The Independent Title Agent Survival Guide: Sales Rep Edition Part 1
Why is a powerful word.
A lifetime of building title companies, evaluating title workflows, and now buying and selling title companies has taught me to embrace the power of asking why.
It’s always a good idea to consider why we do things. This allows for depth of thought in layers. By asking “why” something is done repeatedly, we gain a deeper understanding. If there are valid answers at each level, the approach is likely correct. If not, we explore alternatives.
Why do conventional title companies employ sales reps? Is there another way to drive volumes?
I’ve always been an advocate of the value sales reps bring. I began to question this when we crossed paths with more than a few companies WITH NO SALES REPS. How is it that some companies we’ve sold (with high margins) have no sales reps?
What do they know that others don’t? What are they doing differently? And why?
Some title companies are captives, and for them sales reps are not necessary (but they need to pay attention to controlled business regulations) since business is driven through the door by virtue of their structure. Joint Ventures also have differing needs than conventional title agencies in terms of sale reps, since typically one of the JV partners is there because they plan to supply orders (in a compliant manner of course!).
The purpose of sales reps in the context of conventional title agencies initially is to inform prospective clients of who you are and extol the virtues of hiring your title firm to process orders. Intuitively that makes sense. A good sales rep will drive business in the door. Mostly (due to change in regulations since donuts, sports tickets, and beer no longer cut it) sales reps will forge and cultivate relationships as a tool to succeed. Once deals flow the rep manages the relationship.
This is not a one size fits all issue. Selling high volume institutional work (i.e. refis or iBuyers) is very different than selling one-off residential buy/sell deals or high end complex commercial. Different skills are needed by product line.
Most title companies face common challenges. Selling is one of them. Turk & Co’s extensive closed M&A deal list of title agencies where we have represented either the buyer or seller has allowed us a robust ‘look under the hood’ and with that a unique perspective. It is fascinating to see how many different ways there are to solve the same problem of how to drive business through the door.
Many title companies are struggling right now. It’s natural for them to evaluate each and every part of their business in order to survive. Some look at challenges and think, “If it’s not broken, don’t break it’, whereas others think, “If it’s not broken, break it, because if we don’t, someone else will’.
Let’s face it, sales reps are not cheap. They need expense accounts and may even require training on basic things such as how to write emails. Some think a PSA is a public service announcement while others know more than most attorneys about real estate law. ’Experts’ (some better than others) who will take your hard-earned money and teach sales reps how to sell are now a dime a dozen.
One might think that doing a good job is enough to persuade others to use the services your firm provides. That might be more of the case for institutional work, where SLAs are commonly used and everything is measured. The flip-side of course is that in many title environments, you’re really only as good as your last deal. Mess one up and the thousand you did right vanish in your customer’s mind.
The title company who replaced sales reps with a Culture of Sales
Once upon a time in a land not so far away, where title agency owner’s dreams and wishes all come true, there lived a title company with no sales reps. Nada. Their P/L glistened with a ‘0’ on the line item where fully loaded sales rep expense once was and their top line revenue and EBITDA trend grew and grew and grew…
Sound like a fairy tale? Think again. This happens and we are seeing it more and more.
So, who does the selling if there are no sales reps? The answer is everyone.
A Culture of Sales, accompanied by customer service technicians and a clever structure, can distinguish a great company from an ordinary one. Imagine a world where everyone had a business growth mindset, accompanied by a financial incentive to help grow the business (some states require licensing). Your employees are not volunteers. They need to look beyond their basic job description and recognize that sales is a mindset that they all do well to embrace. Everyone should be in ‘sales mode’ all the time. We’ve seen this done right -and when done right it works.
We’re not a fancy sales training company with slick marketing and smooth-talking motivators. We are a FINRA regulated Mergers and Acquisitions firm (https://brokercheck.finra.org), a member of SIPC and compliant with all SEC regulations. Because we have represented so many buyers and sellers of title agencies and ancillary businesses, we have the benefit of a unique insight. There is a saying that ‘numbers never lie’ and we very much believe that! If what an agency is doing is correct, the P/L will reflect that. We’ve seen title agencies adopt a Culture of Sales mindset with wonderful results. Our goal is simply to share what we’ve seen work well. A Culture of Sales mindset can stand alone or augment and empower your sales team.
The Independent Title Agent Survival Guide: Sales Rep Edition Part 2
NOTE: I wrote this blog in two segments because there is so much I want to share and was worried it would be too long. On reflection I decided to issue both parts at once. Why? The information is TIMELY. I am hopeful you will incorporate the notions portrayed and that in turn will help you.
I used to run a multi-state title company and told my head of ops never to bring me a problem without a solution. We don’t run or invest in title companies anymore (it would be a conflict for many reasons), but nonetheless I wanted to convey some practical and simple steps title agencies can use to implement a Culture of Sales as a solution.
If you want to build a Culture of Sales, here are some things we’ve seen work:
- Sell at the Closing. Realtors send title orders -especially if they are happy. You know what makes Realtors happy? Money. Money from you – as in when your closer gives them a check at the closing table is likely to be a Happy Time. Happy Times are ideal for asking about business. If your closer knows to do that -and then follows up and has an actual 4incentive to ensure new business from that Realtor is sent your way, you’re very likely to have a result much better than your competitor whose reps might only be sending emails written by a computer or glad handing/coaxing/guilting to solicit deals. Selling (subtlety is key) at the closing makes a ton of sense. Do that.
