The first contact and the Principles of consultative selling
In this session, you will learn:
About consultative selling and the customer-based listing system.
The concept of consultative selling and the customer-based listing system.
Consultative selling is an entirely different approach to real estate selling.
Most real estate training continues to focus on getting the sale at any cost. This approach is based on two commonly accepted beliefs:
- That people can be manipulated or tricked into buying or listing.
- That consultants must use pressure and fast talk to get most people to buy or sell.
The underlying assumption here is that people are either stupid or easily led. But the reality is, they’re not.
Consultative selling is a way of working that salespeople are comfortable with and customers enthusiastically welcome.
It’s based on working with customers, not at them.
This customer-focused approach has long-term implications for the success of your business. Real financial success in real estate comes from listing, not from sales. It makes sense, then, to ask: where do listings come from? The answer is that 60 to 70 percent of listings come from past clients coming back again and referring you to others. Your clients are the foundation of your business success. You must therefore treat them honestly and ethically. This will enable you to maintain an ongoing business relationship with them long after a sale is over.
The customer-based listing system is divided into four parts:
- The first contact, which is the first contact you have with a vendor.
- The first visit, which is the first visit you make to the vendor’s home.
- Preparation, in which you prepare your presentation.
- The presentation, in which you present a marketing strategy to the vendor and obtain an authority.
The First Contact
- The importance of the first contact and being able to handle it confidently.
- The strategy for dealing with the first contact and securing an appointment.
Remember to get your workbook out and follow through in it, as you complete the lessons online. Do the work, complete your daily planner and do the exam questions.
Dealing with a first contact.
As we have seen, the first contact with the vendor is the first step in the customer-based listing system. This contact can be face-to-face or over the phone. It may be the result of prospecting or a contact made through your office. Whatever the circumstances, your objective and strategy will be the same.
It is vitally important that you are able to handle the first contact so that you are in control of it. If you just wait for things to happen and react to them when they do, you are likely to become nervous and say flaky things that don't make sense to yourself, let alone a vendor! If we have a set pattern for handling the conversation, these embarrassing situations don't occur.
Once you take control of the first contact, you also take control of your business. Remember that when a vendor calls you, they have decided to sell what is, in most cases, their biggest asset. Now, they are about to make a crucial decision - who to entrust that sale to. If you handle the situation confidently and know what to say, you will come across as a professional. The vendor will see you as someone who can be trusted with their asset. You will win listings, not by chance, but because you've demonstrated that you can do your job well.
The strategy for dealing with the first contact involves eight steps. The strategy is designed to get you the information you need for the first visit and begin your consultation-based relationship with the vendor.
Your objective during the first contact is to secure an appointment to meet with the vendor or vendors at their home
Thank you
Firstly, thank the vendor for calling. This is very important because ii sets the tone for the rest of the conversation. Too many people forget this simple courtesy.
Ask the vendor what prompted them to call your company. The vendor may be responding to prospecting you have done, or may have been referred by someone that you will need to thank .
Direction statement
A direction statement tells a vendor what is going to happen. It keeps the vendor informed and moving with you through the process
In a direction statement, you outline the process and explain what you would like or intend to do next. A direction statement always includes permission to continue.
Open questions
Use open questions to obtain a basic understanding of the vendor and their circumstances; for example: 'Can I ask why are you selling?" Except where appropriate, avoid 'closed' questions - ones that can be answered with 'yes' or 'no' Because open questions require the person questioned to construct a response, they will elicit far more information about the vendor's situation.
Always ask permission to ask questions and explain why you are asking them. This is a simple courtesy, but it is something most people genuinely appreciate. For example: "With your permission, I would like to ask you some questions. The more I know about your situation, the better I can help you."
Determine the decision makers
As part of your open questions, find out who will be involved in the decision to list and to sell, because they are the ones you will make the presentation to. You will be doing a lot of hard work to put that presentation together and you want to be giving it to the right people.
Don't assume you know who they are. Ask if anyone else will be involved.
There are a number of situations where another parfy or parties may not be obvious. For example, children may be selling their parents' home. Who will be making the decisions? If it's the parents, don't talk to the children first. Or if a couple are divorcing, you don't want to make a presentation to one and then find they have to talk to the other.
Another example is you may find a property is part of an estate, and one of the trustees is living in the Uk. In that situation, you would email the presentation to the absent trustee, do the presentation to the others and then ring the absent one and go through any questions they have.
In all these circumstances, if you're the one that gets the right people together, you will automatically get the listing. If you're not, even a great presentation will be just one in a pile of five or six, while you're waiting around to hear back from people.
Even after the presentation, it's important that you continue to involve all the decision makers throughout the whole listing and selling process.
Secure an appointment
Make an appointment to visit the vendor or vendors at their home. This is your primary objective.
Try to find a time when all the decision makers can be present. If a decision maker cannot be present, you may need to do some of your work twice.
