We Are Selling with Lee Woodward
We Are Selling is a weekly podcast about real estate, business and tackling life's challenges. Hosted by renowned real estate industry coach, Lee Woodward, learn from experts in their field and maximise your life.
We Are Selling with Lee Woodward
149 Becoming A Director of Sales - Mark Kentwell
Send a message directly to Lee ( Include your details )
What does it take to transform from a stellar salesperson into a formidable director of sales? Mark Kentwell returns to share his decade-long evolution in crafting a business model that's not only self-sustaining but thrives beyond his personal sales achievements. Dive into the significance of creating a systemised, scalable, and saleable business, spotlighting agent gross commission income (AGCI) to reflect a team's contributions. Mark offers his expertise in handling high-value, intricate deals across regional Australia, an approach that has significantly fueled his company's success.
Join us as we dissect the essential ingredients for developing sales leadership and systems, focusing on business leaders' strategic roles in performance management. From onboarding new recruits to maintaining a regular meeting cadence, we unpack how these elements ensure robust communication and swift responses to challenges. Mark emphasises the sales director's pivotal role in spearheading prospecting efforts and crafting marketing strategies to identify and nurture potential A players, creating opportunities for internal growth.
Optimising sales performance exceeds chasing top-line revenue, mastering gross margin and predictability. I'd like you to please find out how structured systems like the Traffic Lights rank property listings to enhance efficiency. For a glimpse into the future, Mark introduces Nexr, a business operating system revolutionising real estate by offering innovative consulting services. We conclude by highlighting the power of team collaboration and our commitment to delivering even richer content by 2025, with Mark's ongoing insights promising to elevate our efforts even further.
Hosted by Lee Woodward and brought to you by Lee Woodward Training Systems.
Next Events. Purchase Lee's New Book - Claiming Doors.
Lee Woodward Short Courses.
Hello and welcome back to the podcast we Are Selling this week. We have a special guest returning, and that's due to his incredible study knowledge and depth on today's topic. Joining me today is Mr Mark Kentwell. Mark, welcome aboard.
Speaker 2:Amazing to be here for this topic, lee. This one's been a long time coming.
Speaker 1:Well, mark today's topic is becoming a director of sales, and it also for some of our business owners that are listening today, or principals, it could be the shift from lister to leader, and you've had to do both of these things, mark. Take us into your transition of what you had to do to make that a reality of your business life today.
Speaker 2:Well, it took a lot longer than expected, Lee. A large part of that, I suppose, is that I was also growing multiple organizations and people and product lines at the time, so I don't think it needs to take as long. For others, it was more than 10 years for me to get to a position where the business was not dependent on my personal production revenue in order to make a good business margin and continue to grow. So that was my number one objective that if we are going to create that, I want a sticky recurring revenue business that is systemized, scalable, sustainable and saleable, which means it's not dependent on any single person.
Speaker 1:Well, Mark, let's just delve into that, because that's a deep, important point and especially for our listeners in the UK. What would have been the revenue contribution of your effective business unit on average in the last couple of years of you listing and selling?
Speaker 2:Yeah, like Lee, in the last few years of listing and selling the peak was $4.1 million in agent gross commission income. I call it agent gross commission income rather than gross commission income because if there's been any co-lists, conjunctions, referrals, listing leads that have come outside of the business or where there's been another agent participate, then that part of the contribution was not done necessarily by that agent or agent team alone. So agent gross commission income I think is AGCI, a term that the industry would consider adopting for themselves so that we're not sort of over-reporting or double counting. So that 4.1 in that last year, which was really a range of three and a half to 4.1, or three to 4.1 in the years leading up to it, my objective was to replace my commission component of that team. So if that team was to keep doing circa 3 million when I stepped out of it, because I was paid as a salesperson as well as a director, because that's how you set a business up, so that when you take a generator out of the business you also take their cost of goods sold out of the business.
Speaker 2:So the business margin was what I needed to protect.
Speaker 2:So by taking my fees out and the split that I would get.
Speaker 2:Then that team could perform at circa $3 million and I would just need to go and replace myself with a couple of other listing agents that don't necessarily have to be at that level, which I went and did before I stepped out of the team.
Speaker 2:So by the time that they were up and running, by me moving out of it and then supporting the team in their own growth and development, I could focus on developing those within the leadership tribe and the strategic vision of the business where I can put the most value into it, and those that step in behind me can make up the same amount of production for the very critical number of gross margin dollars. Gross margin dollars, I believe, is where, as principals in the industry, we really need to start focusing on, because it's something that I think, in the spirit of growth that's happened throughout the last couple of decades that people have sort of forgotten about, and with costs rising, commission splits rising and the cost of doing business rising, with consumer free pressure coming from the other side, you can very easily grow yourself broke if you don't get these models right.
