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Real Estate Brokerage

Here’s the better alternative to discounting your real estate services

(EDITORIAL) Discounting real estate services is a consideration on some practitioners’ minds, but there’s a simple alternative to diminishing commissions

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Put your consumer hat on when thinking of discounting real estate services. The goal is maximizing value in making a purchasing decision when choosing from among the alternatives. In the simplest terms, value is maximized through price, quality, or the combination of the two. The quality (reliability, consistency, features etc.) and price of a service or product are key decision influencers.

But what if the qualities and quality of a service (or product) appear the same? Well then, price rules! Price becomes the safe, certain, measurable difference where differentiation is uncertain.

Commissions are falling

The price of real estate brokerage services, as a percentage of home sale prices, continues to decline. There is evidence that the average residential resale commission in the U.S. has fallen below 5%. This trend is likely to continue and perhaps accelerate.

Price leadership, in an industry with an excess supply of service providers, is an easy and effective strategy to adopt.

So what is the alternative?

Is there an effective alternative to a low price/discounting strategy and will consumers “buy it”?

The marketplace is full of examples where consumers willingly elect to “pay more” for goods and services. When and why do they pay more? Consumers pay more when they believe they can experience more benefits and have a high confidence that their expectations will be realized. For today’s consumer, confidence and the willingness to pay more requires more than ad slogans and smooth talk.

That confidence and willingness are increasingly based upon personal experience, the experience of others, or a performance guarantee.

Minding your P’s and Q’s

An effective alternative to discounting comes down to minding your P’s and Q’s: Delivering greater value by focusing on the relationship between meaningful and substantive quality of the service offering and the price charged.

(V= Value) (Q= Qualities and Quality) (P= Price)

Consumers see things differently

Many brokers/owners and organizations are pursuing the notion that the way to deliver better service quality is to offer more services — as if more and better are synonymous.

Consumers hold another, more simplistic perspective… better is better.

Consumers are willing to pay more for better service. Better service is the Q variable in the Value formula above. Increasing the Quality of service, as a means of enhancing Value, can only be achieved by adopting a total system of service with processes, controls, metrics, performance feedback, recognition/rewards for measurably better service results and higher professional accountability.

The time is now

Quality service delivery requires more than a great attitude and good intentions. Quality service delivery must also include reliability, consistency, accountability, competence, and responsiveness.

Nicholas Murray Butler, a Nobel Peace Prize Laureate and former president of Columbia University once said, “there are three kinds of people in this world: those who make things happen; those who watch things happen; and those who don’t know what’s happening.”

The pricing threat is real and ongoing. Quality, measurably better service, through a total system of managed service delivery has arrived.

Kevin is a Co-Founder, President & COO of Quality Service Certification, Inc. (QSC) and earned an MBA from The University of California – Irvine. With over 20 years of Real Estate experience, his primary focus is on consumer research, developing better service management systems, and sharing the importance of consumer-centric service standards, transparency and accountability to create measurable and meaningful differentiation and long term advantage for those professionals that put customer needs first.

Real Estate Brokerage

The psychology behind why customers blame you for everything

(BROKERAGE) When things don’t go our way, we search for a cause, and tend to blame others. Psychology explains why customers point the blame at you.

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Man texting on phone representing client psychology.

The customer is always right – Is that real psychology?

We are all too familiar with the old adage, “the customer is always right.” While we know that it is virtually impossible for the customer to always be right, we play along because it is our job to do so.

Psychology attempts to offer some explanation as to why customers may behave the way that they do and why they love to blame “us” for everything (note: I use the term “us” in a universal sense, as it is not reflective of The American Genius).

Some complaints are warranted, but…

Retailers, restaurant workers, and everyone in between has dealt with a difficult customer or two. While sometimes their anger may be warranted, there are often times where the customer is projecting anger onto you.

There are behavioral theories within psychology, Attribution Theory, and Jones & Davis Correspondent Inference Theory, that may help to shed some light onto why people behave the way that they do.

Attribution Theory explains how we judge behavior

Attribution Theory is simply how we attach meaning to our behavior or the behavior of others. Fiske & Taylor explain that Attribution Theory tends to explain how humans judge behavior. If they are judging the behavior of someone else they are assigning internal attributions, while if they are explaining their behavior, they are making external attributions.

For example, if you are driving and someone cuts you off, you may assign an internal attribution that the person is a horrible driver. On the other hand, if you were the one to cut someone off, you would externalize your behavior as unintentional.

It is natural for people to always look for a cause behind an event. Searching for a cause could explain why customers place blame on us. Using the ideas from the example above, if you are at a restaurant and see that your order is wrong, you may attribute blame to the server in saying, “they don’t know what they’re doing”, when it was simply a mistake.

Inference Theory attributes behavior to personality

Jones & Davis Correspondent Inference Theory takes the idea of Attribution Theory a step further, and deals with how people pay particular attention to internal behavior rather than accidental or unthinking behavior.

