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REAL Trending Special Edition: Leading Through a Challenging Market

Sep 4, 2020 6:00:00 AM

Using his background in business development with Tom Ferry Coaching, Mark Johnson put a retention program in place that has been thriving no matter what the market holds. 

 

Tracey Velt:

In this special edition of the REAL Trending podcast, we're speaking with real estate leaders on how their businesses are adapting to the new market, their keys to success and more. This is Tracey Velt, editor and chief of content for REAL Trends. Today, we're speaking with Mark Johnson, CEO of JP and Associates REALTORS in Texas. Mark was previously vice president of business development and coaching success for the Tom Ferry Coaching Organization in California. As CEO for JP enterprises, he'll be responsible for the strategic growth of the firm. Welcome Mark.

Mark Johnson:

Well welcome Tracey. I'm so glad to be here today and great to hear your voice.

Tracey Velt:

Yah I'm glad that you're able to join us. So I would love to hear a little bit about just for people who don't really know, tell me a little bit about the brokerage and the geographic footprint of JP and Associates.

Mark Johnson:

Yeah, absolutely. So JP and Associates is a full service brokerage based on a transaction capped model with a productivity standard and a service based culture. And we operate in some of the largest real estate markets in America. We're here in Dallas-Fort Worth which is one of the fourth largest real estate market in the country. But down to 35 to Austin, Texas, and then into San Antonio and then over towards the border of New Mexico, El Paso, those are our major markets that we compete in.

Tracey Velt:

Okay, great. It sounds like you've been doing really well. You've talked a little bit earlier before we started recording about your success through COVID. So obviously things are opening up. So tell me, how was your business impacted and tell me about your success today.

Mark Johnson:

Yeah. Well certainly like everyone else, we had a very tough April and May but fortunately we had a very strong first quarter and then back in June, we just went through the rough. In every one of our major markets that we compete in, we are outperforming the market metrics to nearly by four times better than the market average. I couldn't be more proud of our team and it got me thinking how how did our real estate associates do it? What's in our culture that makes that type of a result possible. And Tracey a couple things came to mind if I could share those.

Tracey Velt:

Sure.

Mark Johnson:

So I think the five things that came to mind to me as I look back and reflect on what we did is first, immediately upon COVID hitting we pivoted and we started a morning club and every morning at 8:00 a.m I brought in either myself or a Ted talk type speaker for just about a 10 minute morning boost. But other than that, we had a culture where done is better than perfect. We knew how to pivot and our brokerage was already 100% digital. So our associates didn't have to learn the digital world, all they had to learn is just how to have now video consults. So that focus was already there. We kept having some fun. I hired a few folks and we did some virtual comedy nights throughout the first quarantine. And through all of that we all built our growth mindset. So there's just a couple of factors I think that contributed to a big win.

Tracey Velt:

Yeah. It's great to have some fun along with the seriousness of everything that was going on at the time, so that was a great idea.

Mark Johnson:

Yeah it was well received and we had two of them now. We had two of these virtual comedy nights with the troop of comedians and the family can come and it's just a relief valve that I think we all need during this crazy time where we're getting, it seems like a different soccer punch almost daily.

Tracey Velt:

Yeah, definitely. So obviously you've probably learned quite a few lessons just adapting to a virtual market, but also just along the way through the building of the brokerage. So tell me a couple of business lessons that you've learned through everything.

Mark Johnson:

Focus. I think the biggest thing that we're learning and we're seeing it in our associates. Right now we're seeing what I would call a flight to quality. Those associates that are focused in building their business and those associates maybe that are struggling because they're chasing too many rabbits. So I think that the key one would be focus. Keeping that wildly important goal and the few key activities. In the brokerage world that's really recruiting, retaining and keeping the existing agents productive and revenue profitability, the bottom line, keeping expenses in control. So focusing on a few things versus trying to focus on a hundred things.