Speaker 1:I love that phrase. You can grow yourself broke because everyone's so focused on growth. But just a moment there, and especially for our international listener. Mark, you work in regional Australia. You work in one of Australia's biggest country towns. That's an incredible effort as a generator to be doing that type of funds. But I know people listening sometimes think oh, you must be selling houses for $40 million or something.
Speaker 2:The type of home that you were selling in those last two years were Well, yeah, I focused myself on the more complex deals complex, high dollar deals that required a lot of intellect to do the deal that there was less competition in.
Speaker 2:So my average sale price in the region was substantially above other colleagues in the business or in the marketplace, Though the business's average sale price around about $1.15 million. So somewhere in that early million mark is the business's average sale price. I would deliberately target the $3 million and up bracket because that's where the air starts getting thinner and there's less practitioners that can play there. So by having bigger, more complex deal chunks, I was focused on people that were buying properties and usually managing other assets or selling other assets. As a result of it, that one deal could cover a good chunk of the month's overhead and then the next deal from there really add a layer cake to it. And then, because it's specialized on a geographic area, on a price segment and a type of customer we call that core customer, then you sort of develop a momentum where they are seeking you out whilst you are adding value to them and guiding them in your direction as well.
Speaker 1:Outstanding effort. Let's get into this topic, and it was such an important background check there to just set the scene. But becoming a director of sales before we get into how wonderful the role is and what that role needs to be, I'll jump in there. This is one of the toughest gigs in the shop. It is not a paddock where salespeople think, okay, I've been really, really successful. I might just take it easy. If that's a thought, switch off the audio now, because this is not what it's about.
Speaker 1:Being a director of sales is. Well, being a director of anything means you've got to have the responsibility, and it starts with the revenue that you are going to generate into the business through others, because you're not listing and selling real estate directly with your own clients. But, mark, take us into your observation. And what a time to record. You're looking at this role right now for some of the businesses that you have, so it's perfect time to record you. But I want to start with the actual remuneration package of what a director of sales should get, which is very different to some of these crazy numbers I've heard around the industry who grew themselves broke. Take us into it, mark.
Speaker 2:Yes, lee. Look, this is going to have a few different ways that people can slice this up, but I believe that the responsibility of this starts with the C-suite and the board of the company, because this is such a critical role in real estate sales in particular. We really need to have a look at how our spectrum is, with agent fees coming out as a cost of goods sold. We really need to watch the gross margin of the business and, just in a simple term explainer for those that aren't familiar with these terms, regularly most people will, but I'll just explain what I mean. So the gross revenue that comes into your business as per what the owners have signed up on the agency agreement, we're going to call that gross revenue, whatever the top line number is. Then you've got referral fees that sometimes go out.
Speaker 2:If people are using, like lead interceptors, like OpenAgent or Selma Castle or any of those, because they don't have a marketplace where they can sort of get in front of that, then that's a cost that needs to be taken into account. If you're in a network, that's a cost that needs to be taken into account. If you're in a network, that's a cost that needs to be taken into account. Once those costs are taken away, you also have the agent cost. So if they're on a split and it varies around Australia it used to be sort of 30% to 50%. Now it's getting much more 40% to 80% depending on the business models that are there. So let's just say that it's 50% comes off for really simple numbers. Then, if 50% has come off of the agent and then there are some other costs like networks or referrals or whatever, what you're left with after that is called the gross margin. So it's the cost of goods sold coming off your revenue and the cost of goods sold or anything directly tied to that transaction, like the agent split, a referral fee, and if you use a sort of scaled back-end provider that goes up and down with your revenue, then they'll be in your cost of goods sold line or COGS instead of in your operational expenses or OPEX. So most businesses I'm going to just use something generic here which is referred to from, say, macquarie Benchmark Surveys or any of the stuff, like Chris does with live accounting or any of the other experts out there let's just say it's 33% gross margin that you can expect coming in on your revenue of sales.
Speaker 2:If you've got 33% gross margin coming in, then that is the number that we need to look at, because your operational cost is still going to come out of that. So if you've written a million dollars in revenue that month, you've got 330 to play with in gross margin. Then if your overheads for your business are $250,000 and they are recurring and they're quite substantial, quite stable at that, $250,000 would be low overheads for a business doing a million dollars a month in revenue. But just use this as an example. You've got $250,000 coming out of $330,000. So you've got $80,000 to play with. That $80,000 times 12 months you're getting close to a million dollars of net profit or pre-tax profit. Now that sounds fabulous. However, if you go and add cost to your operational line and that cost will then come out of that gross margin. So if you go from $250,000 to $280,000, for example, now you're taking $50,000 pre-tax profit. But what happens if the revenue comes down for one month, if you go to $800,000 that month instead of doing, hypothetically, $1 million, well, $800,000 funds a 33% gross margin, equals $264,000. Now if you've got a 250 base, there's $14,000 for the entire organisation in pre-tax profit. And that's not even taking into account that there will be variations in operational expense. Some months are a five payday month, for example, or it might be that it's a short month or there's a new expense that comes in, or it's a lower revenue month across the board. So $264,000 in gross margin with a 250 cost base is very, very shaky.
