The 80/20 Rule: should it be called the 90/10 Rule?

We all know the commonly known statistic that is the 80/20 rule. Twenty percent of the agents do 80% of the business. The original 80/20 rule is based on work ethic and desire. That is, 20% of the agents in the US have the will and desire to be successful. In recent years, that number has unfavorably increased leaving more agents with less business…and diminished success.

There are a few explanations as to why the 80/20 rule has become the 90/10 rule in just a few short years. Some blame the amount of foreclosures/short Sales on the market, while others blame bank lending. Foreclosures are at their lowest levels since 2007 and interest rates are at historic lows globally as of April 2013. Homeseekers often do not go to an agent for their initial house browsing. They turn their attention to websites and start searching away, without the help of their agent (aka: YOU). Oh, and they find another agent along the way. Digital decision making tears contacts and former clients away from us. What is the problem, exactly?

At this point, we would like to direct your attention to the number of agents using broker provided technology.  Ask yourself a simple question “How many top-producing agents are using the free website their broker provides them?” Upon your research, you will find your answer. (Hint: Not many). Top- producing agents control the inventory. Top-producing agents are the real estate industry. Why? Because top-producing agents have systems in place that maintain relationships with clients, provide a unique value for each contact, and they have removed database attrition out of their business model.


Attrition affects all sales-driven businesses, regardless of size and regardless of the commodity. So here is today’s golden rule. If you only focus on who is going to make you money today, then you will lose sight of who will make you money next year. We call this CHOP. And it is something you need to worry about this year. Make sure you, the agent do not get CHOPed out of the business. 

Here is the breakdown of CHOP.

C- Clients forgetting about you

H- Homeowners becoming curious

O- Other agents talking to your clients

P- Property values increasing

Clients begin forgetting about you. Maybe you have not contacted them in years.  Homeowners (your contacts and clients in your database) become curious. Homes in their neighborhood go on the market and they want to know the listing price. If the home does not have a listing flyer, the next steps usually are: a. homeowner stops by the open house b. they go online and type in the address of the listing. Curiosity creates a potential disconnection from the previous agent if that agent did not sustain a relationship with the homeowner. Not good.

Don’t get chopped out of the real estate business or out of your clients’ minds!

Property values increase. If property values begin to increase and the agent does not have a good relationship (properly nurture that database people!) with the homeowner, then the homeowner will most likely list with someone else (the 80/20 …becoming the 90/10 rule). Remember, every homeowner knows what they bought their home for and what they owe the bank. If their home has increased in value and they want to sell, the question on their mind is “The agent that helped me buy my home, is that the same real estate agent who I will list with today?.” If you, the agent, has not kept in contact (by consistently sending your contacts/clients valuable data) then the answer will be…NOPE. Hence, you are chopped out of the business and out of the 20% (or now 10%). 

It is the CHOP that is the new 80/20 Rule. The new 80/20 means that  80% of your database is going to list with another agent. Many factors cause this to happen:

Lack of Work Ethic, Lack of Preparation, Lack of Desire, Lack of Technology, Lack of Follow- Up, Lack of Response, Lack of Value, and Lack of Relationships.

In a nutshell, the essential habits and best practices that you need to execute on your goals is missing from you business. But, all is not lost. We have to learn from the best. 

PropertyMinder’s tools do just that-they are the insurance policy you have against losing your contacts and clients (and thus you losing your contacts’ referrals!). Your insurance policy is: having the proper tools, strategic relationship-building, adding customized value to each contact in your database, and the follow-up that is needed to make sure your clients don’t blow away to another agent or begin looking for properties on a online real estate website.

Curious to find out more about how our tools do this and why we are that insurance policy? Let us know! 

We hope you are having a great week! Please give us your thoughts and feedback. We relish in a good conversation and want to help you take the steps to success. 

Much success to you,

The PropertyMinder Social Media Team

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