"They refuse to give me the good leads"

Published: Wed, 03/20/24

March 20, 2024

TOGETHER WITH

Good morning and welcome back. One of our most popular features has been our interview series, where we interview reps and leaders from across industries. If you’re interested in being featured, fill out this short form and we’ll get in touch. We’re looking for variety, so don’t be shy. Now, enjoy this week’s newsletter!

NUMBER OF THE WEEK

77% of B2B decision-makers now prefer speaking to vendors via video conference over speaking on the phone

Source: Saleslion

SALES ROUNDUP

Here’s what’s happening in the sales world this week:

A top saleswoman who worked for luxury fashion brand Gucci is suing the company, alleging they mocked her age, and bullied her until she wasted away to skin and bones. Tracy Cohen worked as a client advisor-sales associate for Gucci's Chicago store for eighteen years, selling more than $50 million of goods — including $5 million in 2021 alone. But in October 2023, she was terminated without severance. You can read more about the lawsuit here.
As electric vehicle buyers pull back, hybrid sales are surging. According to a recent article in The Wall Street Journal, hybrid sales are taking off, giving buyers who aren’t ready to go fully electric a fuel-efficient alternative. The number of hybrid models on sale in the U.S. grew 40% over five years, to about 70 for the 2024 model year, with Toyota leading the way. You can read more about it here.

FEATURE

goodluz/shutterstock.com

Here is how the NAR commission settlement is likely to change home sales

The National Association of Realtors (N.A.R.) reached a settlement last week agreeing to pay $418 million in damages to a group of homeowners in Missouri who claimed that the N.A.R. artificially raised realtor commissions. In addition to the payment, the N.A.R. agreed to change their rules on how real estate agents are compensated.

The change to the rules is so seismic that even though we're not a real estate-focused newsletter, it's worth discussing them, since they signal a massive shift in the way people buy and sell homes, potentially upending one of the biggest sales-focused industries in the country.

A commission rate between 5 and 6 percent of the home sale price, paid by the seller and split between the two agents on each side of the sale, has been standard practice in the U.S. for decades. In the U.K., commission rates are just above 1 percent, while countries like Singapore, Denmark, and the Netherlands have rates between 2 to 3 percent. According to The New York Times, here are five ways the real estate industry could change:

1. Commission Decoupling: A Shift in Payment Responsibility

The heart of the settlement lies in the concept of commission decoupling, meaning buyers and sellers will now each pay their respective agents. Traditionally, sellers have shouldered the cost for both agents’ commissions, but under the new structure, buyers will need to account for their agent's fees. This change aims to create more transparency and fairness in real estate transactions, although it may pose challenges for buyers, especially those struggling to afford a down payment.

2. Potential for Lower Commissions

The settlement is expected to introduce a competitive edge to commission rates. Historically, buyer agents received a share of the 5-6 percent commission, but with the new rules, there's room for negotiation and potentially lower rates. Research suggests commission rates could drop by as much as 2 percent, particularly on the buyer’s side. This competition could lead to reduced overall costs for buyers and sellers alike, making the process of buying a home more affordable.

3. Increased Transparency in Agent Commissions

Under the old system, the commission structure was often murky, with many buyers unaware that the seller was covering their agent’s fee. The settlement seeks to clarify this process, making commissions more transparent. Sellers and buyers will now have a clearer understanding of how agents are compensated, which (in theory) could enhance trust in real estate professionals and make the market more accessible to newcomers.

4. The Rise of DIY Home Buying

As buyers become responsible for their agent's fees, some may choose to bypass agents altogether. With a wealth of information and listings available on platforms like Zillow and Redfin, buyers might opt to conduct their home searches independently. However, this approach comes with its risks, including potential fraud and misunderstandings about the buying process.

5. Implications Beyond N.A.R. Members

The settlement not only affects members of the National Association of Realtors (N.A.R.) but also has broader implications for the industry. Non-members, particularly in cities with alternative real estate associations, may also see changes in how commissions are handled. For instance, New York City’s Real Estate Board outlined new rules allowing buyer’s brokers to negotiate their fees directly with the buyer, hinting at industry-wide shifts.