Speaker 2:If you go and add on top of that another 15 or 20 grand for who is going to be this performance leader or sales director or whatever version of that role it is that needs to be returned. So if we've got someone earning hypothetically $150,000 total cost to the business, that's not what they're getting in their pocket. But if it was $150,000 including payroll tax, superannuation, any car package, phone, just the hard dollar ancillary costs that the business does not get to keep as a result of having them, not the extra costs like the oxygen they breathe or the particular part of the office space they take up or the fact that they might distract a few other people from their main production roles, leave all that out of it for now. If they're 150 grand gross cost to the business and we need to at least break even for this role being there, then on a 33% gross margin they need to add at least $450,000 in gross income coming in the top just to break even. But that is not really why you would get someone. You're not getting anyone to break even.
Speaker 2:If you think about it, when you've got mechanics working in workshops, they might be $30 to $40 an hour and they might get charged out of $220 or $240 an hour by the dealership.
Speaker 2:They can then also make money on parts. We don't make money on parts like others do in other industries, like when we do vendor-paid marketing. We're not making money on that, even though we are selling it on behalf of someone else. And if we do, we've got to disclose it and it's usually a nominal amount if there's any rebates or benefits to come from that. So we've really got to get the money back in gross margin and if we've got a ratio involved there, the minimum ticket to ride, in my personal opinion, is that they need to deliver a minimum of three to one return on investment to the gross margin of the business. So if their break-even is $450,000, well we need to be $450,000 times three and that would be $1.35 million that they can draw a clear line that they have added to the business that was not there before their involvement. That would be the base ticket to ride for someone in this arena.
Speaker 1:In my opinion, Mark, that was so well explained and for a lot of people listening to this right now, they'll go woo. There was so much in that and that's why this conversation needs to happen. People wanting to go into this role think, oh well, the business is doing a couple of million in fees, I should get paid 500. And you think, no, if that was the case, the business is going to shut down because there's nothing left. And people talk about turnover versus leftover.
Speaker 1:And you have now just articulated from the beginning why this role needs to be assessed properly and what you can add and bring in, and that could be from recruiting people, managing the relationships of the business, but technically deal, writing every single opportunity of the agents where, mark, you might have five properties that are close to coming on the market and I'll give you a hand with those and it accelerates. We don't lose it, we get it. There is a contribution, but it's still the agent who's the performing, commission-based person doing that role and they're being measured. So the measurement of a director of sales it's not just a cruisy role. There is a financial, factual side to it, which we've just listened to, then, and understanding that there's just not that much money to throw around, unless the business is at an enormous level where there is hundreds of agents there. That can be a different scenario.
Speaker 1:Mark, in this role, when you played the role, you understand the role and you're now looking at people to do this role for a few businesses that you look after, not just your own. What do you see? The description or the position commitment agreement of this role?
Speaker 2:Sure, yeah, lee. Look, this is going to vary from business to business, but I'll certainly talk about what I believe needs to be encompassed within it. So the first thing is the business leaders whether it's a board, whether it's a C-suite gets involved, depending on their size and the strategic support they've got. If they're a small business, then this is why you need coaches and advisors, so everyone can do this process correctly.
Speaker 2:We need to set up, in the first place, the system that they're going to operate within, because, in my belief, if you're bringing in someone that is going to be tied directly to performance and they're going to have to meet a set of standards on who they bring into the business and how they onboard them into the business, who's already there in the business and how we bring them or hold them to the standards that we have evolved to in our business, because sometimes there's kind of legacy people that are there but they're not necessarily living to the A player standard of what has been now set for the organization due to its evolution.
Speaker 2:So they've got to maintain that standard in new recruits, onboarding and existing team members. There's going to be a set of members, there's going to be a set of measurements and there's going to be a set of behavioral, but those can all be tied back to a form of number. So the day by day both the sales team members that they are supporting the growth of and the journey of, as well as the chief performance officer or sales director or sales manager whichever this title is going to be, depending on organizational status they can be measured day by day as well to determine what success looks like. So there's going to be a combination of lead and lag indicators that they're responsible for.
