Think Like a Farmer

I watched the following video by BNN where they interview Aron Cadeau, president, FlatFeeRealty.ca. I found it very interesting and thought provoking. Check it out here

The major point that does not stick with me was the answer to the question: how does Flat Fee Realty makes its money? Or, how does it afford to advertise like the other competing brokerages? The answer: volume.

What's wrong with this picture?

Personally, in the true spirit of Jerry Maguire, I think less clients and more personal attention is important in this business. A Realtor who earns a flat fee may focus their efforts on completing a transaction so they are free to move on to the next customer. As Brian Buffini would put it, they are interested in winning the battle but may lose the war. That is to say, they are interested in closing the deal, but may lose the client in the long run. In a transaction based business, closing deals (and earning a pay cheque) becomes the most important goal.

In relationship based business, or a referral business, the focus is shifted to personal attention and doing the best job possible for your clients. Even if a transaction doesn't complete, a relationship is cultivated. Who doesn't want to recommend a professional who has done an outstanding job for them? The goal is not to get transactions over the short run, but to build relationships and plant seeds for the long run. Think like a farmer.

Cadeau says their average Realtor in his company closes 30 deals per year compared to the average which is around 8. Although it would be nice to close 30 deals in a year, I would rather have fewer high quality experiences with my clients to ensure the continued growth of my business in the long run.

On another note, maybe I'm biased because I'm in the real estate industry, but I find it weird when an organization of professionals advertises themselves as being cheaper than the industry average. Would you go to a Lawyer or a Doctor who advertises themselves as being cheaper than the rest?