AGENCIES THAT lack emotional appeal for consumers and staff – a product of the ‘intangibles’ – will never be more than just typical or average, a prominent West Australian principal has said.
“The real ability to differentiate yourself in the marketplace is now in the intangibles, and that is the hardest thing to address, but it is the place that’s the most powerful,” John Percudani, director at WA-based group Realmark, told a group of principals in Perth in late February.
Speaking at the WA Real Estate Open Forum, an event organised by Macquarie Bank, rent.com.au and Realestimations, Mr Percudani said his own firm evolved from a “typical” company turning over $1.5 million each year to doing the same sales figure each month.
This was due largely to Realmark’s building the intangibles, things that helped his company – which he runs jointly with his wife, Anita – stand out from the real estate agency crowd.
‘What is the emotional product, the emotional promise that we are delivering?’ ‘What is it that Realmark is trying to sell to its clients?’ were the questions Mr Percudani asked his company five years ago. Marketing your company as the most professional isn’t enough, he said. Today’s consumers expect that.
In Realmark’s case, the primary emotions the agency decided it was selling were “trust and hope”, Mr Percudani said.
“If we can go to a client and we can communicate to a client that, with us, they’ve got a better hope of getting a better result than [the competition], then we really get a connection with the client.
“If we can now add to that a real trust factor – that they can trust us, that we will not undersell their property, that we will deliver on what we say, that we will be with them through the process – the combination of these two emotions, trust and hope, is a very beautiful product to sell to a client.”
Mr Percudani added that companies also need the right attitude and culture. Attitude must start at the top, although agencies should avoid a ‘command and control’ model of management. Humility and appreciation are absolutely paramount, he said.
“At the end of the day, we do not make Realmark about us [the owners]; Realmark is about them [the staff].”
While some real estate professionals questioned Mr Percudani’s comments – one asking whether ‘hope’ was a valid business strategy – he responded by reiterating that being professional and technically competent is no longer enough.
“In today’s world the game changer is not in the ‘physical stuff and craftsman-like know how’,” he said. “Now, it is increasingly also about connecting with clients and staff around the ‘emotional promise’ to ensure the brand resonates internally and externally.”
Domonic Thompson, senior manager at Macquarie Relationship Banking, said Mr Percudani’s talk came about as a direct result of industry demand.
“The event focused on marketing, how this has changed in recent years and how it will continue to change and evolve,” he said. “It was about putting yourself in your clients’ shoes to really understand their needs and how they want to be communicated with.”
Mark Sinclair of Realestimations said principals in WA had a lot to learn about how they operated their businesses, although Mr Percudani’s experiences showed how change can be managed.
It’s about “getting an understanding that change is here now,” he continued, “and unless [principals] start to make some changes, they might not be here in five years’ time.
“It’s building a brand, whether you’re part of a franchise or an independent, and understanding the relationships with your staff and your clients. That’s where we’ve got a long way to go.”
Doing the basics remains paramount, added Kevin Attree, director of Attree Real Estate, the number one selling agency in Perth south of the Swan River, according to Real Estate Institute of WA (REIWA) statistics.
“I think the key is simple strategies, based around culture and having fun,” he told Real Estate Business after the event. “The focus isn’t the house, it’s the person, and the people who have passion will succeed.”
Mr Attree acknowledged he used social media and technology sparingly and that he’d “sooner go and talk to people. The reality is, if you could go and talk to 10 people every day, 50 or 60 by the end of the week, you are a far better position to build your career.
“I hear people say the market is tough,” he continued, “but it’s only tough if you want it to be tough. This month we’ve listed about 30 homes, and we’ve sold around 19 or 20. That tells me there are enough transactions going on.”
According to Mark Woschnak, managing director of rent.com.au, principals must acknowledge the importance that culture and values now play in the business.
“The new world is a balance of things; it’s not just the product, it’s not just your knowledge and skill sets, and it’s not just the culture that’s going to win you business. It’s a mix of all of those things,” he said.
“It’s how to portray that in all parts of the business, right down to the hiring of new staff,” he added. “It’s more about the values of the person first and the skill set second. I believe you can train on good values, but it takes a lot longer to train good values.
“The challenge is for older principals to accept that. Whether you want to call it Gen Y, or the flow on effect of Gen Y, things are more open, more transparent – feedback, emotion and motivation are a bigger part than they ever were before.”
Mr Thompson believes change is a constant: “I believe that the key takeouts for agents were that the way in which they interact with their clients, and indeed are expected to interact with their clients, is ever-changing and needs to be constantly top of mind. Ultimately, each business is accountable for its own success.”
Peter Sim, owner of business broker Agency Crossmatch, who was also at the forum, agreed with Mr Percudani’s comments on the importance of office culture.
“It’s critical,” he said. “The last business I looked at in a big way was really struggling. It was a really good business, a big rent roll, but you walked into the office and you could feel the tension. So, when I interviewed the staff – and in this particular business there was one staff member who was in a lead role but who was poisonous to the rest of them – they saw it that way.
“If I hadn’t got in there we would have lost staff.”
Business plans are also a must, Mr Sim added. “The plan doesn’t have to be difficult,” he said. “I’d prefer a short business plan – as long as they do what they say they’re going to do and they’ve set KPIs. They need to have some basic knowledge: [for example], how much has a sales representative got to make to make me a return. Most of them don’t know that.”
He acknowledged that it’s tough for principals who also list to find the time to do these things.
“The main thing that has to happen is they’ve got to become very good at recruiting because you’ve got to get other people to replace you somehow, and you’ve got to be able to train them,” Mr Sim said.
“And you’ve got to have some capital behind you to really do it properly.”