Speaker 1:So, in that role, take us into what they do on a weekly basis.
Speaker 2:So on a weekly basis they would be responsible for maintaining their own list of prospects in the marketplace that could be future A players for this organization and having a nurturing process for that that goes from nurturing right through to conversion or nurturing meeting and ongoing nurturing. So that's sort of a lead indicator for them. As far as new talent development, it's very important we have new talent development, particularly not just in the fee-writing listing agents out there. You might want to cultivate your own internally, especially if you're in an area where the sort of competitions are already kind of assembled themselves. They're all pretty long-term players, especially as several of them are in equity or leadership positions that are unlikely to transition. Then you do have to sometimes create your own and this is where the board or the C-suite will help set these intentions.
Speaker 2:In relation to the daily performance rhythms, I believe that all organisations of all kinds should be running to a meeting cadence, a meeting rhythm that's like the beat of a drum. All the greats talk about this Jim Collins, the Rockefeller Habits, vern Harnish in Scaling Up EOS, from Dan Sullivan and Gino Wickman. You hear from it in Patrick Lencioni's Death by Meeting and all of the other parts that go with it. We need a daily pulse. We need a weekly meeting. We need a daily pulse. We need a weekly meeting. We need a monthly meeting, we need a quarterly meeting, we need an annual meeting.
Speaker 2:And when those meetings are all assembled in the right way, then everything that leadership wants to get through to the team and everything the team needs to get through to leadership including customer data, feedback and our key performance indicators nothing ever takes longer to ripple through the entire organization than 24 hours.
Speaker 2:So if there's an intention of an agent to do a deal this month and they've pre-planned that deal at the start of the month, where they set their agenda, what we're going to focus on, how much of our energy goes to it, and we allocate roles, then each day they're either on track or off track to achieve what they have set for themselves in that quarter, that month, that week, that day.
Speaker 2:And when they are off track, they openly communicate in a trusting environment and that information then ripples back to the performance leader that we're referring to here and they can assist with priority-led coaching, learning, deal support, whatever it needs to be. So if they're stuck on something and they can't solve it themselves in their own little team unit. Then they go to other peers within the team. They go to full-time coaches or performance leaders, they go to training manuals, but whatever it is, if it's a problem that's standing in the way of them achieving their focus for that day, their priority for that week, their numbers for that month, their quarterly rocks or their annual goals, if it's standing between them and their goals and it's the most important thing, that's where this performance leader can assist them in unblocking those blockages so they can move forward and achieve their goals.
Speaker 1:And it's so good to hear this. As an educator you talk to people about you're going to need a prospecting communications plan. Now, in a director of sales, you've got to know that plan and be able to execute that better than anyone. Across the agents, you're teaching them how to be lead generators, building listing streams and assisting with the company marketing as well. And if the company can generate leads, that is a whole new way of recruiting, whereas in traditional recruiting it's all up to you. That's why we're giving you a bigger percentage. We don't really offer anything.
Speaker 1:And then suddenly we're back to that position of, okay, we've got these people on big splits, but no one's earning anything because there's nothing left to generate that opportunity. Then we're going to have to have a listing presentation. We're going to have to have a lead behind. Then we're going to have to have a listing presentation. We're going to have to have a leave behind the tools of trade of the company. The director of sales is to drive and make those happen and, yes, they may be involved in some of the projects to get those done. Mark, in the last six months I've done probably seven different listing leave behinds for companies where either the principal or director of sales have brought me in to complete that project because without it it has an effect across the whole business as we're losing listings. But that person may not be the person that had to pull it together, but they've got to enforce the implementation of the company systems.
Speaker 2:Absolutely, lee. So this is again coming back to the responsibility of the leaders. They can pull in coaches or people like yourself that can do projects like this. And remembering just because you can deliver something internally, it doesn't mean it's going to be the best outcome. If you look at someone like yourself, lee, you are inside the most successful real estate businesses in Australasia, which kind of makes you inside the most successful real estate businesses, particularly in residential, on the planet.
Speaker 2:Australia's market is incredibly advanced with the practice of real estate and there's a lot more variables in our market because we're mostly a seller representative market. We're vendor paid marketing direct to consumer involvement. I know buyers advocacy is becoming bigger and I've been championing that more than a decade, but it's still only a small percentage of the overall spectrum. So if you're in the most advanced businesses and you're seeing what's working and what's not, they're not paying you to go and learn how to put this together. What they're bringing is your collective experience. You can never, ever afford to pay for the amount of experience you've gathered on what works and what doesn't. So this isn't just an ad for you, leah, or anyone that does work like this, but there is no doubt that having these tools, these artifacts, these pieces of collateral. They are one piece of the puzzle, but they're an incredibly important one, because it's very hard to hold people to a standard and help them come on the journey of what success looks like.
