Just a brief note to let you know I’ll be on vacation until heading out to RE Blog World on Thursday. So posting will be light or non-existent. It’s hard to find the Internet up here in the mountains. 🙂
Just a brief note to let you know I’ll be on vacation until heading out to RE Blog World on Thursday. So posting will be light or non-existent. It’s hard to find the Internet up here in the mountains. 🙂
I’ve referenced David Ogilvy, the founder of Ogilvy & Mather, a number of times. His book, Confessions of an Advertising Man, is one of the wittiest and yet most influential books I have read. I recently ran across a webpage of “Ogilvyisms” — sayings and quotes from David Ogilvy — that I found absolutely fascinating. So much of what he writes about the advertising business can and should apply directly to real estate. Here are my selections:
Don’t bunt. Aim out of the ball park. Aim for the company of immortals.
A lot of today’s campaigns are based on optimum positioning but are totally ineffective – because they are dull, or badly constructed, or ineptly written. If nobody reads your advertisement or looks at your commercial, it doesn’t do you much good to have the right positioning.
Most readers look at the photograph first. If you put it in the middle of the page, the reader will start by looking in the middle. Then her eye must go up to read the headline; this doesn’t work, because people have a habit of scanning downwards. However, suppose a few readers do read the headline after seeing the photograph below it. After that, you require them to jump down past the photograph which they have already seen. Not bloody likely.
No sale, no commission. No commission, no eat. That made an impression on me.
We exist to build the business of our clients. The recommendations we make to them should be the recommendations we would make if we owned their companies, without regard to our own short-term interest,” he said. “This earns their respect, which is the greatest asset we can have.
You wouldn’t tell lies to your own wife. Don’t tell them to mine.
We prefer the discipline of knowledge to the anarchy of ignorance. We pursue knowledge the way a pig pursues truffles.
Great hospitals do two things. They look after patients, and they teach young doctors. We look after clients, and we teach young advertising people.
If we hire people who are smaller than we are, we will become a company of dwarfs. If we hire people who are larger than we are, we’ll become a company of giants.
The top man has one principle responsibility – to provide an atmosphere in which creative mavericks can do useful work.
Set exorbitant standards, and give your people hell when they don’t live up to them. There is nothing so demoralizing as a boss who tolerates second rate work.
I can’t stand callow amateurs who aren’t sufficiently interested in the craft of advertising to assume the posture of students.
Training should not be confined to trainees. It should be a continuous process, and should include the entire professional staff of the agency. The more our people learn, the more useful they can be to our clients.
We like people who are honest. Honest in argument, honest with clients, honest with suppliers, honest with the company — and above all, honest with consumers.
Advertising is a business of words, but advertising agencies are infested with men and women who cannot write. They are as helpless as deaf mutes on the stage of the Metropolitan Opera.
It is the inescapable duty of management to fire incompetent people.
The best ideas come as jokes. Make your thinking as funny as possible.
The more informative your advertising, the more persuasive it will be.
Advertising is a business of words, but advertising agencies are infested with men and women who cannot write. They cannot write advertisements, and they cannot write plans. They are helpless as deaf mutes on the stage of the Metropolitan Opera.
The more prospects you talk to, the more sales you expose yourself to, the more orders you will get. But never mistake quantity of calls for quality of sales-manship.
Always hold your sales meetings in rooms too small for the audience, even if it means holding them in the WC. ‘Standing room only’ creates an atmosphere of success, as in theatres and restaurants, while a half-empty auditorium smells of failure.
I don’t know about you, but these words are like Mentos thrown into the Diet Coke of my brain.
I thought Glenn Kelman’s latest post on Yammer was a treat — it’s rare for those of us in the management ranks to get management insights and thoughts from a CEO that aren’t prepackaged and heavily worked over by a legion of editors. The post is ostensibly about Yammer, the new corporate Twitter, but it’s really about how to manage people to be productive:
While I am glad to try a new technology — Dan is such a fearless pioneer — I worry that Yammer might be worse than work, and worse even than no-work. At least when you’re browsing ESPN.com, you feel bad about it. Yammer happens at work, and it sounds like work — you can always tell when someone is writing an email, IM or Twitter, because their typing is so much faster and noisier — so people think it is work, with one crucial exception: it may not get work done.
