete, producing 153 exchanges. 1.5 per cent fee produces £688,500 income. Sophisticated marketing will significantly increase the number of valuations that they attend.
The Uber agents, however, are not unbeatable. Every thing they do can be easily replicated in any size of business. But this takes time and focus and dedication. The prize for getting the formula right, however, will handsomely repay the effort.
Adam Walker is a management consultant, business sales agent and trainer who has worked in the property sector for more than twenty-five years.