How to Increase Gross Commission Income Lincoln NE
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How to Increase Gross Commission Income
by Dirk Zeller
There are only three ways to increase your gross commission income.
- Increase the number of units you sell.
- Increase the sale price of the units you sell.
- Increase the fees that you charge.
All of these ways lead to more income. Both take effort and a good strategic plan to execute. In the end, they don't happen by accident. In this article I will deal exclusively with how to increase the sales price of the units you sell.
The biggest challenge for Agents who are trying to increase their sales price is breaking into higher priced marketplaces. Many times those marketplaces are dominated by long-time established Agents who work hard to keep control of them.
To really establish or increase your presences in any marketplace you have to take it from someone else. I know a lot of you are going to find that last statement uncomfortable, but it's the truth. There are only so many deals in the higher end marketplace annually. Your efforts will not substantially increase the number of transactions. You can raise awareness and selection of those people who are considering buying and selling, but your efforts have little effect on the total inventory units sold. The marketplace might go up a few transactions but not enough to help you establish a presence.
To really establish a strong foothold in a new marketplace, you will have to take it from someone else. Before you decide to enter a new marketplace you must be prepared to take transactions that you want from someone else. I believe there are many Agents who are uncomfortable with this concept. They hope that everyone can all get along and all make money. You can, unless you want a greater amount of the marketplace.
When you want greater market share, you create controversy and potential conflict. The truth is successful people think differently than unsuccessful people. When you are trying to take market share away you have to think like a General. When in competition for market share … you are at war. Again, I am sure some people are uncomfortable with that analogy, but it is true. There is no doubt that Coca-cola is at war with PepsiCo; that McDonald's is at war with Burger King; that Budweiser is at war with Miller. In each of these examples there is one company with a larger market share and another that is trying to get it. There are companies at war with each other in the real estate field as well. There are national wars as well as regional and local wars. There are also neighborhood wars for market share.
If you are at war you have to think like a General. Generals do a few key things, the first is:
1. Define the objective and direct all efforts toward that objective: The General sets a clear, obtainable goal. They understand how that goal is to be measured. The goal must be defined in detail. For this example it should be number of units in a marketplace: listing-side units, sale-side units, and buyer controlled sales, within a certain time frame. It could also be marketplace percentage of the gross sales. What is the objective you really want to achieve?
2. Understand the steps to success: Success has a process to be followed. A great General understands the steps and applies them with his army in the right order.
Step 1: The goal will shape the plan
Each goal that you can imagine determines the plan you have to apply; the more compelling, concise, and concrete the goal, the easier the plan to create. The probability of success also increases in relation to the clarity of the goal. The errors or adjustments you make also reduce as your clarity increases. The clearer and more broken down into chunks your goals are, the higher the probability of accomplishment.
Step 2: The plan determines the actionThe plan you use sets the specific action steps that you need. Having a clearly defined plan allows you to understand the action that needs to take place. Without a plan you might be taking action steps in the wrong direction. You could be using an improper route to achieve results.
Step 3 : The Action creates the results
Success in the final analysis is about action. It is about taking the actions that are necessary to increase the likelihood of the results you want to happen. For most Agents who want more deals, more income, more quality of life it's all about doing. All those results are contained in the actions you do and how consistently you do them. A great General has a plan that is action orientated, and he and his army carry out those actions. If the General doesn't carry out the actions and expects the army to do it for him, failure is sure to follow. As a General, the consistency of what is said and what is done is essential.
In trying to increase the sale price of the units you sell, you need to target areas that have the price range you want to do business in. You need to evaluate the individual market share of the dominant players in those market areas. You also need to try to find out what they are doing to attract the customers and market share they have. The next step is to evaluate if you have any current customers in that area. The best way to gain a stronger position is to work with your current clients to expand your reach. To straightforwardly tell them that you are trying to raise your sales price and expand into a certain market section, and can you help me out. Most of your clients that are in your corner will be happy to help. They could write a testimonial letter for you. You could then mail this out to the neighborhood. Then phone follow up behind it. Getting them to call you when they hear anything in the neighborhood is essential.
Another very effective way to expand in a marketplace is working with high probability listing prospects. Two excellent high probability listing prospects are expireds and FSBOs. These people have identified they want to sell. If they are in the area you want to expand into, the match is powerful. The key for expireds and FSBOs is going to the door if you can. Since you are trying to take market share away in a new area, you need to be physically visible in that area. By directing your efforts to these areas, FSBOs and expireds, it shows success by listing and selling these when others could not.
There are a number of ways to expand your business in terms of sales price. Some are quicker and more rejection oriented, like expireds or FSBOs. Some will take longer and are easier, like working through your current clients. What is the timeframe you want to achieve this in? For you to have more market share, someone has to have less. There is no way around that issue. The only question is what are you prepared to do?
Published: August 28, 2009
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