A tale of two cities

Why should two similar agencies in similar markets, fare so differently? The answer, says Nathan Emerson, teaches us a lot about agency.

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The importance of running your business six months ahead can make a profound difference to your performance, as a recent session with the owners of several business demonstrated.

Two companies stood out in particular on the call. Although not directly competing they both share a similar sized operation, in similar sized city markets with similar fees and similar client demographics. Performance between the two has been broadly similar historically and yet their current results are widely different.

Regular readers will have heard me stress the importance of focusing on stock and the news that available stock is considerably down won’t surprise anyone. After such a proactive and busy marketplace, demand has outstripped supply and agencies are down as much as 40 per cent – which is a considerable margin.

Both companies had in fact enjoyed great levels of sales over recent months yet the stock for one agent was working with was now considerably lower than the other. He simply was not replacing sold stock as he needed to, this in turn is now starting to affect his ongoing pipeline yet his peer has been gaining enough instructions at healthy fees to maintain pandemic activity levels.

Learning experience

So how can two comparable businesses in two active cities be having such contrasting results?

I decided to make this into a challenge and learning experience for the other attendees on the call to decipher what was actually going on. Asking them to collectively understand what had occurred, the usual questions appeared. Average fee, conversion rates, staff experience and numbers, internet site and social media reviews etc? Watching the process was quite telling in many other ways! Telling in that the questions and answers sought were by enlarge of a reactive nature. This demonstrated much about the current mindsets of the business owners on the call. Most had been reacting to the furore of day-to-day activity themselves and were unable to see beyond the here and now.

Understanding is not always gained by looking at the results, but at the causation.

Imagine observing someone driving a car and watching the road in front of the bonnet. This works well when things are going slow but not when you are driving quickly!

Learning to read the road ahead and making pre-emptive movements is perhaps one of the hardest tasks to undertake but once you are in that position and have fought through the emergency manoeuvres then driving becomes a pleasure and the same emergency situations can be anticipated and reduced.

The simple principle

And so, it is with agencies. Sometimes the understanding is not gained by looking at the results someone is achieving but rather the causation of those results and by steering the conversation backwards, we were able to start taking a step back in time to understand what had triggered such dramatic figures.

The reality in this circumstance was perhaps a lesson for us all. Both agencies were working flat out throughout the past year yet one was clearly outshining his normal rival. How? Just applying one simple principle – consistency.

When things got busy, he took a step back and realised things were heating up. He didn’t know how busy everyone was going to get but he did realise that it would at some point cool down.

Making a brave move, he took just one member of staff and isolated her from the business and incoming enquiries. He had her purely dealing with client contact, database calling and prospecting.

He figured so long as he made enough money during the busy period to trade as normal and focussed a percentage of his existing resources looking after the client database he had been servicing for several years, by default many of these would eventually want to sell. This meant the rest of the team were all busier than usual, but he now had someone working 35-40 hours per week doing something very few agents were continuing to do. The more people they contacted the more they realised everyone else had dropped it.

So far this year he is just under 40 instructions up that came purely from this medium. That’s 40 properties he had little or no competition over and furthermore it cost him just £18,000 in extra salary.

Sometimes it’s not the market you operate in it’s the choices you make and the risks you take which make a difference…

Talk to Nathan: [email protected]

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