Hiring Ineffective Salespeople Costs Real Estate Industry Millions
Hiring Ineffective Salespeople Costs Real Estate Industry Millions
Some Things You Probably Didn’t Know About Salespeople
1. As a talent-based vs. a learned skill, exceptional sales effectiveness is often inversely correlated with academic interest. Sales people typically do not shine academically. It is not that they are stupid, they simply have other priorities – like building social networks – and they typically have relatively little brain space allocated for theory.
2. Psychological theory cannot predict sales success. Psychometric and personality profiling tests are of little or no value in predicting whether an individual can sell or not.
3. Sales excellence can be coached but not trained. You can’t train a person for a job they cannot do and some people will never learn to sell as long as they live. So hiring and training estate agents who lack the necessary talent is a monumental waste of time and money.
4. Selling is a contact sport and classroom based sales training is of limited value. Real learning happens in the field and most great sales superstars have had mentors or coaches, and one of the most critical roles of sales management is coaching in the field.
5. Top performing salespeople cannot sell in all markets. A hugely successful account manger in the packaging industry would probably be a disaster in new business development in real estate. Another fact of note is that most great salespeople make very poor sales managers. Less than 15% of great salespeople in real estate make good managers-----scary thought!
Why Hiring Processes Fail
The typical interview-based hiring process is marginally more effective than flipping a coin (51%)
Typical Selection Processes
Hiring success rates aren’t much better than a coin toss*
Selection Method % Over “Chance”
Typical Interview 1% increase
Personality Tests 1% increase
Experience 5% increase
Scorable Interview 7% increase
*International Personnel Management Association, Feb. 1999
However with new predictive actuarially-based assessment technology provided by HR Chally of Dayton Ohio, a structured scorable interview and proper reference checks, a hiring accuracy of >90% is possible.
In recent discussions with real estate executives, they were asked to define the characteristics they associated with successful agents. These were:
• Assertive
• Hard working/High energy levels
• Outgoing personality
• Good interpersonal skills
• Good attention to detail
When a validation study was conducted, these attributes were found in equal measure in the super performers and the abject failures. In other words they were “nice to haves” but not predictors of success. Further correlation studies revealed that the real success drivers were:
• Lead development
• Problem solving
• Qualifying leads
• Commits time and effort to ensure success
• Closing skills
• Opportunistic
Another phenomenon encountered in real estate sales, is new entrants to the business who start off brilliantly but leave after a year or less. This drives managers of realty companies nuts, but the answer is not difficult to find. Quite simply, there is a mismatch between the individual salesperson’s natural selling style and what is required in real estate. For example, account managers----the classic “relationship” salespeople----really thrive when they look after a small portfolio of customers or accounts with whom they build deep, and often lasting business and personal relationships. However, put them into a deal driven industry with a fairly short and intense sales cycle, they seldom last. They have the selling skills to do the job, but they simply don’t like it and move on.
The barriers to entry in real estate are low and, regrettably, many new entrants to the industry have little or no chance of surviving in a tough business. The resulting attrition rate is high and horrendously expensive, notably the costs of lost opportunity. Increasing hiring accuracy can have a dramatic impact on the profitability of any real estate company.
Hiring Ineffective Salespeople Costs Real Estate Industry Millions - To learn more about this author, visit Peter Gilbert's Website.
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If ever there was an industry that lives or dies by the performance of it’s salespeople, it is real estate. But real estate sales, like insurance sales, suffers from a cripplingly high failure rate when hiring new salespeople, and the reason is that these industries employ highly ineffective processes for identifying and hiring fresh sales talent.
Some Things You Probably Didn’t Know About Salespeople
1. As a talent-based vs. a learned skill, exceptional sales effectiveness is often inversely correlated with academic interest. Sales people typically do not shine academically. It is not that they are stupid, they simply have other priorities – like building social networks – and they typically have relatively little brain space allocated for theory.