- Impress upon every single person in the company that each and every interaction they have is representing the company and influencing the customer’s decision to use them or not to use them on the next transaction.
- Incentivize: Develop and implement a bonus structure based on orders in, revenue or closing counts. Make it a team effort. Transparency and erring on the side of oversharing is key here. The team should be fully informed as to how the business is doing (i.e. are they hitting the targets necessary to trigger bonuses).
- Create a “new client” bonus for any escrow officer, title officer, or non-sales rep who identifies, qualifies, and helps onboard a new client. (I.e.: $100 gift card for first closed order, $50 gift card for second closed order).
- Expand your reach. Title is and has always been a relationship business. Your staff will have their own set of relationships with people in their circle who may be prospective clients or who can also refer business in. This is especially true for existing relationship your staff have with other member of groups they belong to (think, church or social etc.) Add in the social media potential of ALL employees and your firm’s reach could be dramatically larger in a moment. All you need to do is give them a reason to do this.
- Quantify and illustrate the number of orders / revenue targets that must be met to (1) maintain the current number of employees (2) hire more (3) afford the cost of expansion or optimization.
- Communicate effectively: Be respectful (start with a “Hello, John”), be clear, be comprehensive, be concise, but most of all don’t leave room for misinterpretation (of facts or sentiments). Every email can also be a marketing opportunity. Pay attention to your signature blocks.
- Approach problem solving collaboratively using a team approach: Understanding the customer’s needs, contributing to overflowing workloads, and responding promptly to every email makes clients feel appreciated and valued. The team that works together against the problem can better anticipate the unique needs of each customer. Kaizen is a philosophy which revolves around constant improvement in incremental steps. Consider implementing a Kaizen approach (ask us how). You know who knows the most about process improvement or tactic changes which improve your business? Your staff. Ask them. Give them a reason to offer helpful suggestions.
One of the first things we do when evaluating a prospective title agency seller (either acting for the seller or buyer) is take a good hard look at where the business comes from, and who owns the relationships which drive business in the door. All buyers are interested in the continued sustainability of the order flow. It used to be that almost all firms we sell had sales reps who owned and managed key relationships. We now know that sales reps are not always necessary. What isalways necessary is achieving some comfort that the business’ volumes are not only sustainable but also positioned for expansion. No one buys a title company to maintain the status quo.
Every title agency is unique in some ways. Some title agencies will see value in their pure sales reps, and will want to spend money on sales trainings, teaching the reps how to read a commitment and so on. What works for some does not necessarily work for others. A Culture of Sales mindset is always a good idea and will augment existing sales efforts. Teaming sales reps who have technical capabilities with ops people is another winning strategy which can help get deals closed while lowering claims exposure.
Technology plays a role in the world of sales reps, but technology will not replace them. For example, AI is a hot topic right now. It’s scary. AI works well for mechanistic tasks which require a low degree of complex reasoning. Sales is the opposite because it is anything but mechanistic (often emotional) and the decision as to who to hire involves a high degree of complex reasoning. Nothing beats a human-to-human interaction when it comes to sales. However, sales reps who use technology as an organizational, prospecting, and CRM management tool will replace those without a strategy. Bet on that.
Back to why. If you have sales reps, ask why your sales reps are outperforming the market and producing consistent, sustainable volume? If you don’t have an answer, they’re not. If they are not-evaluate what they cost and what profitability is tied to each and every one of them. In a M&A process the buyer will do just that. It is far better to be ahead of the game here. If you are not making money from your reps, prudence dictates being open to changing things up. Trust me on this.
In the middle of this discussion about sales reps, we all do well to consider the story of Circuit City, which is relevant by analogy. Once one of the leading electronic retailers in the world, their genius CEO decided in March of 2007 to replace 3,400 experienced salespeople on commission with 2,100 inexperienced and lower paid hourly workers to save money. After all, isn’t cutting costs always a good idea? Apparently not. In November 2008 Circuit City filed for bankruptcy. Turned out that customers viewed the good sales reps as consultants who helped them choose what to buy. Because Circuit City could not fill that need, customers went to Best Buy (and some to Amazon). Ooops…(but don’t worry, the CEO still got his bonus for 2007).
Knowing why things are done is essential. What does all this mean? Should you fire all your sales reps? We think not. We think title agencies need to regularly run ‘profitability by sales rep’ analyses to make sure the reps are earning their keep. We also think incorporating a sales-oriented mindset makes a ton of sense whether you have sales reps or not. Lastly, we believe a well-run title agency should be open to new ways for reps to work, namely by becoming technicians who help get deals closed and who work in tandem with ops.
We all have a choice between being reactive and proactive. There are few problems a title agency can have which are not solved by increased sales. More money is better than less. When volumes are generally down, smart agencies double down on ways to increase market share and set themselves up for the next (and inevitable) expansion. Rethinking your approach to sales can be a great way to prepare for the inevitable ride to come and better position yourself for a M&A event!
Turk & Co is a title industry-centric M&A firm (member FINRA/SIPC) with global reach offering merger, acquisition, and strategic advisory services to those looking to buy, sell or grow title businesses. With decades of experience, Turk & Co works closely with our clients to thoroughly understand their objectives, helping business owners evaluate and build the right strategy for all aspects of the buy and sale process.