I’m not sure I buy the talk about collaboration. I’ve seen passive-aggressive arguments happen over email and (less over) IM — Skype’s workrooms are the exception; they’re awesome — that could have been avoided or settled in a few minutes face to face; will Yammer be much different?
As it is, I have elaborate fantasies about outlawing the whole Internet for hours at a time, or even for an entire workday. When I marvel at how a historical colossus like Theodore Roosevelt (definitive naval history of 1812, four-volume history of American frontier, a staggering number of slaughtered animals, U.S. President) or Honore de Balzac (dozens of coffee-fueled novels, written from midnight – 3 in the afternoon, while standing up) had time to accomplish so much, I usually attribute it to talent, servants — and no Internet.
I have to struggle with this issue as well, on a daily basis. Especially when overseeing the corporate blog is part of my responsibility, and a task for my team. The product management team has to be on the Internet constantly, looking at developments, reading blogs, interacting with people both inside and outside the company. And now, we’re in week two of the NFL season, which means fantasy football will undoubtedly eat into my productivity (and my team’s productivity).
Thinking about Yammer, about Twitter, about blogs, about all these “is it work?” type of tools reminds me of David Ogilvy, who built Ogilvy & Mather into an advertising giant. One of his observations has to do with brilliant creative people:
There are very few men of genius in advertising agencies. But we need all we can find. Almost without exception they are disagreeable. Don’t destroy them. They lay golden eggs.
He writes about how he always thought better and more creatively after a few drinks. He talks about how he has to coddle the borderline-unstable personalities of his best copywriters, because they are the ones that produce the best work.
I think managing people is by far the most difficult thing that any person can do. I have enormous respect for great managers, whether they be Jack Welch or David Petraeus. It is so difficult. But there appears to be a common thread among the great managers: insistence on results.
That’s the nature of business, at the end of the day. It is what makes business fun: you have winners and losers, and a scoreboard. Is Yammer going to destroy productivity? Perhaps. But then the work of your people will reflect that destroyed productivity. Are my people wasting too much time on the Internet? Then they will not be able to deliver what I expect.
In my management philosophy, I find that I am more and more going with the following approach:
Do whatever you want, whenever you want, however you want — but I don’t want to hear any goddamn excuses.
I’m not all that great at enforcing this, but I’m getting better. If you need to take a day off, take it. If you need to leave early, leave early. Come in at noon, that’s fine with me. Spend half the day playing video games? That’s okay too. But miss a deadline, or fail to deliver results, and it’s your ass. I am not interested in excuses. At all.
I have never seen an excuse raise revenues by a dollar, or cut costs by a penny. Never. I have never seen excuses get a product to market. I have never seen competitors willing to wait on us because we have a great excuse why we didn’t do what we needed to do.
I suspect that at the end of the day, this is the key to productivity: the absolute unwillingness to entertain excuses coupled with freedom to let people be productive in their own way. Some people concentrate for an hour, but then need to take a breather. Others need to maintain a low-level focus for the whole day. Still others might need to get stinking drunk to be creative. Each individual is different.
What remains the same are results.
So my unsolicited, probably horrid, advice to Glenn is to let people Yammer away, check ESPN, play fantasy football, do whatever it is they gotta do. But never, ever accept an excuse for failure. Ever. I think the unproductive people will hang themselves on the rope provided, while others will make lassos out of the rope and bring in more business.
At the recent RISMedia Leadership conference, I walked around listening to the conversation, attending the sessions, and talking to people. Not suprisingly, the market was very much on people’s minds, and a number of people were talking about pressure on commissions.
That pressure is nothing new, of course. Discount brokerages have come and gone and stayed and come again. Rebate models are everywhere on the Web.
In that context, however, I thought it relevant to at least think about this article from MarketingProfs.com:
If your business has experienced a drop in traffic or sales, you may be considering offering discounts to your customers. Sales. Discounts. Markdowns. Perhaps even “Markdown Madness”…?
Offering items at a sale price is a very tempting tactic. In the short term, it drives traffic and sales. What you lose in margin is made up in volume. Problem solved, right?!
Bigger problem, created. What you’re really doing is eroding your long-term margins and your long-term sales. (This is especially true if you run a business based on quality and value versus being a low-price provider.)
The problem with discounts is that customers don’t see the price drop the same way you do.
As a business person, you clearly understand you are temporarily cutting into your own profit to give a little more to the customer and keep their business.