2. Psychological theory cannot predict sales success. Psychometric and personality profiling tests are of little or no value in predicting whether an individual can sell or not.
3. Sales excellence can be coached but not trained. You can’t train a person for a job they cannot do and some people will never learn to sell as long as they live. So hiring and training estate agents who lack the necessary talent is a monumental waste of time and money.
4. Selling is a contact sport and classroom based sales training is of limited value. Real learning happens in the field and most great sales superstars have had mentors or coaches, and one of the most critical roles of sales management is coaching in the field.
5. Top performing salespeople cannot sell in all markets. A hugely successful account manger in the packaging industry would probably be a disaster in new business development in real estate. Another fact of note is that most great salespeople make very poor sales managers. Less than 15% of great salespeople in real estate make good managers-----scary thought!
Why Hiring Processes Fail
The typical interview-based hiring process is marginally more effective than flipping a coin (51%)
Typical Selection Processes
Hiring success rates aren’t much better than a coin toss*
Selection Method % Over “Chance”
Typical Interview 1% increase
Personality Tests 1% increase
Experience 5% increase
Scorable Interview 7% increase
*International Personnel Management Association, Feb. 1999
However with new predictive actuarially-based assessment technology provided by HR Chally of Dayton Ohio, a structured scorable interview and proper reference checks, a hiring accuracy of >90% is possible.
In recent discussions with real estate executives, they were asked to define the characteristics they associated with successful agents. These were:
• Assertive
• Hard working/High energy levels
• Outgoing personality
• Good interpersonal skills
• Good attention to detail
When a validation study was conducted, these attributes were found in equal measure in the super performers and the abject failures. In other words they were “nice to haves” but not predictors of success. Further correlation studies revealed that the real success drivers were:
• Lead development
• Problem solving
• Qualifying leads
• Commits time and effort to ensure success
• Closing skills
• Opportunistic
Another phenomenon encountered in real estate sales, is new entrants to the business who start off brilliantly but leave after a year or less. This drives managers of realty companies nuts, but the answer is not difficult to find. Quite simply, there is a mismatch between the individual salesperson’s natural selling style and what is required in real estate. For example, account managers----the classic “relationship” salespeople----really thrive when they look after a small portfolio of customers or accounts with whom they build deep, and often lasting business and personal relationships. However, put them into a deal driven industry with a fairly short and intense sales cycle, they seldom last. They have the selling skills to do the job, but they simply don’t like it and move on.
The barriers to entry in real estate are low and, regrettably, many new entrants to the industry have little or no chance of surviving in a tough business. The resulting attrition rate is high and horrendously expensive, notably the costs of lost opportunity. Increasing hiring accuracy can have a dramatic impact on the profitability of any real estate company.
Hiring Ineffective Salespeople Costs Real Estate Industry Millions - To learn more about this author, visit Peter Gilbert's Website.
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Staging DivaDebra Gould, aka The Staging Diva®, is President of Six Elements Inc., an internationally recognized home staging company. Inspired by many requests from aspiring home stagers wanting to start similar businesses, Gould created the Staging Diva Home Staging Business Training Program. Gould has trained over 1000 Staging Diva Graduates worldwide to start staging businesses. Buying decorating and selling six of her own homes in four years lead to an interest in real estate staging which she turned into a career with the launch of sixelements.com in 2002. Since then she has staged hundreds of homes in addition to teaching home staging training. Gould is the author of several home staging resources including a series of popular ebooks made up of a Design Guide, Color Guide and Portfolio Guide. For more information about Debra Gould visit stagingdiva.com. - Visit Staging Diva's Website |
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Casey GollanCasey Gollan, Business Coaching & Mentoring Programs. Add $1 Million to $10 Million in the next 1 to 3 years. Since 1996 Casey has to added hundreds of millions of dollars to businesses. Watch a free video see client results Business Coaching website. - Visit Casey Gollan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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