Speaker 2:If you're not using some sort of orderly system, it doesn't mean that you can't have your own personal brand and delivery technique. That's where the beauty of a human-based organisation comes in. But we've got to be very careful here that we don't get caught up in a really woke sort of woo-woo sentiment that we say that if we track performance and the indicators then we're all cold and heartless capitalist greedy pigs. It is not the case. I see money as stored bricks of energy that you can then go and put into direction of the change that you want to make in your life and the lives of others. So when you accumulate money, it's just a scoreboard to say you're on track for the value that you're adding. We get money in exchange for giving value, and when we give more value than it costs, then that's where the client gets an upside, that's where our team gets an upside and the exchange of value.
Speaker 2:We need to make sure that we generate a profit in that process. So we've got to sell the services for more than they cost us to deliver, but profit's only one part of it. Profit's sort of like water. When you drink water, you survive, you can go a couple of days without, but not many. But then cash. You need to generate cash as well, and the cash is simply the cashflow conversion cycle. This is where days on market become really important. This is where days of settlement can come into the process. This is where, when you invoice people and get the money back in, if you receive the money in before you have to pay your expenses out you generate a cash, even if it's just for a small window of time. So you need to have a positive cash flow generation tool.
Speaker 2:I could go into this much deeper if we do the full-day workshop, lee, because I get this question all of the time. We need to make a profit and generate cash. We need to make a profit and generate cash. We need to drink water and we need oxygen to breathe. If you've got no cash, you're not going to last long. So these are the things that need to be taken into account and I think that there is a great opportunity here to get it right from a business and a leadership point of view. And then these people are stepping into a system that they might help polish, but they're not coming up with the system because they're going to be held accountable to this system.
Speaker 1:Absolutely brilliant information. And, as you explain in that, mark, I get all these flashbacks of comments from people, even in my own company, where everyone looks at the turnover of a company and thinks, oh, the owners are just killing it, they're just making all this money. I should get paid more. Yet the reality of that is not correct. My flashback moment was I remember in the early days running Real Estate Academy, when we had the plasma without running dollars for the day, and our wonderful receptionist who's probably listening to this podcast right now, as a mature lady said to me Lee, we've done $7,000. Today you must be so ecstatic. And I said Shannon, we're at $13,000 a day to run. Give me a yell when we reach that point.
Speaker 1:And I just remember that you look at the numbers and it's per day, because when 22 people turn up and it wasn't 22 at that point, it would have been about nine of us, or something like that and you turn up to a building with power on and phones on and back.
Speaker 1:Then you got your big server up and it wasn't 22 at that point, it would have been about nine of us, or something like that and you turn up to a building with power on and phones on and back then you got your big server room with all your computers and I don't know if that was better or worse. People say, oh, you know it was expensive running a server. You look at the tech stack today required. It is absolutely enormous the money it costs per month to run the technology that's required to do the jobs today. I really want this program to bring light on that topic, because everyone just says we did 5 million in fees for the year or 10 million in fees for the year, whatever it is, but that's just not the number that is available or understood to be the real numbers of business.
Speaker 2:Yeah, I agree, lee. And look, a lot of us have got these things floating around our head. They're kind of like those overheard sayings that we keep repeating as if it's truth. Like you know, 21 days to break a habit, as if that's a scientifically proven formula. Well, you can say it's two days to break some habits and two years to break others. So the evidence is infinitely variable, but it's useful, but it's not the final answer.
Speaker 2:So when it comes to terms like revenue is vanity, profit is sanity, cash flow is king, I think that one there is probably an easier one to at least listen to and say well, what does this all mean? Because I think this has come about from and I'm not blaming anyone for this, this is just an observation that franchise networks have been the majority of the real estate business up until the last decade or so and now it's a fairly even blend. I hear that's around. Let's say that it's about 50-50 independent to franchise, but the revenue that comes from independence might be slightly higher. I'm not getting stuck in all that for now. What I believe the top line revenue figures have become so prominent in Australian real estate, particularly sales, is that most awards are charged on top line revenue, real estate awards. Now why do they charge on top line revenue? Well, because the franchise is charged on top line revenue. It's the percentage of gross turnover. They are a cost of goods sold on every transaction. That's okay.
Speaker 2:I don't have a problem with their business model because they're not responsible for how well someone operates their business internally. They can guide them, but they can't make them. They can't say to the director don't go and play golf or don't buy a nice car on the company account. They can't say don't pay your agents out a higher split than you can afford to pay them, or don't pay your agents out a higher split than you can afford to pay them. Or don't go and recruit this person just so someone else can't have them, even though you don't have a role for them. They can't do all that, so they need to charge on top line revenue.
