Last Updated Jun 13, 2011 12:01 PM EDT
In 2007 David Rice launched New Home Star, a Chicago-based real estate brokerage and franchise operation that focuses exclusively on sales and marketing for new homes in the Chicago market. Right around the same time, the recession hit and the city's housing market declined by more than 80%. Chicago's foreclosure rates and decreases in building permits were some of the worst in the country. Rice quickly realized that to survive he needed to expand the business into other markets. So he opened two new locations, in Colorado and Nashville.
While expansion did put him into healthier markets, Rice soon realized that his three staffs ran each location in completely different ways. "It was really stressful," he says. "We were in multiple offices throughout the US and there was something different going on operations-wise at each location."
As soon as Rice opened his regional offices, he knew that he needed to define and systematize his company's processes to maintain brand consistency. He spent months and thousands of dollars building a comprehensive training manual. He expected the branch managers to use the manual to train their respective sales teams. Unfortunately, the inconsistencies continue -- the managers all gave different versions of the training. "We had given our trainers a tool," explains Rice, "but we hadn't shown them how to use it. A manual cannot stand on its own."
For some time, the issue went almost unnoticed. Given the countless variables involved in home sales, it was impossible for Rice to identify, on paper, the effect the training had on home sales. "Unfortunately, it's not really calculable," says Rice. "It's hard to attribute someone's success or failure to their instruction simply by looking at numbers."
After Rice visited his remote branches over the next year, however, the problem became obvious. He noticed, for example, that associates neglected to ask potential clients about their experience with the New Home Star website. "It's one of the first things we do in a sale," he explains. "It's a way of getting clients talking, figuring out how much they know about the company and helping us determine how to approach the sale."
He had laid out this strategy in the training manual, but most of Rice's sales associates weren't using it. Trivial as the question may seem, it's a critical part of the sales process. "Neglecting small details like that can cost us the sale and potentially tens of thousands of dollars," says Rice.
Rice realized that if he wanted his sales staffs to reliably use his processes, he needed another manual to essentially train the trainers. "We ended up taking people out of the field to help construct a new guide that teaches our managers exactly how we want them to instruct their sales team."
He also developed a series of tests to evaluate the success of the training. At the end of each training module, both the instructor and Rice can use these assessments to mark the progress of each sales associate.
He now has tangible evidence in the form of exams and a new software system that monitors sales remotely from his base in Chicago.
"We now have a way of quantifying that progress, which previously was impossible to do," says Rice.
By developing his manuals and refining training methods, Rice has created a package that he says he could parachute into any market. "Someone with solid initiative could go through our one-week training and manuals, plug into our portal, and be running their own New Home Star business almost right off the bat."
Rice also recognizes that the efforts to define his company's processes and communicate them effectively to his staff have increased their expansion capacity. He now has operations in 11 different markets and aims to reach $5 million in revenue this year.