How to Charge Higher Commissions in Real Estate is a critical skill for real estate agents to defend against all of the efforts working to lower real estate agent commissions.
What if you were able to offer and demonstrate, time after time, an return on investment, or ROI, on the fees that you charge?
It would make your competitors, both traditional and technology disruptors, totally irrelevant. In this video,
I walk you through exactly how to do that.
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What’s up everybody, Justin Stoddart here and I’m super excited about today’s episode.
You know, in the real estate industry, we are very comfortable discussing ROI when it comes to real estate properties.
But are we comfortable discussing ROI when it comes to our fees?
“What you exclaim? But doesn’t sound reasonable.”
But imagine if it were Imagine if you could help your clients get a positive ROI on all of your fees, your fee, and your competition, including big tech disruptors, would be irrelevant.
In today’s episode, I’m going to teach you exactly how to go about doing this.
But before I do, let me remind you that I am pouring a ton of resources and value into this channel to help you rise above industry disruption, creating a successful business and a significant life. So smash that like button, hit the subscribe button, and then hit that little bell notification so that you get notified every time I drop a new video.
More than ever before, we in our respective well paid service-based industries must recognize and accept that traditional provider like us are no longer entitled to the client, we must find additional ways to boost our respective value propositions, so that our clients and prospective clients see themselves as being best served by having us well paid and at the center of the transaction.
So here are some additional tactical ways to think and communicate this value. So the first one we’re going to talk about is identifying return on investment or ROI.
Similar to the risk-reward ratio that we discussed previously, you must begin to consider the fees that you charge not just as payment for services rendered. Instead, you and your clients need to see those fees as an investment that earns the client a positive return.
Now, I want you to think about that for a minute. If you had an investment in which you put in, let’s say $1 and got out $1 50, or even $2, would you hesitate at all to invest that $1? Now the obvious answer is I would not hesitate at all right, of course.
Now with technology increasing both the quantity and the quality of lower-priced options around us your chance as a professional for remaining at the center of the transaction becomes secure as you can provide, document and communicate this positive return.
Now you may be thinking right now, Justin, it is not always possible to demonstrate a positive ROI on the fees that I charge. And my rebuttal is that if the only identifiable and documentable value that you bring to the table is within the parameters of the transaction, then you will continue to struggle with this.
The amount of value that you bring to a client must extend well beyond the parameters of the sale both before and after. I would even argue that the benefit of using You should also extend beyond the confines of your profession and your industry.
What if you were to make regular and intentional introductions, for example, recommendations referrals to your clients, then allow them to either grow their businesses get a promotion within their respective job and or obtain tax legal or business advice.
This saves them 10s of 1000s, even hundreds of 1000s of dollars. In so doing your fee just produced a massive positive ROI. With the examples mentioned above in mind, I strongly encourage you to consider ways in which you are already adding significant value to your clients, as well as additional ways you could add value in the future. Now
Additionally, I then invite you to begin to make this part of your ongoing value offering and client presentation. The more that you start to standardize, and even systematize. The regular addition and communication of this elevated level of value, the more your value will absolutely dwarf that of disruptive technology. Now let’s talk about communicating ROI.
I want to emphasize the importance of communicating this value. It is not enough to have your value far outweigh our fees if the client doesn’t see it or understand it. Now you remember the philosophical question? if a tree falls in the forest, but there is no one around to hear it, does it even make a sound?
Now in this analogy, the sound that comes from a falling tree is your value. And if you don’t communicate your unique value, much of it will go unnoticed. And then there will be a question as to if it exists at all. In very natural ways. You must be helping your clients to understand what is happening in the transaction and the value that your expertise brings to the table.
Great professionals have the habits, systems and processes to reach out to a client at systematic and predetermined times. During the transaction to communicate in a natural human a genuine way to let the client know two things, what just happened in the client’s transaction and what’s coming next.
Now, although a few professionals delivered this beneficial information, it’s not going to be enough moving forward, technology firms can quickly write algorithms that do a good job of delivering that same information. And they already have.
You need, therefore, to go beyond the practice of just keeping your clients informed, reiterating, as often as makes sense, the conversations that highlight the return, that your unique and highly valuable expertise brings will take your value in the eyes of your client to a new level.
So here are some suggestions. Okay, the first one is this:
Here’s what just happened in your transaction. Okay. Now, the common or typical thing to do here would have been to do X. Instead, we did, why not, because I wanted to better position you to avoid these threats, specify what those threats are, and take advantage of these opportunities.
And then you’ll specify what those opportunities are, which equate to this value, and then you specify what the value is to them.
So here’s the second idea, when it comes time to tell people what’s coming next in the transaction, you would say something like this, hey, in this situation, a common thing to do here in our industry is to do this and you specify what it is that’s common to do, instead, to avoid the threat or risk of this.
And to take advantage of the following opportunities. These, I would recommend, instead, we take these steps. Okay, so by doing these points, number one, point number two, you’re not only communicating what’s happened and what’s coming next. But you’re also giving very specific examples of how your value is different than the status quo.
When we’re able to communicate this value to our clients, it takes our value to an entirely new level. Now, surely, you wouldn’t do this every time you communicate. But as often as seems natural and genuine, you’ll be able again, to let people know what’s common and what you do.
Now while doing this, every time you communicate with your clients is absolutely going to be overkill. implementing this pattern in natural and genuine ways as often as you feel makes sense to the client will do several things for you.
Okay, number one, it’s going to cause you to think in terms of creating uncommon levels of value.
Number two, it’s going to create accountability to serve your clients at a level that your competition doesn’t even know exists.
Number three, it’s going to make a clear distinction between you and the typical professional, even between you and what technology algorithms can offer.
Number four, it’s going to create a clear difference in the minds of your clients and prospective clients of the value that you bring.
Now, when so doing again, you’re not just setting yourself apart from other professionals, you are also demonstrating that your value far outweighs your fees, a positive ROI, which is an even higher level of communication. You’re showing that although there are other options and other providers, you are the only option that can lead to the best possible outcome.
Additionally, your fees are no longer shoppable. To tech disruptors, you’re not like anybody else, so they can’t duplicate your efforts with an algorithm. And it’s also not duplicatable, from others, because the value that you bring is so much higher than what the alternatives are offering.
You’ve systematically illustrated and communicated the value to your clients.
Now, if you found value here in this episode, then you’re going to love the content of my new book, The Upstream Model, I would encourage you to get your copy. Now seriously, I’m offering it to you at lower than my cost to get it to you.
Links to the book and to the digital course in group coaching. That will walk you through exactly how to apply these concepts and so many more are in the notes below.
And remember, Go Think Bigger!