Speaker 2:But the problem is, unless you are a franchise network, then the top line revenue is hardly relevant. When you've got infinitely variable other areas, like the splits, you pay the agent whether there's a base or not, whether they've got a team, whether they're paying for them, whether they're covering their payroll tax and their own costs, whether they're paying for every little piece of things that they're doing or not, whether there's a sales leader or not, what fees you're charging, what we're recovering from the owner and when we invoice them, all that stuff comes into it. So if we can focus on gross margin in dollar terms and percentage terms, it's a lot easier well, simpler, it's a lot cleaner to then start having a look at the lead and lag indicators that will affect that. So we've got to reverse engineer it from the result that we want and then we've got to come back and say what value needs to be added or created by this role in order to see all that work harmoniously, that everyone's winning.
Speaker 2:Because when we grow the pie, when we make the the pie bigger, which is part of our whole brand premise at presence and at nexar, with a white label operating system that we have for australasia, that we're using for t1 businesses and for presence, which is our sort of flagship offices, comparing to, say, apple headquarters in central park west. That's where we have everything working in practice and you can see it. And nexar is like like the Apple Cupertino, where it's the university and all the innovations going on in both of these businesses. We have to be able to measure all of the key lead and lag indicators. I'm happy to go through some of those with you for a short summary now, if you like, just so we can give more value to our listeners on this highlight episode. Would that be a benefit? Definitely be a benefit on this highlight episode.
Speaker 1:Would that be a benefit?
Speaker 2:Definitely be a benefit. Okay, so I think what we need, organisationally-wide and for any individual, we need to understand the list of properties that we've got listed right now and they've got to be ranked in some sort of way that determines their saleability. So I'm talking about the aggregate pool of I use Traffic Lights in the businesses that I coach and run and traffic lights are green is a listing that if it was a fixed price which it's not, but just where the expectation of the owner is compared to where the agents believe it's definitely worth that, if it was a fixed price at that number and you weren't allowed to negotiate off it and you weren't allowed to spend any more money on marketing that you already have, that it should sell within 14 days and the only thing standing between you and a deal is the logistics of physically taking a buyer there or getting the information to the buyer, because it's that well-priced, the motivation's right, everything's set up for success. So the green listings at any given time in a business need to be measured on number of listings and they need to be measured on the agent gross commission income that's going to come from that after any deductions come off. This is before they're split, but just understanding if you're paying out a percentage to a franchise network, if you're paying out a percentage to a referral provider and if you're paying out a percentage to a backend service provider, all of those costs come off so that you can see what remains. And then what remains can be split between agent and office or the multiple agents within and the office.
Speaker 2:But what remains needs to be more than the minimum budget you need to hit each month to make a margin. So, for example, if you've got a minimum budget that needs to be hit of a million dollars, then you want sort of a little bit of an overflow of that. So if every deal doesn't get done that month, you've still hit your budget. So you want probably one and a half million dollars worth of agent growth commission income combined, that is green, so that you only need to sell two thirds of that to meet your budget and the others will drip over into the next month. Like you see, now the amber will generally be about twice the amount of green, because not every owner comes on the market at the absolute base price or the most motivated price and the agent doesn't usually list them at the base price.
Speaker 2:Everyone's going for the best they can. We represent vendors and then we work buyers really well and then we help the best buyers see the property earliest because they're the likely ones to pay the most. And we either get that feedback and sell it very early in a signature pre-market process or we go public if we're using friendly auction or auction or another sale method and within an orderly period of time we can transact that property. That we can pretty much predict and a great leader needs to be able to predict. They need to be able to predict what's going on in the future and ripple that through all the business planning. They need to be able to over-communicate where we're going and how clear it is that we get there. We definitely need to be able to do those two things.
Speaker 2:So if we've got more green stock than we need to make our budget that month and we've got double the amount of AMBA, then we can allocate our attention accordingly throughout the sales teams. Now each of those sales teams needs to have the same thing more grand stock listed than they need to meet their monthly budget and when they draw a line on a performance calendar system like I use that I've sort of created in our businesses that replicates the meeting rhythms that we use in daily, weekly, monthly, quarterly and annual. Then you can draw a line to when you want that deal done by and reverse engineer the steps that need to happen, and then that can be your focus for each of the days that need to happen on. You can allocate that work amongst teams. Now, if a team doesn't have that allocated at the start of a month, then what are they actually setting themselves up for? Well, they're hoping that a deal will emerge, but they're not taking control of them.
Speaker 2:Creating that deal and the quicker that we can help team members understand that you're either a maker or a taker.