A More Equitable Future for Real Estate Transactions

This settlement marks a pivotal moment for the real estate industry, challenging the traditional norms of commission payments. By decoupling commissions and introducing more negotiation and transparency, the settlement aims to create a fairer and more competitive market. Buyers and sellers will need to navigate this new landscape with care, potentially reaping the benefits of lower costs and a more transparent process. As the industry adapts, all parties involved in real estate transactions will likely feel the ripple effects, heralding a new era of buying and selling homes.

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MEME OF THE WEEK

Source: Instagram -- Sales Humor

QUIZ

Which publicly traded CRM company has the biggest market capitalization?

A. Monday.com
B. HubSpot
C. Pipedrive
D. Freshworks

SALES FAILS

Each week, we bring you the most cringe-worthy sales moments from across the web. To submit your sales fail story for consideration, click here. (Don't worry, you'll remain completely anonymous).

I work inside sales in what I guess would be called financial services. We sell to consumers and have to discuss people’s incomes and personal finances in order to get them approved. Rarely does this become an issue.

A few months ago, I got an inbound lead. It was a middle-aged guy who was no different from our typical customer. He was friendly and conversational, telling me about his kids and his hobbies, the usual stuff.

We eventually got into a conversation about finances. This is part of our application process. When I asked about his salary, he told me it was in the low six figures, and mentioned that he’d just received a pretty big raise. As I normally would, I said, “Congratulations. That’s really awesome.”

After I said that, he responded with, “Is it though? Inflation eats up most of it and my payments eat up the rest. I don’t think it’s awesome at all.” Then he completely changed and started being super rude to me. He sounded distracted and was giving one-word answers, after being cheerful and conversational the other times we spoke.

Finally, after another ten minutes or so, he said, “Actually, I don’t think I want to do this. Don’t call me again,” and hung up the phone. I don’t know if there was something wrong with this guy, but I’ve never had someone change on a dime that quickly. I still don’t think I did anything wrong.

Anonymous Location withheld

GRAPH OF THE WEEK

Source: LinkedIn Poll -- March 2024

WORTH A PEEK

Do you (like many of us) struggle with reluctance to make your calls? A recent article published by HubSpot tackled call avoidance, with "5 Tried-and-True Ways to Overcome Your Reluctance to Call Prospects." The advice is good — check it out here.

ASK THE QUOTA

Want to submit a question and be featured in our advice column? Click here. (Don't worry, you'll remain completely anonymous).

Dear Quota Team

I just started a new job as an SDR at a Series C startup. The company has a good product (although there's a lot of competition) and the company culture is pretty cool. I came from a very corporate-y job so the change is refreshing. However, the sales team definitely has a pecking order, where the reps that have been here the longest get the best lead opportunities.

I've been getting stuck with really crappy leads that aren't qualified or are just really low contract value. The sales manager routes the better lead opportunities to other reps, who have the same job title as me, but have been here longer.

I feel like this isn't fair and I'm facing an uphill battle to hit my number while the other reps can just coast with their preferential treatment. I want to bring this up to my sales manager, but I don't want to come off as a complainer. I'm ready to do the work, but I just want the opportunity.

Struggling in Los Angeles

Dear Struggling,

Based on what you said about the company and product it sounds like you already do have a great opportunity in front of you. It's not uncommon for sales teams to have a pecking order. When the company has important leads come through the door, it's no surprise that your sales manager wants to send them to the reps he's worked with the longest and trusts to close those big deals.

It sounds like the path to getting better leads is straightforward: prove yourself and earn the opportunity. Most likely, those reps that get the better leads were in your position not too long ago, and they pushed through and earned the right to be where they are today. If you focus on yourself and put your head down and get to work for the next 3 months, you'll almost certainly be in a better place. Good luck!

Quiz Answer: B. HubSpot has the biggest market cap, at 30.46B (Mar 17, 2024)

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How did you like today's story?

Today's email was written by Ken Kupchik, Erica Furgiuele, Steve Rado, and Emily Hill.

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