In November 2004, Ray White South Brisbane Principal Dean Yesberg decided the time was right to expand his successful real estate business. A long awaited opportunity had come up to take over the inner-city Ray White franchise and Dean took the unusual step of opening up shop in a retail premises in the heart of Brisbane’s CBD.
In less than five years, the CBD business has grown rapidly. Today Ray White CBD has more than 20% share of the local market, employs 20 people and is on track to turn over more than $80 million this year.
Effective succession planning has been a key driver The Ray White CBD success story. Brendan Tutt first met Dean when Dean employed him as a 19 year old cadet. Brendan worked with Dean as a leasing agent for a year, and then moved into sales for three years in the South Brisbane office. As the first salesperson in the CBD office when the business opened, Brendan worked hard to establish himself in the area, eventually taking on the role of manager two years ago. This year, Dean invited Brendan to join him in the business as a partner and in May the two formally became joint principals of the CBD business.
“It’s important to keep the talent in your business. For someone to really take control, they need to have equity in the business, and to be able to grow with it. It was an intuitive step to include Brendan as a business partner” Dean says.
The pair’s achievements in the CBD business are particularly impressive in light of the fact that the inner city market of most cities is different to other property markets and can be significantly more challenging. First of all, the zoning in cities is generally high density, with a significant number of apartments and units and very few houses, if any. This results in a much lower proportion of owner occupiers in cities than in middle ring and outer suburbs and regional areas and a more transient population of renters. In Brisbane’s CBD, approximately 80% of properties are owned by investors and occupied by tenants.
There are several things that differ from a “normal” real estate business in a market like this. Prospecting is more complicated; letter box drops and cold-calling are ineffective. Marketing in the inner city is also different proposition to other markets as signboards cannot be used, making it harder to create a visual brand presence. On top of that, investors tend to be less emotional than owner occupiers on both sides of the property transaction.
Both Dean and Brendan say the secret to their success is not real a secret - they say they do simple things, but they focus on doing them right and doing them consistently. It’s clear, though, that these simple things are having a tremendous effect on the business.
The first topic that comes up when talking with the duo is their database, which they consider to be the foundation of the business. The most effective way for them to contact prospective vendors is via direct mail and phone calls, so the need for a comprehensive database is critical. Brendan and Dean are currently in the process of hiring a full-time database manager who will focus on growing the database further and working with the salespeople to use it effectively. The team uses weekly emails, regular direct mail and a schedule of phone calls to stay in touch with their customers and provide them with quality information.
Flowing on from the database is communication. Vendors receive twice-daily phone calls and if that sounds like a lot, Brendan says if a salesperson can’t find anything to say, they’re probably not doing enough for their vendor. On top of that, there are regular feedback reports and emails and far from being over-the-top, their customers love it.
“When a vendor is paying us several thousand dollars for service we should deliver a high level to them. We get great feedback about our service - our vendors are never left wondering what’s going on” Brendan says.
The third thing the pair highlights as being fundamental to their success is the auction culture of the business. 70% of all listings in the CBD business are marketed via auction campaigns and the results are staggering. Over the past year, Brisbane’s auction clearance rates have hovered between 20% and 40%, peaking at between 50% and 60% in recent months. Ray White Brisbane CBD consistently averages at around 68% sold under the hammer, with the clearance rate rising to 89% when properties sold prior to auction day or within 14 days afterwards are included.
“We promote auctions because when they’re done properly with a good process, they work - we believe it’s the most effective way to sell property” Brendan says.
When it comes to brand strategy, the business has a large on-line component, with the aim being to dominate the major web property portals.
“As we can’t use signboards in the CBD, we aim to dominate in portals like realestate.com.au. We believe if you can dominate the portals, you will dominate the sales” says Dean.
As the business gains momentum its success is becoming self-perpetuating. The two say they are in a consolidation and growth phase and plan to bed down their success, working with their salespeople to improve their individual market share. At the same time, their success is beginning to attract good people from other businesses, making recruitment easier.
“Someone once said to me the bigger it gets, the more you have to feed it and I believe this is true. We will continue to focus on just doing the simple things well and build on our achievements” Brendan says.
