Top Real Estate Strategies Email Newsletter

Interview with a Top Producer:
Craig Lerch Jr.

Speaks Out on Creating An Amazing Real Estate Business

Lerch & Associates Real Estate, Philadelphia, PA
2001 VOLUME: $24 Million
AVERAGE HOME AMOUNT: $100,000
SOFTWARE: Microsoft Office and Online Agent Software, Contact Manager

Editor's Note: Since the publication of this article, Craig has opened two more offices. His 2006 volume was $40 million, with an average home amount of $300,000.

Boni Lonnsburry: Craig, where would you say your business comes from?

Craig: 60 percent of our business now comes from referrals and past clients. We have an important philosophy within our team - to give "World Famous Service." Using World Famous Service we try to provide our clients with everything, not just customer service. By providing World Famous Service we give people what they most want, for example, if we tell them we'll have it for them in 48 hours we give it to them in 24.

We strive to be World Famous in our market knowledge, our dealings with different people, our dealings with people who have vastly different personalities and so on. There is a golden rule that says you should sell to people the way you would want to be dealt with.

But then there is a platinum rule that says you sell to people the way they want to be handled. If a person likes red roses and they send you a referral why would you send them daisies? Daisy's don't mean anything to them so send them red roses!

Boni: Your Contact Manager probably has a lot of information about your clients?

Craig: Our Contact Manager knows their favorite sports, every birthday, every anniversary, their favorite colors, the decor in their home, their personalities, whether it be a "B" an "I" an "S" or a "Z" - which is a breakdown of people's various personalities and different forms of classifying people in personality traits. It classifies their colors, their favorite flowers, their favorite food or restaurant - things like that. We work at getting to know them better. The more we know them, the more they know we care.

In fact every person who comes in our office leaves with a carnation - whether it's the Airborne guy, the mailman, whoever - we ask them if they would like one. We actually run outside to give carnations to little kids, as they walk by, to give to their parents.

The bottom line is as a team we play, we are there, we are in the present and we are getting involved with our customers. At the same time we have fun with them. We take our job seriously and our business seriously, but not ourselves. We don't let the stress bother us - like water off the duck's back.

If a client calls, it is always, "It's my pleasure!" type attitude. No matter what the problem is or how bad it is. No matter who on the team gets it - they jump through hoops to make sure that person is dealt with that day or it comes to me.

Boni: No wonder you get 60 percent referrals!

Craig: And it's growing. Last year we did 243 sales total, this year we've done 140 in the first quarter!

Boni: How long have you been in the business?

Craig: 12 years. I worked for a family company and a franchise company for 11 years, and March of last year, I took the team I was working with, within the company, and started Craig Lerch Jr. and Associates. We did it because it was tough to give World Famous Customer Service when we had people who didn't agree with the philosophy in the company - not everyone wants to give World Famous Customer Service.

There are the mega brokers and then there are the boutiques. I can't compete against the mega brokers and I can't say that I am number one in sales. I'm never going to beat a guy that has a seven franchise operation.

But I can be the best in customer service and I can be the best in negotiations. People come to us because they want to deal with us. They want to know that we are going to jump through hoops to service them.

Boni: Where does the other 40 percent of your business come from?

Craig: 40 percent off our signs and believe me once we get the signs out people call. We also adopt our clients, we fill them in and let them know that we have a free moving truck and they are welcome to use it whenever they want, for charity or whatever, forever and ever.

The truck is out 20 out of 30 days a month and it's labeled with our picture on the side, telephone number and things of that nature, we have the beetle bug that sits right next to it with a tiny endorsement, labeled the same way. But we will probably be getting another truck at the end of the year because it's out so much.

About 10% of our business comes from giving cards out, all day long to everybody and anybody. We're constantly asking for business. When we list a home we make business cards of the house and customize them with a picture and description below our business card on the back. So people just come up and say, "Oh! I got a card from a house that somebody left in the drycleaner."