Price expectation
Try to find out what price the vendor would like to get for the property. This information is not a factor in determining the market value, but it will give you an idea of what to expect when you discuss the price at your presentation. Part of your job is managing the emotional reaction to the difference between the vendor's price expectation and the market value. Knowing the vendor's expectation will help you gauge how much work you need to do on price during the presentation
lf the vendor appears unwilling to give a price, then let the issue go.
Competition
Ask if the vendor has approached other consultants about selling the property. If you ask, "Are you working with anybody else at the moment or has anybody else had a look at your home?", the vendor will usually tell you.
If you know this, you can determine the conditions and time constraints you are dealing with. lt will make a difference to how you make your presentation and when. Real Estate is a highly competitive business and you need to get your timing right.
Some consultants argue that they avoid this question because it plants the idea into the mind of the vendor, who will then act on it However, it is extremely unlikely that vendors are not aware of the competition. II is better to ask so that you know what you are up against and can deal with it in your presentation.
Introduce the Pre-Listing Kit And Finishing Up
This tells the vendor a little bit about you. This helps you at the first visit because it means you're not coming in cold. End your first contact with another direction statement, outlining what you plan to do when you come and present. Obtain permission to proceed
A demonstration of the First Contact
In this session you will learn:
- How to conduct the first contact.
Remember to get your workbook out and follow through in it, as you complete the lessons online. Do the work, complete your daily planner and do the exam questions.
In this exercise you will need to find a partner to role play the first contact.
The purpose of this exercise is to give you the chance to practice the first contact.
One person will play the consultant and the other, the vendor. Below is a link to the script for the consultant.
The vendor has just called the consultant and said she wants to sell her home.
DOWNLOAD >>> First Contact Consultant Script
The First Contact and Four common pitfalls
- Four common pitfalls to avoid during the first contact.
Remember to get your workbook out and follow through in it, as you complete the lessons online. Do the work, complete your daily planner and do the exam questions.
The Four common pitfalls: Agreeing to do an appraisal
It is common for vendors to begin by asking you to do just an appraisal.
Avoid the trap of doing an appraisal before you have an opportunity to make a presentation. If you do, you run the risk of being judged solely on the basis of the estimated price for the property. An appraisal should be part of a full presentation
for someone who is about to sell. It is not something that stands alone and separate from that.
If a vendor asks you to do an appraisal, find out when they plan to sell. If the vendor plans to sell in the near future – say, the next six months – then explain that you’ll do an appraisal as part of a presentation.
If the vendor has no plans to sell in the next six months, say:
Suggested response:
“Mrs Smith, unless you’re intending to sell in the immediate future, there is no point in my doing that for you. The market can change very quickly and my appraisal will become meaningless in a very short time.”
Instead, offer to drop by the vendor’s house with some information on sales in the area and a Pre-listing Kit.
If you find that, after the first contact and the first visit, you are obliged to do an appraisal for a person who is not selling in the foreseeable future, do not spend a lot of time on it.
Discussing commission
It is also common for vendors to try to find out your commission rate during the first contact.
Avoid the trap of discussing your commission before you make a presentation. You run the risk of being judged on the basis of your commission by a vendor who has no idea of the level of service you offer for it.
Suggested response:
“I’d be happy to discuss that with you a little later. But first, I’d like to take a look at your home, do my homework on recent sales in your area, put together a market plan that suits your circumstances and go through it with you in a presentation. There are a lot of variables we need to look at first. So if you don’t mind, I will include the selling fees in the presentation I do for you to make sure it is the most appropriate rate for what we decide to do. At that time, we can discuss commission. You will know then what service I offer you for my commission. Is that loop with you?”
Nine times out of ten, the answer will be yes.
Discussing an exclusive listing
Vendors may come right out and state that they are not prepared to give you an exclusive listing. They may say, for example: “You don’t want this for 90 days do you? Because we are not giving you an exclusive!”
This is not the time to discuss the issue of exclusive listings. Vendors often do not know what an exclusive listing can mean for the marketing of their home and how it can advantage them. In a presentation, you can explain these issues and the vendor can make an informed decision.
Suggested response:
“With respect, I don’t know how I am going to suggest you market your home. First, I’d like to have a look at it. Then I’d like to go to the office and do some work on the best marketing opportunities we have. After that, I would like to visit you and explain what I think is the best opportunity for you. At that point, we can discuss the issue of exclusive listings.”
Once you have explained what you propose to do, most people will be happy to go along with it.
Giving the vendor too much information
The last pitfall is one we create ourselves. This is the pitfall of rushing into giving vendors heaps of information before we know what they want and need. This is plain-old product peddling. Don’t tell them anything they don’t yet need to know! Take it slowly, and go one step at a time. You cannot suggest strategies for situations you don’t have the facts for.
Role Play Exercise:
In this exercise you will need to find a partner for this excercise.
In this exercise, you will role play the first contact again.
