Wednesday, April 15, 2009 by Ivor Dickinson
I have worked at Douglas & Gordon for 22 years and been Managing Director for 15 of them. In that time, I have seen good and bad times and, let’s be honest, until 18 months ago we had experienced the best 3 years of all. Throughout that time, the fundamental challenge has been to gain market share. The last 6 months in particular have however presented a completely different challenge – survival.
In order to survive, we are faced with a host of new dilemmas. The kind of decisions that now have to be made are alien to us and inevitably mistakes will be made.
The first and of course burning question is when is the sales market going to return? We all hoped that February and March this year would see the first signs of recovery, and they did. But with the desire to buy comes a new problem - we have very little to sell. So when an agent’s finances are stretched to breaking point – do you keep (or even employ more) sales negotiators to take advantage of the turnaround in the market, or maybe you can’t afford to take that risk believe this to be a “dead cat bounce” and think a better tactic would be to baton down the hatches.
What about marketing? When revenue is so depleted, cuts have to be made. The easiest thing to cut is your advertising, but is that right? Publications are finding it as hard as we are and fantastic rates can now be found. The gurus (admittedly advertising gurus) will tell you that you should use a time like this to increase your presence and strengthen your position, so that when the good times return, you can take a much larger share.
How about lettings? It’s all very well thinking you can suddenly branch into new territories, such as lettings or property management. However, these practices take vast resources and years of experience to do correctly and they do not provide the instant results that you are used to in sales. It is also no coincidence that the Ombudsman has seen dramatic increases in the number of lettings complaints they are receiving from the public because of agents jumping into new disciplines that they know very little about.
What messages are you giving to your employees? Are you motivating and encouraging but at the same time masking the reality of your position? Should your employees realise that things are very difficult? Are you going to convince them to stick with you, even though they are earning so much less than in previous years? When are you telling them that you believe their life is going to become easier, and, do they believe you?
So what have you decided? Do you think that we may be over the worst and you are going to make all your decisions on that basis or do you think that this year will be even worse than last year and decide that further cuts are the answer? The agents that survive and thrive will be the ones that call the market at a time when nobody really knows the answer. So, no pressure then!