Boni: How did you get started in the real estate business?

Craig: My family was in the business. They've been in the business for 40 years, my brother, my sister, my stepbrothers and me. I got into the business 10 days after I graduated college back in 1989. So when people ask, "How long have you been in the business?" I answer, "12-13 years." But really my whole life - I think from osmosis in my mother's stomach. My father still owns a major brokerage company in the area with 4 offices and over 100 agents. Two different mindsets, one is the boutique and one is the mega company. I don't know what else I would do besides real estate.

Boni: When you look at agents who are just getting started in the business, what mistake to you typically see them make?

Craig: The typical thing they do is listen to everybody who isn't doing any business, or who is being negative or who isn't really working at it. In this business the biggest problem we have is we play often and we don't work.

If we were belly to belly with buyers and sellers and negotiating contracts 40 hours a week, we would have more money than you could ever count, like if we were prospecting 40 hours a week, but we don't. We play "shuffle the priorities" and let's go over here, let's have coffee, and all those things.

If those people spent their time prospecting and asking for business from friends, relatives, aunts, uncles, previous clients and so on and provided their clients with unbelievable customer service, they would catapult through the field.

Boni: That sounds pretty simple to implement.

Craig: It is simple. This is a simple business, but unfortunately we make it difficult, because we're so negative. We say we can't do this, it doesn't work here. That's a mind set we have set up (at some point as children). If you go through life in the real estate business being brand new, with no hindrances, only learn the best, get a coach and get good training, invest the money in getting to your destination, you are going to grow by leaps and bounds.

The problem is we don't view it as a business. We don't view it as a profession. We view it as a job. The job is something that you go to every day, but if you don't work, you don't get paid. A business is something you can walk away from that generates income while you are away.

Boni: So how would you recommend those new agents prospect?

Craig: First of all they should get a list of the top 100 people and the places they know. They should send an introduction letter and then they should begin calling them. They should be calling these people every two weeks for the first 6 months. And then they should be calling them every month for the next 6 months. And then they should be calling them every quarter for the next 6 months, and then they call them every 6 months for the remainder of their life.

Boni: How else do you keep in touch with your past clients?

Craig: Our past clients get a newspaper which is 14 pages full color. Every person in the family gets a birthday card, which also has a coupon for a birthday cake at the bakery.

When they turn that in they get the cake, which is great because if they don't use them we don't get billed. But if they redeem it, they will usually buy other things at the bakery too so the baker loves that of course.

They get anniversary cards and phone calls from me at least once or twice a year. They get their settlement sheet on the 10th of January for their tax preparation. We probably contact them 12-15 times a year.

Boni: When you look at veteran agents, do you see them making different mistakes than the newbies?

Craig: Yes, the number one problem is they don't want to change. They don't want to believe the industry is changing. I look at these young people who are coming out of business school that are mavericks, and they go out and get business loans and they are going to make money.

They're out there spending money, taking university courses and going to coaching courses. Most executives will say that the best thing they ever did is getting a coach. A personal coach is $1,000 a month if you have a good one. Yes, you can get them for $200, or $250 a month, but a good personal coach is $1,000.

These guys are saying, "NCAA football players all have coaches, why shouldn't I? If I want to be a superstar I need to have a coach." The coach helps them plan for their mission statement through the balance in life.

Also they fail to get the knowledge to go to the next level because they don't want to change. And they believe that the business is always going to be there.

Boni: If you had a son or a daughter entering this business, what advice would you give them?

Craig: Hopefully I will have my two sons come into the business with me some day. I would tell them to understand that there is a system that needs to be used and they need to know the system, know the people and understand the people.

Don't take rejection badly, just take it as a given and go on. Be the best; be as knowledgeable as possible, and market as quickly as possible. Don't try to recreate the wheel, find somebody who has been successful and duplicate it. Lexus didn't do any better with a car -they just took a Toyota, knocked it off, and took it up a notch. Toyota didn't do any better than Ford; they just kicked it up a notch.