Tracey Velt:

Yeah. That's a great lesson to learn. And I think a lot of leaders, it's really hard to focus on one thing because you have a million things going on so yeah.

Mark Johnson:

And in fact we have grown significantly even during the April, May period we kept our recruiting reach-outs high. In fact because our focus on recruiting was talent attraction, whatever term you want to use, was so high actually during COVID we found that we could get through to people that we couldn't get through before.

Tracey Velt:

Oh, that's interesting. And that kind of leads into my next question about the growth of the brokerage. So let's talk recruiting first and tell me why that was possible for you.

Mark Johnson:

That we could get through to folks that we couldn't get through to before?

Tracey Velt:

Yes, mm-hmm (affirmative).

Mark Johnson:

Well because quarantine forced some changes in business. It did slow things down for a while so people were more receptive, when you call they picked up the phone. Prior to that everyone was out on the streets busy doing their thing. And now we're seeing that right now. Now we're having people are so busy, agents are so busy getting through to some folks that we'd like to have conversations with is now becoming a little bit more difficult, but we just have to be diligent. So a part of that just helped us get through and have more quality conversations just because of the change in the environment.

Tracey Velt:

Okay. And now did you find that agents because of the uncertainty of everything were a little more leery about changing brokerages, or did you find the opposite that they were looking for different opportunities?

Mark Johnson:

No I think everyone will relate to, there was so much uncertainty and basically paralyzed folks. And so finding the paying points and understanding what's really the barrier to their growth became even more important. So you could have conversations about creating more certainty in their business in an uncertain time.

Tracey Velt:

Yeah. Good point. So let's talk about the growth strategy. So how has the growth strategy for JP and Associates evolved through the years and has that been impacted by COVID-19?

Mark Johnson:

Yeah. Well I think everything has been impacted by COVID-19 right. How could we look at each other and say you're the entire world, it seems like it's been turned upside down. But our growth strategy some people would look at us and say, well they're a hundred percent commission, they have a cap model, it's just all about the finances, but that's really not the case when you, when you look under the hood and get to really understand us. We're a full service brokerage. Our culture is so strong over... Every quarter I do a survey of our associates and I ask them only four questions. What are we doing well? What could we do better? Would you refer us? And anything else you want to tell us? And our referral percentage, well, you could call it a net promoter score is 9.5 out of 10.

Mark Johnson:

So we have such a high referral rate. Our associates love the culture. And when we do lose an associate, we don't lose them to any one firm. We typically lose them to a small boutique or a very individual, their mother or father opened a brokerage or something like that. So we have a very sticky culture that they value the tools and the resources and the training and the coaching. And sure they like the fees too, but it's more than just a fee.

Tracey Velt:

Okay. And how has it.

Mark Johnson:

I'll let my agents describe it because we survey them about that every quarter and they will use words like supportive leadership, amazing support, broker support, unparalleled, like I've never seen in any other firm that they've been with training and coaching. Those are the words that they'll use and very rarely they will say and low fees.

Tracey Velt:

Yeah. That's interesting-

Mark Johnson:

That's a key part of it. A key part of the growth strategy is providing more value than we're taking. We provide more value than we take and fees that we collect.

Tracey Velt:

And what-

Mark Johnson:

One of our hashtags that JP who founded the firm over eight years ago founded it on is exceeding expectations. So every day as a chief executive and me and my staff, we approach the day with how can we exceed our agent's expectations, not just meet them, but exceed them in our culture. And that's part of our culture.

Tracey Velt:

Okay. And what is your position? You have a background working with Tom Ferry in business development and so what did you bring to the table with JP and Associates to strengthen that culture?

Mark Johnson:

Oh that's a great question. Well as you know, is independent sales professionals who want to grow their business, one of their biggest barriers is either fear or lack of a plan or not understanding what the lead indicating measures of their success are. And so I've been able to provide some structure, some business planning and development tools that really drive focus.

