The One Factor
Apr 05, 2011
In sales there are three players: The buyer, the seller and the salesperson who brings the buyer and seller together. All three players each care about the completion of the sale and what they get as a result of that sale. To each player, it is not about either of the other two players in the deal, it's about what I got in the sale. I call this the 'one factor'.
The 'one factor' or better known as 'what's in it for me?' is not often times easy to see or understand in each of the parties involved. The seller may be holding to a certain price that is out of market, but because they have to achieve that sales price for a variety of reasons unrelated to its true value in the market place, they won't budge. The buyer may have a price in mind for an item or service that he would like but isn't necessary and will only buy if it is a screaming deal. The salesperson that is in the middle is the one player in the transaction that neither the buyer nor seller cares about even though they should because they are the conduits to making a deal happen. The salesperson is also thinking of himself and evaluating whether is it worth his time pursuing putting two parties together to see if they can actually make a sale. At the end of the day, everyone in the 'one factor' is looking out for his or her best interests but in order to succeed must offer something in return that benefits the other two parties or a deal will not be made.
The 'one factor' is nothing new. It is sales 101, the base of any transaction. Yet what percentage of business that you go after actually closes? As a salesperson do you close more than 50% of what you go after? 75% or 100% is probably highly unlikely as well. If you are not closing at least 50% of what you are going after, what is the problem?
The problem rests in the understanding and the motivation of each of the two parties you are seeking to do business with. Without learning ahead of time the motivation and understanding of each of the parties, and more importantly, if there is any sense of urgency that the product or service you are selling is needed at this time, you will be wasting your time and continue to close less business than you should.
In real estate, how many times have you heard agents get excited because someone told them that they are looking for property in a specific price range and don't have a location preference? Agents are already in the 'one factor' counting their possible commissions on the sale and have most likely begun going down the road that they will work with them without ever seeking to learn about the buyer's sense of urgency, their motivation or their ability to close a transaction. Experienced agents will say, "Yes, but that only happens to the inexperienced agents." This is not true as I see it happen everyday and have fallen into that trap myself on more than one occasion.
The keys to succeeding in the 'one factor' are to learn the following from both the seller and the buyer:
1) What is their motivation?
2) Is there a sense of urgency?
3) Are they committed to working with you and the other parties?
4) What are the guidelines that will lead to a successful close?
5) Is each party the actual decision maker?
6) Do they have the ability to actually close a transaction? In other words, do they have the money now?
There are plenty of other questions to ask prior to getting yourself involved in a new sales transaction, but if you don't have clear answers to the above you are probably looking at closing far less than 50% of sales you are going after in the 'one factor'.
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Written by: Hans Hansson
Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 26 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, http://www.commercialspacefinder.com/.