How to Motivate Real Estate Agents to Close More Deals (The Science Top-Producing Brokerages Know)

What we're going to talk about first is a company called Nucor Steel, a steel company, and a real estate conversation. Why? Well, this company was founded back in the 1940s, a big steel manufacturer. And they did very, very well for years and years and years.

And then in the 50s and 60s, they didn't do as well. Some market conditions changed in the 60s. They were going bankrupt until they brought this guy in: Kenneth Anderson Iverson. And he fundamentally changed the way the company operated. He rescued the company, and he's still studied today in management courses across the nation.

And so what did he do differently? He came into this steel company and told all the floor workers, "Guys, we're going to do something different. You're going to be one of the lowest-paid steelworkers in the nation now, starting right now."

How do you think that went over? Like a lead bomb, right?

And he said, "But we're also going to do something else. We're going to pay you per piece of product you push out the door. So every product you push out the door, as long as it's not defective, it's done right, and we're able to sell it on the other side, you're going to get a little piece of that action. We're going to give you a little incentive for every piece that goes out."

What do you think then happened? The number of pieces that went out at a quality rate dramatically went up, right? And those steelworkers became the highest-paid steelworkers in the country, making 200 to 300% what the average steelworker in other steel mills was making.

So, it transformed the company.

Of course, the company turned extremely profitable. But he didn't invent that idea.

It actually came from this guy, James Lincoln. Lincoln Electric, founded in 1895, is still in business today, which is absolutely amazing. They've gone through massive transitions over time. Now they make welding equipment for massive things like airplanes and bulldozers, the big, big stuff. And they've just evolved over the years. But they also faced economic uncertainty. Back in the 1930s, during the Great Depression, they were on the verge of going out of business.

This guy came in, James Lincoln, the grandson of the founder, and he said, "Hey, we're going to change." And again, he told the workers, "We're going to keep you. We're not going to let you off like everybody else in the nation, but we're going to pay you per piece."

And exactly the same thing happened. The incentive incentivized everybody, and their production went through the roof.

Does this apply to real estate? It absolutely does. Let's look at how it does:

This guy, Dr. Victor Vroom, sounds like a Bond villain, doesn't it? Should have a Goldfinger or something. That sounds very ominous. Dr. Victor Vroom. But he said, "Hey, looking at what these guys have done over the years, this is something he's going to put into a theory called expectancy theory," and it explains that people are motivated to act when they believe three things are true:

1. That their effort will lead to strong performance
2. That their performance will lead to a reward
3. And that the reward is something they actually value (which, in these cases, was money)

And what is the ultimate reward for most of us, right? When all three of those things are aligned, what happens is motivation increases, obviously, as it did in both of those cases, right?

But if any one of those things is missing, it drops through the floor, and you have low productivity.

Okay, so can we apply this to real estate? Say yes. Yes, we can apply it to real estate. Here we go:

Give your people the power of certainty.

Certainty is what they crave, right? Certainty. So we're going to follow the same pattern, the same three steps. But we're applying it to real estate.

Contacts lead to appointments, right? Effort leads to performance. We all know that, being leaders, right? And appointments lead to listings. Performance equals a reward. The listing is the reward. And that listing will lead to closings, which ultimately gives us money in our pocket. The reward is value. So if they believe it and they have certainty in this, your people will go all in.

If they doubt any step, they will hesitate. They'll stop or they'll delay entirely. Do we have a ton of agents who are delaying, stopping, or not even starting to prospect and lead generate? A ton of them are because they do not have certainty. They don't believe it.

You know who does believe it? The top producers in your office. The top producers fully believe this chain works because they work it every day, and because they act with certainty, they create amazing results.

You’ve got to give your agents and brokers certainty. This is what we're shooting for, right? So another way we can look at certainty is we've got to give them confidence, which is another name for certainty.

But where does confidence come from? It comes from having competence. When you're competent at something, you become confident at that thing.

If we all became master chefs because we went to culinary school, we would suddenly have great confidence in our skills, right? How do we get that competence? Where does that come from? It's built from three things which we can help our agents with: education, right? We're helping them because they're learning from us.

Second is skill mastery, helping them to practice what they've learned. Maybe it's role-playing, maybe through going out and doing those things. But field practice is the last part, which is actually the doing of it.

So education, skill mastery, learn, practice, do.

The more your agents do that, the more competence they create. The more confidence they have, the more certainty they have, the more closings they'll create.
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+ 32 Years of Real Estate Sales, Management, and Coaching Experience
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+ Grew his Real Estate Company to 17 Offices (largest in Oregon)
+ His Current Team Closed $1.4 Billion in Sales in One Year
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