This time, The vendor will use one of the pitfalls above. The link below has a document with the scripts above to help with this role play.
DOWNLOAD >>> First Contact Pitfalls Script
The Listing System and the first enquiry or contact with a prospective vendor
Listen to audio
Further information on this session:
We have already learned that listings are the key to real financial success in this business.
There are two primary things you must do if you want to achieve long term success.
1. Take the number of listings you need to reach your financial goal.
2. Make certain the listings you take are good listings.
If you study your market, the sales patterns, the average sale price and average sale time, you can work out the approximate number of listings you need to carry each month to reach the annual income you want to make. Just as important as the number of listings, is the quality of the listings. The number of listings you have is irrelevant unless they are saleable listings. Overpriced homes or homes with unmotivated vendors are not good listings.
All business is not good business!
Objectives & strategy
A necessary element in using Consultative Selling successfully is knowing exactly what you want to do and how you are going to do it before you have any contact with a client. In other words, you need to clearly understand your objective and follow a set plan or strategy.
There is a well designed structure to “C.S.” listing and it not only allows you to take the listings you need but goes a long way toward insuring that those listings are good listings.
Staying on track
It is very important that you follow this system in the order we present it. It has been designed to maximize the consultative approach and follows the universal sales process.
Just as you saw in the sales pyramid, each part of the listing system lays the foundation for the next and the sale or listing in this case occurs naturally as a result.
Avoid getting sidetracked or moving into an area too soon. For example, it is not uncommon for Vendors to start out asking only for an appraisal or questioning your commission rate.
As you will see both of these items should be handled later in the system, certainly not during the first contact.
You must keep the order of your strategy and your objective clearly in your mind. If a client wishes to discuss something that will change that order, you ask to delay the discussion until later when you have all the information you need to do it justice.
Special circumstances
In almost all cases this listing programme should be done in the four steps indicated. On rare occasions, such as long distances to a vendor’s home or some sort of urgency it is possible to combine steps or do it all in one.
If you need to do this, it requires considerably more preparation since you need to take everything with you to complete all of the parts of the system and allow enough time to do everything whilst you are there.
Objective
Appointment for a home visit
Strategy
1. Thank you
2. Direction statement
3. Open questions
4. Determine decision makers
5. Price expectation
6. Competition
7. Secure appointment for home visit.
8. Direction statement
The strategy during this first contact with a client is designed to get you the information you need for the second segment of the listing system…and it sets the foundation for the consultative method of working with a client.
1. Thank you:
All too many people forget this simple courtesy. The fact is, it sets the tone for the rest of the conversation and it is important.
2. Direction Statement:
As you now know, a direction statement tells your client what is going to happen, what you intend to do and asks for their permission to proceed. It keeps them informed and moving with you through the process.
3. Open Questions:
Although most of the open questions will be asked during the first visit, you do need to ask a few in this first contact so you have some basic understanding of the client and their situation.
4. Determine decision makers & availability:
This is really only common sense but often not done. In our programme it is particularly important because you will need information from everyone directly involved in selling the home.
5. Price:
Many vendors have a price in mind before they contact a real estate agent and it is helpful to know what their expectations are. The purpose here is not to use the information as a basis of setting a price but to help you manage the emotional difference (if any) between the vendors expectations and the real market value. It simply gives you an idea of how much work you may need to do later in the pricing segment.
6. Competition:
Determine if there is any.
7. Secure Appointment for home visit:
This is your primary objective.
8. Direction Statement:
Again, this is simply to let the client know what is going to happen next and get their permission to proceed.
Script for a typical phone enquiry from a prospective vendor.
Most of the actual words you see are suitable for most first contact situations.
Thank you:
Now, first I would like to thank you for calling us about your home. Before we get started, may I have the address of the home and your phone number.
Direction Statement:
May I just tell you what I would like to happen. I’d like to get just a little information from you now, and then make an appointment to come out and have a look at your home. At the same time, I’d like to find out more about just what you want to achieve, so I am able to help you
100%. Is that O.K. With you?
Open Questions:
May I ask you why you are thinking of selling?
Have you just decided to put it on the market or do you already have it listed?
Do you have a partner or is there someone else who will be involved in the sale?
Availability of all Decision Makers:
If I came by at say 5:30 this afternoon, would that be convenient and would (both/all) of you be available to meet with me?
Price:
By the way, if I get a chance before I come out, I’d like to start identifying some comparable homes from our computer. I wonder if you could help me by giving me a brief description of the home and an indiction of what you think your home is worth.
Competition:
Tell me, are you presently working with anyone else at the moment? Any other agents, I mean.
Secure Appointment & Direction Statement
Thank you.
We’re all set then for 5:30 this afternoon? Great. As I mentioned earlier, I’d like to take a good look at your home and have enough time to talk to you both about your plans…It may take up to an hour or so and I would really appreciate it if you would set that time aside for me. Is that O.K. With you? I am looking forward to meeting you.