A Phil Hall Op-Ed: In the media world, the salespeople who are tasked with bringing in paid advertisers are an invaluable part of the organization – after all, without their work, companies would be sorely lacking the revenue needed to keep their operations afloat. But throughout my career as a media professional, I’ve found myself in companies working alongside salespeople who were utterly incapable of doing their jobs in something that could be mistaken for a competent performance.
I’m not trying to be funny or snotty in making that declaration – their ineptitude was genuine. While in some cases their bumbling was coated in sincerity, in other cases these folks went about with an air of insouciance while moving from one debacle to another. The one thing they had in common was that they either brought in the barest minimum of advertisers or nothing at all.
Yet the biggest problem I’ve I encountered with these less-than-stellar salespeople came from the people running the companies – they were not the least bit disturbed by this dismal work. At one company, the person tasked with advertising sales failed to secure any company to advertise in one of our publications. When I asked the publisher if he found that result acceptable, I was not given an answer.
At another company, the publisher was cognizant of the dismal work of the salespeople but shrugged off their lack of effort by acknowledging, “They always go after the low-hanging fruit.” In both cases, I tried to help the salespeople by pointing them to contacts at companies that expressed interest in partnering with our publications, and in both cases my efforts to assist were rudely ignored.
And what ultimately happened to these companies? One of them wound up being sold for pennies on the dollar and the other enacted layoffs and hired cheaper and less qualified workers – though, perhaps not surprisingly, the bumbling salespeople kept their jobs.
Of course, my experience is in the media industry. Still, I am curious to know if this carries situation carries over into the real estate industry. Most media salespeople, not unlike their real estate counterparts, rely on commissions to make a living. And one might imagine commission-driven would work aggressively to get their clients. But is this always the case?
I would think that the National Association of Realtors’ settlement regarding commissions would have been a wake-up call for the less productive members of the real estate profession to re-evaluate their performance outputs. Or maybe the initial panic generated by the settlement was replaced by a business-as-usual environment?
Thus, I would like to open this into a dialogue among the readers of this column – you can share your input in the “Comments” box below this text. My questioning is simple: How does your company deal with agents and brokers who chronically underperform? Is this type of performance greeted with a shrug, or do the underperformers ever get a shape-up-or-ship-out talk to ratchet up their results?
What has been your experience in dealing with agents and brokers who don’t perform at a level where they should be? Please share your experiences below.
Phil Hall is editor at Weekly Real Estate News. He can be reached at [email protected].
Photo: Comstock / Getty Images
Sadly, mediocrity has become an acceptable level of performance. I am not sure why, but I can tell you how I dealt with it when I ran a branch office of 150ish real estate agents. From top down levels of production, determine 4 quartiles, top 25% (the top producers), second 25% (those hungry to get into top 25%), third 25% (usually 1 to 3 years in the business and producing), then the lowest 25% (those who can’t or choose to not perform). Keep the top quartile happy, coach Q2 and Q3 because they will continue to perform, group training with Q4 for a specified time and then they get to move on to a better fitting company or career when performance does not move them into Q3.
The number of agents that a company will carry depends on the size of the company or office and the minimum amount of commissions the agent produces. Some smaller companies let agents “hang” their license on the wall but don’t have a production quota. That would be for part time agents. Most companies have a desk fee to cover the basic costs to run their operation. Some take 50% of the generated commissions up to a certain level and then scale it back for the higher producing agents for company retention. I found that it took 5 years of hard work to get established as an agent whereby the agent have some decent income and can live directly off of their Real Estate sales. So there can be a grace period to let the agent grow into the business. Most agents know that if Real Estate sales is their cup of tea in a few short years in the practice. That is why turn over has been very high with Real Estate sales persons. In the Real Estate offices I worked in I found the owners and/or managing Brokers to be fair and to be very encouraging.
Most Real Estate Agents are independent contractors who are “affiliated” with a Brokerage not “employed” by them. Agents pay fees to the Brokerage for oversight and support and all commissions go to the brokerage for dispersal to the respective agent. Basically if you don’t close transactions, you don’t get paid and you still have to pay brokerage fees, mls dues and other costs of being an agent. That pay structure has a tendency to weed out unproductive people. The bigger problem we have in our industry is competence. The entry requirements for getting licensed is low and there is little formal training at many Brokerages afterwards. Unfortunately, incompetence is what lead to the lawsuits that all of us will pay for.