SPECIAL PROMOTIONAL FEATURE
TRAINING
Why most real estate teams fail The success rate for real estate agents trying to build a team is dismal. Kathleen Black, one of North America’s top experts on team-building, explores three mistakes agents commonly make and how to plot a better course
AFTER COACHING hundreds of real estate teams since 2009, I am a believer in the power of team environments. What I mean by that is when a new member joins the team, their success has more to do with the team environment than the member herself. I’ve found three key difficulties facing both team leaders and the team overall: compensation, training and recruitment. Each issue can cause significant pain for an inexperienced team leader, but there’s no reason any of them should derail a team completely. Every problem has a solution.
1
Compensation structure
After making the transition from salesperson on a top-producing team to elite coach, I was quickly able to pinpoint the first and most prominent mistake made by team leaders: compensation structure. I see a lot of team leaders not setting themselves up to be compensated for their new role. A lack of compensation for that role creates
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a broken equation where the team leader returns their focus to sales instead of working to grow their team and nurture the people they’ve hired. I like to emphasize the need for a connection between building the business
that it is always targeted toward the goal of where the team will be in the future, instead of where the team is currently. Ten years down the road, the team will not be composed of the team leader and one team member, so capping at a 50/50 split is extremely restrictive. I always recommend taking into account the long-term vision; if your team will have a lead-conversion partner, a licensed assistant and a manager, prepare for that from the beginning. Also account for a team’s expenses, such as marketing, overhead and any additional costs the team carries. This way the team has the resources to continue its growth. It’s shocking for some to discover that a big team is not necessarily a profitable team. Sometimes the lack of profit surprises even the team leader. Our advice is always to reverse-engineer your economic model. Often team leaders discuss profit margins without considering that they’re counting their full personal gross commission as profit. What you are paid to lead, to manage or to sell is not profit. In fact, the more you personally do in your business, the less the business is worth to sell to anyone else in the future and the harder it will be for you to achieve residual
The reality is that a team without profit isn’t healthy for anyone involved. A healthy business operates to the advantage of all team members and being compensated for the role of team leader. It’s essential for a team leader to see the value in being the leader and to recognize the need to compensate themselves accordingly. In determining what works best for compensation structure, I stand by the idea of compensating for your value and what you bring to your team, as well as considering the future of the team. When coaching clients, we evaluate every influencing factor, but what makes the custom structure so effective is
income. The reality is that a team without profit isn’t healthy for anyone involved. A healthy business operates to the advantage of all team members.
2
Training
The second difficulty that team leaders face when building a team is training. A top producer doesn’t necessarily make a top trainer. I identified with that personally when I first made the change to being a coach. I