The Jones & Davis Theory suggests we attribute a person’s behavior to their personality. This means that you would take the aforementioned assumption that the person who cut you off earlier is not only a horrible driver, but also a horrible person.

When something goes wrong at the (usually) unintentional hands of someone else, we internalize that behavior for them. This goes back to our initial claim that, if something bad happens, we search for a cause.

Easier to blame others than ourselves

Sometimes, it is much easier to place blame on others than onto yourself. The idea of attributing something helps to assign a meaning or a cause to let us organize our lives. Being that customers do not always see us as individuals, it is easy for them to cast blame if something goes wrong.

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Professionalism

Recognize and use free time at work like the gift it is with these tips

(BROKERAGE) Free time during your workday can lead to furthering your mind and productivity. Learn how to use it wisely.

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Woman writing in journal representing free time.

Clocked in but clocked out

We’ve all had those slow days at work where we’re looking for ways to kill the time until the clock strikes five.

While it can be tempting to use this time to text or mess around on the Internet, there are much better ways to use that free time that will make your future so much easier.

Cleanliness is next to godliness

First off, tidy up your workspace. Papers and items have a way of accumulating and may be distracting you even if you don’t realize it. By organizing your stuff and throwing away what you don’t need, you’re able to breathe and focus within your workspace.

It also does wonders for your work brain to clear up your email inbox.

Once that’s all done, plan out the rest of your work week. Make a list of the major goals you’d like to accomplish and then a sub-list of how you’ll knock those goals out. Update your calendar and make sure everything is on track.

Social media, networking, and research

It’s also beneficial to use this downtime to further yourself and your organization. Three ways you can do this is through: social media, networking, and research.

If you have access, take some time to look through your company’s social media and see what can be done to enhance it. Either throw up some posts yourself or pitch ideas to the social media manager.

Networking can be done in this small amount of time by sending out “catch up” emails to old colleagues, “welcome emails” to new clients or introduction emails to LinkedIn contacts.

Send them a “how’s it going?,” tell them what’s new with you, and see what they have going on. You never know where networking can lead so it’s always good to stay in touch.

With research, see what the latest trends are in your field and study up on them. This may give you new ways to look at projects and tasks at hand. And, it’s always beneficial to have continued learning.

Get Smart(er)

While on the subject of continued learning, take this time to mess around with something you may not feel completely knowledgeable of. Maybe dig around RPR data, perhaps practice using different computer programs it is never a bad a idea to nourish your brain.

Having free time during the workday is something of a gift. If you can help it, try not to waste it.

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Real Estate Brokerage

How you can stick with your habits and actually achieve your goals

(BROKERAGE) Sticking to new habits can be tough, but there are ways to train your brain. We’ve got the deets on the best way to beat fatigue.

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Person typing on computer representing habits in our workday.

Just about every Sunday night I say to myself, “This week, I am going to eat better.” And, just about every Monday afternoon, I find myself cooking the same frozen pizza I always eat. Why is it so difficult for us to stick to our guns and really follow through on developing better habits? Well, if you’re anything like me, it’s mostly because doing what you’re used to is so much easier.

Trick of the trade

Each year I find myself being notorious for skipping out on my New Year’s resolutions, my fitness goals, and my attempts at reading one book per month. Right when I was beginning to feel completely fed up with myself, I found a trick that has helped me form habits and maintain behavior to accomplish my goals.

And, this trick is quite simple: accountability.

This can be found in the form of a friend or in the form of a planner or calendar.

Creating accountable ideas

I have thousands of ideas per day, many of which are fleeting. However, some ideas are about self-improvement.

For example, I often have the idea of beginning a workout routine. While I know that I should be doing daily exercise to increase my overall health, it can be a difficult task to stick with.

By developing this idea into something that I am accountable for, it makes me much more likely to stick with this habit. Let me explain…

Accountable for others

The two aforementioned methods of accountability, a friend or planner, can be used for the given workout example.

If you find a friend who can daylight as your workout buddy, you have someone that will motivate you and that you can motivate.

Now that you’ve made this friend your workout buddy, you have someone to hold you accountable if you miss a day. Gone would be the days where you could skip a workout and have no one to answer to.

Accountable for yourself

But, if you are a solo exerciser like myself, it can be difficult to find a method of accountability. What I have found works for me is taking my thought of, “I should workout,” and putting my goals down on paper.

By writing down a workout plan and the attached goals, it fosters a sense of tangibility.

I then create a calendar where I write down what exercise I want to do on what day, and, after I complete my goal, I am able to check it out.

For the accountability aspect, I like to put this calendar somewhere in everyday eyesight, so that I can’t ignore it. And, sure, I could easily throw it away and pretend it never existed in the first place, but I promise the act of writing out your goals will motivate completion.

In the end…

While sticking to habits can be a tricky business and different methods work for different people, developing an environment in which you hold accountability helps to inspire motivation.

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