In this video, we’ll discuss the difference between approaching real estate from a Transactional, vs. a Relational Approach, explore why many agents struggle to prospect for leads, and hopefully help you consider a better strategy to build your real estate business.

Although a lot of agents would prefer to think otherwise, real estate sales is a sales position. Unlike many sales roles though, we get to sell the best product available in the market (and no, I’m not talking about houses)…The product agents sell is really… themselves. Their unique value, their marketing capabilities, their skill sets, connections, market expertise, and even their availability. I’ve always said that what I love about real estate sales is that I get to sell a product I truly believe in, because I know with full confidence that I’ll always go the extra mile for my clients.

Unfortunately, for many agents getting into the business, the word “sales” is a four-letter word. And for good reason. When many of us think of sales we imagine a pushy or overbearing car salesman, or a door to door salesperson using annoying scripts and tactics to pin us down and make us buy stuff we don’t really want. We’ve all experienced that feeling on a used car lot where we just want space to look without being pinned down, or when we get that phone call we weren’t expecting and don’t know how to politely say no without having to just hang up. This negative reaction towards the idea of sales is a product of Transactional sales tactics that we all naturally want to steer away from because we don’t like how they make us feel on either end of the transaction. Unfortunately, this Transactional approach is extremely prevalent in the real estate world. But we would like to help you imagine a better approach to this business by rethinking the Transactional Approach and stepping into what we refer to as a Relational Approach to real estate.

TRANSACTIONAL APPROACH

Let’s first take a look at how the Transactional Approach manifests itself in real estate sales.

It all starts with a large group of agents and brokers who start their day with the idea that the market is comprised of a limited set of buyers, lots of competing agents, and a need to do everything in their power to capture buyer and seller leads. Many of them have very little value differentiation from any other agents in the market, so it is imperative to get clients locked down into a contract before anyone else can in order to make sure the bills are paid. We call this a Scarcity Mindset.

These agents are taught to focus on lead generation to keep sales in their pipeline, and as a natural result tend to view people they encounter, whether at open houses, their sphere of influence, or even online leads) as potential buyers or sellers. It’s like a big dollar sign appears above their person head agents go into sales mode. The person becomes a lead or a “consumer”. The agent is then taught sales scripts by their brokerage, and a variety of tactics to capture the person’s information and attempt to win their business. “So…are you currently working with an agent?”…“Can I show you homes?”…or “Please sign in on this sheet”. Essentially all of these are various ways to say “Please buy my product”.

Now, none of these are implicitly bad things, but the natural result is that the person being solicited feels like they are being sold something, much like anyone feels when they walk onto a used car lot or many retail environments. We all know this feeling, but as an industry, we seem to forget how these strategies make us feel, when applying them to our own sales processes.

Inevitably, if the person (or lead) doesn’t turn into a client, agents feel that their efforts were unsuccessful and move on to another consumer/lead. This transactional approach is a “Short Game”, and agents operating this way generally don’t enjoy prospecting because they are engaging in activities they wouldn’t want directed at them if they were on the other side of the conversation. No one wants a call in the evening from an old college friend who we haven’t seen in a decade asking us if we want to buy insurance, or a house. 

RELATIONAL APPROACH

But there’s an alternative, more relational way to engage buyers and sellers that we refer to as the Relational Approach.

This starts with a different vantage point, one where we view the market as the market as abounding in opportunity for anyone willing to provide real value to buyers and sellers looking to make a move. We have a saying inside our organization, “All opportunity lies on the other side of value creation.” If we can create value for people, there is no shortage of good people looking for great service from excellent agents. We call this an “abundance mindset”.

A relational approach still acknowledges that success in real estate means we need to be in the business of generating leads, but it also recognizes every individual we encounter (whether at an open house, someone in your sphere of influence, or even an online inquiry) is connected to hundreds, if not thousands of other people in a highly social and interconnected society. From this viewpoint, the person we are meeting is a customer, with hopes and dreams, fears, and personal needs and wants. They are first and foremost a person. And we understand that if we can provide value to these individuals by providing a remarkable client experience and focusing on the relationship…before the transaction, that people will gladly do business with us (when the time is right) or pass our services along to the many people they know.

There are two foundational truths we understand about people, especially when making big purchasing decisions.

When you come across something terrific (think of an excellent meal at a restaurant, or a great movie), we naturally want to share it with friends and family. We can’t wait to tell people about good things. And we don’t need to be paid to do so. We do it because we love to share things that bring us all value.
And secondly, when we are in need of a high stakes service (like a babysitter, financial advisor, or even a new hair stylist), we don’t go to the yellow pages. We ask friends and family for recommendations to people they trust. People refer organically! Its part of how we operate as a society.

So when we go about the real estate business from a relational approach, we really shift our focus from trying to sell houses to buyers and get listing contracts from sellers, and instead try to find solutions for people looking to make a move. And even more, we look to create value for our database of friends, family and acquaintances, regardless of whether they are in the market for our services, because we know that when they come across someone who does have a need, our value-first-approach will make them happy to refer us to their friends and family as someone they can trust to put their interests first.

The relational approach really is a “Long Game.” Agents operating in this way have confidence in their marketing and sales because they know they are truly working to provide value to our clients, and to the public as a whole, whether people choose to buy or sell with us or not.

The relational approach is a mindset to embrace regardless of which agent archetype you fall into, and regardless of your preferred sources of leads. Everyone wins when great agents put people before sales, value before solicitation, and relationships before transactions.

So, as you enter the real estate business, and are exposed to a variety of training materials and lead generation strategies, we want to encourage you to mentally audit every single one of them with a simple set of questions. Is what I am being taught to do, something that first and foremost actually provides value to whomever you are engaging? Is this strategy, script, or approach something that makes the customer FEEL valued and cared for, or does it make them feel that they are being sold something? And most importantly, if someone approached you with this strategy, how would it appeal to you?

It’s really quite simple. As humans, we all want to be valued as people, rather than as consumers. We all want to know the people serving us actually care about us more than they do about a sale. And if we can accomplish this in the world of real estate sales, we always win. Thanks for listening.