Just take the wheel and tweak it each time. Each time Bill Gates comes out with something new, he didn't take something new - he just took something somebody else had, bought it and tweaked it. Take whatever everybody else is doing.

Jack Walsh is the perfect example; he says the best way to find out how to get better is to watch what the competition in every business is doing. I think the number one thing most agents in this business don't realize is, if you ask them who their competition is they say "ABC Realty" "John Smith Realty" "this franchise and that franchise." That is not their competition. Their competition is FedEx. Their competition is the Ritz Carlton. Their competition is all of these major companies.

Toyota and Lexus - that is their competition. Those are the people that are raising the levels for customer service. That is what I would teach somebody brand new coming in. This is a worldwide competition.

Boni: Making your real estate experience thrilling.

Craig: That is our company mission statement. Everything that goes down is designed and committed to by everyone our team. There are exclamation points. There is no negotiation. We ask people, "Did we meet your expectations and always meet your expectations as the whole transaction was going on?" They are saying "yes" we always have.

Boni: Have you ever had them answer anything that you just were not willing to provide?

Craig: Yes, and I have said to people, "Unfortunately there are values, that I have to live with, we would love to do that for you, but I have made a commitment to my team, my industry, my family, my children and I can't do that." Sometimes it is better to walk away.

Know your values and live by them. Clients should know what you are going to give them and they should know how you are going to give it because you explain it to them. If you explain to people what is going to take place and how the expectations are going to be met as long as they understand them, you're OK. But then you exceed them - like I said do in 24 hours what you said would take 48 hours.

Boni: What was your most successful marketing campaign?

Craig: We classify our solds as our marketing plan. That is our number one thing - we get them out and let everybody know about it. We use a half of a sheet of 11 x 8 ½ papers. We use cards that are not the standard postcard size. Color printed on both sides, we do them in-house with a color printer that you can get through Xerox, colorprinter.com and the ink, is a high gloss, wax printed, raised print, double sided paper that we've got and we use that on everything. But the number one marketing tool that I think we benefit from is the quality of everything we do.

Boni: And you send out your "sold cards" to a geographical area?

Craig: We send to 200 people around the area of the house that was sold. And if we have done another one in a month or two, we add that to it. So if we have sold a home within a month, within that same realm of people, we hit them again with that same card.

So we would put two homes on there and sometimes we will even have four. So they have been hit with one house four times, another one three times, and then two times and one time. They are seeing the numbers that we are doing in their neighborhood and that is our number one thing, with the least amount of money that we have spent.

Of course the best thing that I think we do is the moving truck. The whole thing is labeled, it has our picture on the back, it has writing all over it, churches, charities, different clients - it is everywhere. It costs us about $1,000 a month including the insurance.

It's a huge benefit! The only thing that I would change is, if you are going to label it, label one side one way, and one the other. So people think you have two trucks.

We also do a local thing with one of the elementary schools. We have our own custom balloons that we have made and we will fill the whole back of the truck with balloons, probably 500-600 balloons, and it is so fun! We will pull up with this truck full of balloons, and we give one to every kid so there are a lot of balloons and lots of kids running around.

Boni: How often do you do that?

Craig: Once a year, there is also a Spring Fling in the area, and we'll go to a couple baseball games - to give balloons to the little kids in the area. You have to give to get. The more you give the more you are going to get.

I do a lot of reading I set a goal three years ago to read 36 business books, last year the goal was to read 50 business books and I did. This year my goal is to read 102 business books, two books a week. I am on that pace, to meet the 102.

Boni: What are your favorite two books?

Craig: For building wealth as an agent, because again we are in the business, and we can't build wealth for other people if we are not building wealth for ourselves... "Rich Dad, Poor Dad" by Robert Kiyosaki.