Tracey Velt:

That's great yeah. And that is definitely something everyone needs especially now is just kind of figuring out that focus and having a clear path forward. So that's great.

Mark Johnson:

Yeah. And if I could add, I think another thing is just the concept on our culture that done is better than perfect. Done is better than perfect. There were two psychologists, Korean and Hill who did a study of over 40,000 people and they found that perfectionism has increased by 33%. And so it seems that our own associates, our own independent contractors are internalizing this myth that their business is going to be perfect. And the research shows that if you're occupied with this perfectionism, you just set yourself up for a setback. And so a part of what I've been able to bring is how to overcome the perfectionism and get into action. How to recognize that setback, that COVID punch in the face that got us. Assessing what happened, how we're going to make it right. Adjust the systems, give ourselves a little grace and then move forward.

Tracey Velt:

Okay. So as the CEO, what do you feel is the greatest challenge in business? Not necessarily just your brokerage but in the industry right now?

Mark Johnson:

Yeah I think there's a couple of challenges for sure. One is just the uncertainty that we're dealing with in COVID. Now we've adapted very well, I think our associates adapted very well and the lowest mortgage rates, if I can recall, have certainly helped but there's still a lot of uncertainty in terms of what's happening in the economy. How low interest rates will happen. So that's certainly the case. There's also still a lot of inefficiencies in our industry. There's still some procedures that require a physical signature versus a digital signature. There's still a lot of the transferring of these 6 million transactions that we do in the industry a year is still there's so much paper happening. So that's a really inefficient system that COVID is magnifying to us and really needs to be addressed from an industry perspective. We're still very inefficient from a processing and moving money around perspective.

Tracey Velt:

Yeah. That's definitely true. I even see that now with refinancing our mortgage and it's really, they're not using the remote notarization or anything like that. We have to go into the office to do our closing.

Mark Johnson:

Yeah, if you look at the, like in your case with refinance and mortgage this would be a fact check for somebody, but the basics of the mortgage industry haven't changed for 40 years. So there's just some things there either through legislation that we need to influence efficiencies and same with some of the tidal processes, they're just not keeping up with what we're going to need to work in this kind of virtual environment.

Tracey Velt:

Yeah. Yeah. So my last question is just I think that the real estate industry is resilient and the people in the industry are resilient and they don't see challenge as much as they see opportunity. So where do you see the most opportunity in real estate brokerage in maybe the next six months to a year?

Mark Johnson:

Well I could talk about that for hours probably but the first thing that came to mind and one thing that we're working on, I just did a study of our entire brokerage and our associates history. And we looked back through their history at their career in the MLS. And we determined how many of their past clients are still doing business with them. And we mirror unfortunately, we mirror the NAR averages which still show about 90% of clients say they'll do business with you, but only about 25% do.

Tracey Velt:

Right.

Mark Johnson:

But we identified a few agents who were at the 90% level. They're getting 90% of their past clients to still do business with them. And so we studied what are they doing and how they do it. And so I view that as a challenge at the field level, at the associate level, how we can showcase those folks that are actually doing it versus the bell curve and those who aren't. And when we solve that problem, then there's a lot of natural business that can just flow in to their pipeline.

Tracey Velt:

Yeah that's an interesting concept for sure. Well Mark is there anything that we didn't talk about that you think is important to know about JP and Associates and how you're handling everything right now?

Mark Johnson:

I think how I would end is one of my favorite quotes is if you don't make mistakes, you're not working hard enough or not working on hard enough problems and that's a big mistake, right? And so our approach here with our associates is what I call the art of curiosity and the art of questioning everything without judgment or assumptions. And with that approach comes continuous improvement and learning. And so that's what we're focused on is the art of curiosity so we can question everything without judgment or assumptions and that leads us to a culture of continuous improvement.

Tracey Velt:

Okay that's a nice way to end. Well Mark thanks so much for taking the time to speak with REAL Trends. We really appreciate your time.

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