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Dear Friend,

This week we’re going to talk about a simple way to organize your business around it’s key 3 functions.

I’ve been thinking and studying a lot lately about the structures that support a successful Real Estate or Mortgage business, and what would be the optimal organizational system. I’ve been watching closely as I see Realtors and Lenders building teams of assistants and sometimes just creating more confusion in the process. Here’s what I’ve discovered.

A simple way to think about your team, and its needs, is to break it down by the periods of your relationship with your new prospects from the time they first respond to an ad or call you, all the way to the time they become advocates.

This model is based on the premise that you can’t do all things at all times, and a way to divide your team up into three individual Operating Units, based on the function they provide along the timeline of your relationship with a new prospect.

The simplest way to think about these units is as the Before Team, The During Team, and the After Team. In this model, the ideal situation would be to have separately run units that serve their function completely.

The Before Team

The BEFORE team is responsible for everything that happens to get NEW prospects, and create new business. It’s the division that runs your APS marketing, places the ads, tests the ads, gets the yellow signs out there, records and monitors the scripts, etc.

The Before Team is constantly testing and refining your marketing. Its focussed single mindedly on one purpose: to deliver buyers who are ready to buy, sellers who are ready to sell, or people who are ready to get pre-approved for a loan.

The product of this independent unit is measured in the number of these people it yields, and the cost to deliver them.

Think about how focused you could be if you’re only purpose was to generate leads, and you didn’t have to get bogged down in serving those leads, or get caught up in the details of a transaction that’s falling apart, or putting out fires.

The reason I’m suggesting separate teams like this is because of what I see happening in teams that don’t have independent roles like this. The priority is ALWAYS on the urgent transactional things that are going on in these businesses, and consequently marketing, after-sale service and nurturing lifetime relationships take second priority.

If you have a team who’s sole function is to do one thing, it can become very efficient at doing that thing. There is no prioritizing, no juggling or compromising, it can focus 100% on performing its best.

The DURING Team

Imagine what it would be like if all you had to do was deliver world class value during the actual transactional process of helping someone find a home, sell their home, or get approved for a loan.

Wouldn’t it be great if every time you found someone a home, you had someone else who was waiting for you to devote your whole attention to their needs. Think about how relaxing that would be. You have appointments with pre-approved buyers, they’re already committed to working with you, and all you have to do is find them the perfect home and negotiate the contract.

This team needs to be very operationally excellent. They need to be organized and systematized so that all the details get taken care of, and everything gets done efficiently and every aspect works together to create a WOW! experience for your clients.

Most of the time, when Realtors and Lenders start building teams, this is where they get the help. They hire a transaction coordinator, or a listing manger, or a loan processor. Someone to help with the work.

The mistake they make is in expecting that same support person to be the one who handles the marketing, gets out the monthly client newsletter, and handles ALL the support functions in the business.

The challenge with this, is the transactional things always get in the way. If you ask your assistant what the values hierarchy is, it’s in the transaction. The other stuff – marketing and after sale service – is just a source for procrastination and guilt when they’re too busy to do it.

The AFTER Team

The function of the AFTER team is to pick up from the point that someone has a contract on their home, and is preparing for the move. The goal is to provide an outstanding level of after sale service, make sure the clients have a smooth transition into their new home in the first 90-days and then focus on building advocates.

This would be like a concierge service, and an advocacy service. The measurement for
this team is the number of referrals they generate – the YIELD from your portfolio of
clients. I say yield because your clients are really your biggest asset. If you manage this asset well, you can yield a constant stream of referrals and new relationships every year.

Think about this; If you manage your portfolio of 150 clients for a 20% annual return, that would be 30 new transactions each year. That’s certainly worth having someone who is responsible for making that happen!

The best part is, to get a 20% annual return on each client means that they would have to either refer ONE person, or move themselves again in the next 5 years! How easy is that? What if you could get 30% or 40%? The potential here is huge, and if you have a division of your company, an independent UNIT who is singularly focussed on this one task you can see how profitable it could be.

So how do you get started?

Well, the first thing is to realize that an Independent Unit doesn’t have to be a staff of 4 for each team, it can be one person, working in their home, part-time, or coming in to the office 5-10-15 hours a week to start. The important thing is that you start differentiating the roles of your business, and start holding each unit accountable for it’s own results.

