By Aiman Attar
It might seem confusing that as a recruiter, I would be advising my clients and prospects not to hire an inside sales agent (ISA), when my job is to help brokerages and teams with all their real estate recruitment needs. But that’s exactly what I have been doing in the past few months.
An ISA is supposed to be a licensed, experienced sales representative that sits behind a desk calling prospects and following up on inquiries. However, most real estate teams are employing unlicensed candidates with zero sales or real estate experience, giving them robotic scripts and then having them sit eight hours a day smiling and dialing.
There was a point when I believed that an ISA position could add value to a real estate team but not with the current business models I have seen. I recently interviewed ISAs, top-performing teams and a business coach to see if this position is even worth keeping on an org chart.
To my surprise, I have yet to speak with a real estate team or ISA that has found success in this investment. Most teams that I’ve spoken to had little data collected on whether or not the ISA calls generated any real leads and couldn’t pinpoint if the ISA’s initiatives made a dent on their bottom line. Most ISAs, especially those not on a base salary, quickly realized this model is set up for failure because it takes over six months of consistent calling, door knocking, advertising and brand presence before the leads blossom into measurable sales. No one on a commission-only structure could survive that long without pay.
Here’s the skinny on the ISA formula and why it’s not working.
Most teams are paying approximately $40,000 a year as the base salary, plus bonuses on any booked appointments that turn into sales. That bonus can range anywhere between $500 per sale to 10 per cent of the GCI. There are some teams who pay commission only to their ISAs but no one lasts beyond 90 days without income, so most of these teams have a revolving door for this position with almost no results.
The teams that pay a base salary keep the ISAs marginally happy as they are still earning a pay cheque for the time they invest. The team keeps the illusion of “we have an ISA who generates leads” that helps them in attracting other salespeople to join their team but when it comes down to it, the numbers don’t lie.
An experienced real estate sales agent, who decided to become an ISA who worked at it for six months, said, “This model doesn’t work in Canada. In the U.S.A., yes, but not in Canada. I door knocked the neighbourhoods I was going to call, then when I called them, they would recognize that I was the same person. But despite the established team I represented and despite the constant keep in touch and follow up, and despite all the great interest they showed, we didn’t close any deals in six months.”
Some teams have their ISAs on a smile and dial automated dialer where they are just calling random homeowners to see if they have any interest in buying or selling, based on a database they might have purchased. This is a complete cold call, which most homeowners not only dislike and find intrusive. Very few actually show interest in ever talking to the team lead.
Is there a business model formula that generates real leads and real money from the ISA position?
The ISA is only as good as your database. You can’t expect to purchase 1,000 internet leads, which are extremely cold and vague leads, and have your ISA call 1,000 people with only a 0.2 per cent success rate. Salespeople thrive on the high of getting a yes!
The other major issue with the ISA position is that it is extremely repetitive and most complain of boredom and frustration, which is why they quit.
Now, I’m not suggesting throwing out the baby with the bath. There is some merit to having a dedicated ISA that handles all sign calls, web inquiries and cold calls. Once upon a time, these were the tasks that the lead Realtor did himself/herself, which later got passed on to the buyer agent and now we have removed it from the outside sales team and given it to an inside rep who’s on salary.
The question remains, how do you generate leads and who should be handling these leads?
I recently spoke with business coach and profit consultant Jennifer Jimbere at Jimbere Coaching and Consulting about the ISA position and she agreed that smiling and dialing, with a six-month lead conversion rate, is not the fastest or most productive way to grow your business. Instead, she recommended that the team have a business support manager.
First, you need to build a market-dominating strategy. Then have a dedicated person on your team who handles inquiries, sends direct messages on LinkedIn, handles follow-up calls and manages your database and new lead generation. Taking a holistic approach of sales and attraction marketing and not from mere cold calling would be a more productive and profitable approach. Simple tips and tricks with how to leverage LinkedIn will have incredible effects on growing your pipeline.
Hiring an “inside sales and marketing coordinator” or a “business support manager” might be the best option. Someone who is great at building relationships and rapport with clients. Someone who understands sales and conversion. Someone with social media savviness so they can engage inquiries online, funnel inquires through the sales process and someone who can creativity create marketing initiatives that generate more leads. This position would have a variety of tasks that not only keep the employee challenged and excited, but it would open up several lead generation tactics (not just cold calling).
Do you think the ISA business model is successful in Canada? If yes, I’d love to hear from you.