Speaker 2:You're either making a deal happening and creating value, or you're just taking orders or taking a percentage of a deal that was already going to happen. Because if you can't nominate which deals are saleable and are going to happen this month, if you can't nominate it, then you're not in control of it and you're actually relying on external factors for this to happen, like a buyer to call you, or an event order to become more motivated, or a really good open house, or a really good Saturday or some other combination of events that we don't have control over, and we're trying to help people have control, remembering this person has come from being an agent and they might not have known all this themselves. But when you force yourself to take in this learning, what are we really trying to achieve here? It gets clearer. When it gets clearer, then we can get clearer, then we can help others get clearer and we can create our leaders of tomorrow. That is just with the Green Stock Alliance. Now I've got some other stuff here too.
Speaker 1:Lee, but I'm going to take a breath and see if you've got any queries on that, mark.
Speaker 1:That was so advanced and brings into the professionalism of what I wanted this podcast to do, because people speak about only one part of it, and I think we've really delved deep into understanding how serious this role is and how important it is.
Speaker 1:Now, in that breather or you draw a breath there, mark what's the exciting part about being a director of sales? That's someone who may want to study this, and that was my big goal today. You don't just do this, you study it, and if we do run the Becoming a Sales Director Day, that would be an incredible opportunity to understand what is involved, and especially in the reporting and the predictable listings coming in, and how that lead generation role goes across everyone in the company. It's not just, oh, we had a good month because we fluked it or it was a seasonal thing. We're not going to survive with that. But if you were doing this role, what's the exciting part of why you would do the role and what could our listener hope to achieve by making a decision that I'm going to study this and do this properly?
Speaker 2:Like this role has an incredible opportunity for fulfillment. Like career fulfillment, it really goes deeper than just having a job. That's important. Career fulfillment is very closely linked to life fulfillment and purpose and our why. Most of our adult waking lives are spent in a workplace environment, wherever that may be. So, if we can sort of use the concept of what does the world need from us, what am I best at, who needs this around me, and how does this resonate with my values?
Speaker 2:When you start doing this kind of thing, you are contributing to something so much bigger. You're contributing to the development of other people's careers that are in your orbit, and you've had a real part in that. So much bigger, You're contributing to the development of other people's careers that are in your orbit, and you've had a real part in that. You're contributing to the development of a legacy organization like the Rockefeller Habits and Scaling Up and all of these ones that we talk about in Good to Great. You are contributing to that Now. From that you create confidence in your community. People are making good money. They're spending money in the community. You're creating more employment and from there then triples on to people getting better prices, better real estate advice. You're raising the standard in your industry and then others are actually going to end up not performing if they don't hold those high standards. So you're actually raising the bar for everyone around you and creating wealth and prosperity to the community.
Speaker 2:And what it comes back to on a daily level is how you get to see everything docking together.
Speaker 2:You see the eyes light up, you see the organization light up.
Speaker 2:Now we feel like we are in control of our destiny and we all start to hum and it creates this like drumbeat that Lencioni talks about and Van Harnage talks about in those books that I've referred to earlier, where you can set an intention for the quarter, you can set a goal for the year and you actually have a real chance of achieving and exceeding it with you.
Speaker 2:How we talk to buyers like they are a consumer or a family moving through any one of the multiple phases of real estate at any given time, and you stop thinking you're a hammer and everyone's a nail and you need to get them to fit your agenda. To list with me or this result's important to you or you should buy this property. You can actually make some real change, not just in your organization but in the lives of everyone around you and I believe raising the standard of everyone around you and I believe, raising the standard of the industry while we're at it, Absolutely amazing and, mark Kentwell, you've really brought an amazing amount of information to everyone today on a very difficult topic.
Speaker 1:When the producers asked me about this one, I said, yeah, that's a difficult one. Who will I ring? I can't think of four people, and there was four, and without doubt, mark Kempwell was going to be the person to do this session. However, we're actually recording today ahead of something else, and I may as well announce it today whenever this recording gets released. But, mr Mark Kempwell, for 2025, you're going to be contributing to the we Are Selling podcast. Again, you're going to be doing some of these big features that we need assistance on, but also bringing some case studies from the marketplace with what you've been doing with Nexar.
Speaker 2:Yeah, I'm incredibly excited about it, lee, and I'm honored for you to invite me to be a part of this. I've always been passionate about positive change in the real estate industry from the day I got into it and with things along the lines of the friendly option system and what we've been bringing in since then, I really needed a vehicle like Nexar to do that in. And for those who haven't heard the introduction of Nexar earlier, nexar is effectively the business operating system that Presence Real Estate is driven by. So if you look at McDonald's, for example and I'm not saying we're a fast food restaurant, but they have amongst the best operating system on the planet for what they do the operating system is the heart of the business. You can hear that from organizations like McKinsey. That is how everyone does things. It's how we show up. It's our brand. Now you can white label that process, because I needed to white label it.