How many leads is the Before team generating and what does it cost?

How many transactions is the During team able to handle? How much does it actually cost to sell a house, find someone house, or process a loan?

How many referrals is the After team generating each month? How many advocates (people who are referring 2 people a year) have they developed?

Start thinking about your business like this, and notice how simple actions can make a big impact!

Here’s A New Way To Think About Your Before, During and After Divisions…

One of the questions I’m asked all the time is “How do I budget for my Before/During/After divisions?” The most common thing I find among Realtors and Lenders when they first start growing their business is always the same, the first thing they do is start stacking up in the During team.

Take a look at your team right now. If you have a team, you probably have an administrative assistant, or processor. A buyers agent or two, a listing manager…and if there are any more people than that, they’re usually involved in the During division.

Why? Because that’s where everyone perceives the MONEY happens. That’s where all the
emergencies and urgencies happen. That’s where all the things that need to get taken care of NOW happen. The things that happen in the DURING process are urgent and important, or sometimes urgent and unimportant, but they always receive priority treatment.

Another mindset that hurts in setting up your divisions is the mindset that delegation means you pay as little as possible for tasks that are not directly money-related. So, the natural tendency is to look for a low cost person to delegate to.

Here’s a New Way To Think About Your Business Divisions.

When I explain this concept to my consulting clients, I have them imagine that I was the head of a large corporation (it could happen) that was setting up our headquarters in your town and we would be moving 100 people a year in to the area for the next 5 years.
I have the ability to direct those people to any Realtor or Lender I like – and I like YOU. The only thing I ask in return for these 8 new clients every month, is a 25% referral fee.
Would you do it? Most of the people I ask, would do it in a second. Think about it. You’ve got someone who is going to deliver you 100 ready to buy clients every year for the next 5 years. You don’t have to spend any money in advertising, no time prospecting, no wondering where your next transaction is coming from. All you have to do is deliver a world class service to them so I look good.

Wouldn’t that be the best thing that could happen to you? What are the odds of that happening?

Unfortunately, very slim. But, what if YOU could provide those 100 clients — what if you had a budget of 25% of your anticipated revenue for the year to find new clients?

Let’s say your average commission is $4000. Do you think you could find new prospects for less than $1000 each? You’ve already established that you would be more than willing to pay ME that much for new leads. Why not do the next best thing, and start a division of your company that only finds new prospects.

It’s easy to generate new clients for less than that. In fact, you should be able to generate new clients for a couple of hundred dollars.

Think of the difference between what you can generate those transactions for, and the 25% you already told me you’d be willing to pay as the PROFIT of your During division.

Now, what about your AFTER division? Your After division works the same way. It all starts with a goal for monetizing the division. If you’d pay 25% for new business in your Before division.

Why would it be any different in your After division?

Start out by setting the goal of a 20% annual return on your relationships with 150 – 200 people. If you have relationship with 200 people, that would mean 40 referred, or repeat transactions in the next 12 months — @ $4000 each that would be $160,000 from your After division, with a budget of $40,000.

I’d be willing to bet you don’t even spend a tenth of that on your After division. What if you doubled or tripled what you currently budget for your After division, and appointed someone to the position of Advocate Maker. The entire responsibility of this person is to exist and advocate to your clients. Serve those 200 people in whatever way they need, and be accountable for the number of referrals that come from this group.

It doesn’t have to be a full time position. Imagine if they spent 10 hours a week on it. Even 5 hours a week. Uninterrupted. Without the distraction of NOW division urgencies. It’s their whole job. Their ONLY responsibility. Don’t you think that would help increase the number of referrals you get?

If I can get you to do one thing this month, it would be to start thinking of your business in it’s individual divisions, and start accounting for them separately. Just changing your mindset like this will build it’s own momentum, and soon you’ll see exactly how to set up your team.

Now some of you are already working on your orchestrated referral challenge.

If you’re not aware of what we’re talking about you can listen to the last 2 episode of MarketingMonday.com and you can follow along with us.

For those of you that have already started keep us posted on the message board. I’ll be in there paying attention to everything that’s going on and hopefully at the end of the 30 days we’ll have some great stories to tell.

That’s it for this week, tune in next time and we’ll talk more about how to find buyers, get listings and convert leads.

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