As customers we see it different. The moment you discount, it re-calibrates the perceived value of your products/services. Selling something for $200 today, and discounting for $150 tells us you are making more money on the $200 version… And you’re still making money on the $150 version… so the $200 version was over-priced. The new perceived value, $150.
As a consumer buying something, we get this. As a marketer selling something, we tend to ignore this fact.
I urge everyone to read the whole thing. It’s really valuable food for thought.
The question at the heart of the post is whether real estate brokerage today is a ‘business based on quality and value’ or a ‘business based on being a low-price provider’.
My sense is that most of the professionals and leaders in the industry think of real estate as a profession based on quality and value. At the same time, there is this undertow often unspoken (and sometimes spoken) that the brokerage business model is fundamentally broken.
A highly-respected industry executive with a large brokerage flat out told me at the Conference something along the following (paraphrasing bigtime here from memory): “If I sell your house, worth $500K, and collect 3% commission, then I get paid $15,000. If your house is worth $200K, I only get $6,000. Do you really think I did $9,000 worth of additional work to sell your $500K house versus your $200K house? Nobody believes that anymore. Consumers are getting wise to it.”
Because of this, the recommendations from Marketing Profs do not appear to be on point:
First, if customers are complaining about your prices, make sure you actually aren’t charging too much. Compare yourself with your competition. Recession or not, if you were already dramatically out-pricing the competition without a dramatic difference in quality or service, perhaps you should consider lowering your prices. (I’m not recommending getting yourself into the low-price game, just make sure your higher prices offer higher value.)
Second, instead of giving away money, strategically provide add-on services or products. Instead of discounting the price of a hair cut at the salon, give away a bottle of that great shampoo you used that made my head tingle and hair smell so great. Instead of cutting the price of your website building services, offer a complimentary, 6-month, search engine optimization (SEO) service.
Well, in real estate, the “competition” has the same issues you do. So it isn’t at all clear that any one broker is “charging too much”. Furthermore, since the fundamental problem is in explaining percentage-based pricing to consumers, it isn’t clear that the price is “too high” in and of itself.
Furthermore, in a full-service brokerage, it isn’t immediately clear what “add-on” services a broker can provide in lieu of discounts. Home inspections? Lawnmowing services? What?
At the same time, the consumer perception of the value of services is that all realtors are overpaid for the services they provide.
How to get out of this pickle?
I love that Wendy Forsythe, VP of Broker Services for Better Homes and Gardens Real Estate, often blogs on Gen-X and Gen-Y issues in real estate. I suspect that Wendy and I are both Gen-Xers, and if you searched our past photographs, I’m sure there will be a few blackmail-worthy examples involving neon clothing, Z-Cavaricci’s, penny loafers, pastel blazers, Aqua-Net, and The Cure t-shirts.
Her latest post, however, makes us Gen-Xers out to be some sort of emotionally fragile prima donnas:
Professional sports teams have managers and coaches. The reason for this is because these are two different jobs. In most real estate offices, the leader has to wear many hats. If you want to attract and retain Gen X and Gen Y agents you have to wear your coaching hat, not your manager’s hat.
With all due respect to the redoubtable Ms. Forsythe, I’d like to extend the sports analogy a bit more and beat it until it completely collapses under its own weight.
Yes, professional sports teams have both managers and coaches. If you’re going to wear the coaching hat, and do everything positive and shiny, then by golly, make sure someone is wearing the General Manager hat and being a total results-driven hardass.
The coach might be telling some young rookie, “Hey, kid, I believe in your abilities — just get out there, focus on the ball, and swing away. The hits will come.” The GM, however, is like, “Hey you — you hit .220 for the past twenty at-bats. It’s time for you to get sent down to the minors.”
Wendy gives us this as an example of the difference between manager and coach:
Let me add the General Manager’s message:
Look, Gen-Xers are in our 30’s. We’re no business neophytes with stars in our eyes and dreams in our heads. Most of us remain idealistic, perhaps, but I can say with reasonable confidence that the Gen-Xers who have moved on into the real world are hardnosed, experienced businesspeople who know how to get things done. Ain’t no use in whining and crying. When it’s game time, it’s game time. We know that. All the excuses in the world won’t turn that routine flyball into a base-clearing double. We know that too.