I have actually bought the books and given them to clients. And now they're buying real estate because we have price ranges from $40,000 - $50,000 in our market place. So people can buy, and it works for them.

I buy the books and give them to my clients and say, "Look what you can do with real estate." It was a $12 investment, but I have given 10 books out, and I have probably sold 10 houses from it. I spent $120.00 and made over $30,000.

Boni: What is the other book?

Craig: I am going to have to say Keith Herrald's "Attitude is Everything." The bottom line is sometimes the market isn't the problem, sometimes the client isn't the problem, sometimes the family isn't the problem - sometimes you are the problem.

As I read my books my whole team reads the books. So they know where I'm at. My whole team is reading "QBQ" they rotate it around. My whole team read "Disney Inside the Magic Kingdom: 7 Keys to Disney's Success." Everybody has a role, a character, a script when they're at work. But you can't be Cinderella and Goofy at the same time - it just doesn't work. Be where you are. Be in the present.

If you are out with clients give them your full attention. I was out with a buyer who had talked to 4 or 5 agents and had been out to see different homes and different properties in a city that I didn't deal with.

When he was out with me however, after the first day he said, "Craig, I am going to buy a home from you and let me tell you why, you gave me undivided attention. When I got into the car you asked, 'Are you expecting any emergency calls that would require me to leave my cell on?' And I said no. And you said, 'Fine, then I'm turning my cell phone off while we are together.'

I don't take other calls, I don't answer pages, you won't hear the beep, and they won't hear the phone ring. The bottom line is I am in the present. You don't go to a doctor and listen to the doctor talk about other people. You don't go to a lawyer and listen to the lawyer talk about other people. So why in the world would I do it? We think we are too important. We think people cannot survive without us. Guess what? They can.'"

Boni: If you had a magic wand, what would you change about your business right now?

Craig: More business is always great. I would say more business or letting more people know about the service that we give. How would I do it? If I had a magic wand, I would have my treasured present customers read even more about the business we are doing and recommending us to more people.

When businesses look at their budget they say, "I can't afford to advertise, I can't afford to do this and that." How expensive is it to have a client recommend you? It's free.

If you give them unbelievable service and you do something nice for them they are going to do it back for you. That is the cheapest form of advertising.

People say I can't afford to market in my market place. You just aren't choosing to do it in the right place. You aren't asking for their business. My goal is to give out over 10,000 business cards a year minimum.

Give them two cards, three cards whatever it may be. The more cards on the street the better - who cares, they're free. Ask for business! Be persistent but don't badger people about it. The way I go about it is I will say, "John, you know our product and how we help people with their real estate needs. Who do you think could use our 'World Famous Customer Service' for their real estate needs? You know anybody who wants to buy or sell a house?"

Boni: It is a whole different mind set.

Craig: The more you tell people you want to help them and exceed their expectations in life, and the more you learn about them and care, the more they are going to give. Goals are things we all set but I don't view things as goals anymore, I view them as projects. When the heart surgeon sets out in the morning, he knows he needs to do a heart operation that takes eight hours, if it is one minute over the person is dying. He doesn't have an option, it's not a goal, "Well, if I don't make it, oh well, I'll go home, and they will die." That is a project. We need to view everything that we do as a project, if we don't make it we die. End of story, not negotiable.

The difference is that people think of glass as being sharp. And they look at the glass shield as being sharp, if I break it and I put my hand through it, I could get cut I could hurt, so I am not going to break the shield. I am going to look but not get too close.

I look at it as - there is my project; the ceiling is a glass ceiling but it's like a Hollywood glass ceiling. They don't use real glass; they use plates of sugar water. So don't be afraid of the glass. Put your hand through it, it is not going to cut you. There is a great book, "Dancing with Tigers", and it talks about the fear of going to the next level. There is so much real estate in the market place in this world that everybody can do well.

If you just do what you are supposed to do.

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“People don’t want to be “marketing TO;” they want to be “communicated WITH.”

– Flint McGlaughlin

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