Speaker 2:I couldn't substantiate the millions of dollars of investment inside presence alone because I'm so conscious of having the margin and the value delivered to our core customers and our team that helped deliver our brand promises. So by going external with Nexar and making its own company around 2020, after many years of development prior. We could outsource some of our services for specialized consulting in property technology. Our biggest fields are client acquisition. So that's where we help a business start to take control of its client acquisition journey and help our team members become converters. So we do a lot of the nurturing and the team do the converting. That then helps, obviously, things like agent attraction, growth, employee value proposition, loyalty and offsetting churn in property management.
Speaker 2:So that's the kind of work that we've been doing. These sales performance systems sit within there, the prop tech that we have sits within there, and really to be able to help deliver what we've been innovating in the Newcastle Lake, la Croix region in New South Wales and now the rest of Australia, since we've been doing this by sort of invite only for the last few years. Next is sort of the words getting out. Now, after a couple of conferences and yourself having me speak at Complete Leader and on your program and I just want to make sure it's readily available for everyone. Even if they're a smaller business that would usually participate in an extra solution, they can at least get the real tools that we've been using in NextR and Presence to outperform the market and create that ultimate of a systemized, scalable, sustainable and saleable business for all of our leaders that we're helping along here.
Speaker 1:And what a great conclusion to today's program. We were talking about tools of trade before, and if someone's a leader or a director of sales, they may not have the knowledge of those areas, but there is a platform like Nexar available that they could learn and be the change agent in the business to implement and roll that out. But they didn't have to spend the millions of dollars and an entire career and thousands of hours of time. And, by the way, mark Kent, well, I haven't met another person with a brain like yours, just for the record, and I've met a few people and what you've done is phenomenal. But for a director of sales, now they could actually have a career because, okay, someone's nutted this out, I'm going to become ninja level at it and roll it out through the company on behalf of my owners, shareholders, whatever it is. That's an exciting part.
Speaker 1:And you talk about career fulfillment, mark. I think the next 10 years of your career will be the best. Yes, you're an incredible listing salesperson. You lead a principal. You've won every principal award for you can win in thought leadership, but I think this is the game changer.
Speaker 2:Look, this is the most exciting and engaged part of my career to date, lee. I definitely have had some transition moments and I think I needed to go through moments of where I figured out where I was best utilized. So I did a lot of work on myself. I did a lot of work with coaches and support I've always had them. But one of the implementations of having really gone into scaling up properly with the guys that were involved in writing a book with Vern Harnish I've personally met with Vern Harnish, alan Meltz from Cashflow Story and a whole bunch of other people that were involved in that book and we are right in it and what it's helped me realize is that I'm actually robbing the world if I don't do the R&D that I'm so passionate about. I literally wake up every morning early and I start working the fives now so I can get that couple of hours of maker time before I start to get on my daily leadership meetings, and I just can't wait to start each day. And this is something I've always wanted to provide something to an entire industry, and we've got to think about the consumers in this process. So I am absolutely passionate about the customer journey. I want to put the joy back in the customer journey of real estate in particular. I want to help businesses, the businesses, the customer journey of real estate in particular. I want to help businesses, the businesses a beautiful place, the tier ones in particular that are creating change in their market and those that want to go with it that are setting a standard in the Australasian industry for the rest of the world.
Speaker 2:So I've moved to Melbourne. I bought down here a couple of years ago. I'm now on a monthly rotation in Newcastle. So when I come back and I visit the offices in person, I do a Sydney visit as well. I'm there for impact. I'm there for doing the things that I have to be there for. But it's been beautiful doing it monthly because as I step away, I'm still working on it every single day. But I'm surrounded by entrepreneurial people outside of real estate in my entrepreneurs network and others that are really extending and really going after what does the consumer of today want and how do we create business models to create success for those that are stepping into those industries in a pathway. So that's where I'm at at the moment. I'm definitely in a contribution phase and a growth phase of my own and I can't wait to keep sharing with this beautiful industry. We've got especially through such a significant program like you've got here on. We Are Selling we, so I couldn't thank you enough for the opportunity.
Speaker 1:Well, Mark 2025, we are putting together even better podcasts, and having you as part of our team is going to be amazing. Thank you for today's program very in-depth, and I think you'll definitely get people wanting to discuss this further. But, Mark Kentwell, thank you for joining us.
Speaker 2:I look forward to getting into the metrics, the ratios, the lead and lag indicators, more on the next version. Thank you very much, lee.