I am now in the position of working with the so-called Millenials, who report to me. You know what? I’m finding that the good old fashioned motivation works just fine with this so-called “coddled generation” as well. Sure, have all the freedom and initiative you want — but when it’s game time, it’s produce or else, kiddo. If that don’t make you happy, well, it’s a big wide world; I’m sure there’s a job out there for ya.
Strangely, they all get it. They all respond to such clear, unambiguous direction. I don’t feel like I have to coddle them, or be their therapist.
If anything, I think every employee of whatever generation responds better to clear, unambiguous goals and expectations. There really is not fudging around, “Hit this number to keep your job; hit that number to get promoted.” Just like in sports — there’s no getting around that final score that determines who the winner is and who the loser is. Gen-X’ers, Gen-Y’ers, Millenials, Boomers, Greatest Generation — we all understand it in the end.
The continual Oprahization of our society, including our workplace, is causing confusion amongst the employees. And I write as an employee and as a manager both. Trying so hard to “feel your concerns” and “understand your motivations” and such is actually counterproductive. At the end of the day, business is simple: the money coming in has to be greater than the money going out. This iron law of business has not changed since the day Thag traded his woolly mammoth tusk to Krang for the pretty cowrie shells, and it will not change until the end of time.
And you, as part of an organization, are either helping to have more money coming in or to have less money going out. Simple, isn’t it?
So… yes, by all means, be nice to your people. Be sweet and kind to your employees. They’ll maybe be motivated better and respond. But really, if you’re going to do the coaching thing, encouraging and motivating, then make sure they also see the General Manager thing, that expects, demands results. Or else.
It’ll be good for both of you.
At the risk of revealing the true depths of my ignorance — seeing as how my son is some 15 years away from having to worry about college — I couldn’t help but think about this post on Zillow’s blog:
While the potential gains are tantalizing, there are some major red flags and risks involved with financing your child’s private study environment/animal house. To further tap into this concept, I read up on the Zillow blog about buying a house for college and raised this question on Zillow Discussions yesterday. “Mom & Dad: Should I live in the dorms or will you buy me a house?” Four hours and 45 comments later, I had my answer—-or at least a lot of new opinions.
Do go check out the comments. Most of them tend to emphasize the idea that 18-year olds are simply not responsible enough to be homeowners.
The author concludes, therefore, that dorm life is the answer:
My advice: Parents, make your kids live in the dorms. Dorm life builds character, strengthens your immune system, and is the heart of undergraduate college experience. Parents, college is your time to relax and enjoy an empty nest. Don’t stress yourself out by micromanaging your child’s college experience.
There are two questions that come to mind.
1. Is there some magical responsibility transformation that happens between the age of 18 and 22?
Because the exact same analysis — whether to buy a house for your college student child or to have them live in a dorm — applies to whether you should help your new college graduate buy a place or to have them live in an apartment.
My family was not in a financial position where this was ever an issue, but if it were, I’m not sure that I was somehow far more mature at 22 than I was at 18.
In fact, in retrospect, I think in many ways I was more mature as a sophomore in college than I was my first year on Wall Street: I had less money, fewer distractions, and more homework.
Meanwhile, my wife owned her own little studio condo within 18 months of graduating from college, and her parents helped her with the downpayment. As a 22 year old assistant buyer, making roughly $19K a year, she managed to make mortgage payments every month, determined not to ask Mom and Dad for money for her house. She told me stories about eating nothing but bologna sandwiches for seven months straight, just so she could make the house payments and repay her folks for their down payment loan. Knowing her as I do, I’m not convinced that she couldn’t have done the same as an 18 year old.
I suppose every parent knows their own child, and can make the decision whether he/she is mature enough to handle the responsibility of homeownership. But that leads to…
2. If your child is not mature enough to handle homeownership by 18, is she truly ready to be leaving your roof in the first place?
This may take the discussion a bit away from what I usually talk about on this blog. But it is a real question. College isn’t kindergarten; it isn’t sleepaway camp. One gets exposed to all sorts of things that require judgment and responsibility to handle — alcohol, sex, drugs, even violence, not to mention the actual course of study, and so on.
It seems odd to me to claim that a student isn’t mature enough to make payments, maintain the property, and so on, but is mature enough to make decisions about sexual partners, choice of career, and whether and how much to drink.
Are we, as a society, holding our young people to too low a standard?