Why You Should Never Prejudge a Sales Prospect

As every experienced salesperson knows, you should never predetermine who will be a big sale and who won't. If you do, you just might miss out on the biggest sale of your career.

Opinions expressed by Entrepreneur contributors are their own.

In their book Success Secrets of Sales Superstars, sales experts Barry Farber and Robert L. Shook interview 34 industry leaders to discovers the sales moves that took them to the top. In this edited excerpt, the authors offer a first-hand account from David Liniger, co-founder and chairman of the board of RE/MAX Realty, about the importance of never prejudging a prospect.

RE/MAX had only been selling franchises for four years when I received a call from Sid Syvertson, who, with his partner, had one of the largest real estate firms in the U.S. Their company, Spring Realty, had about 1,000 agents with offices throughout Los Angeles.

Sid called to tell me he was interested in buying a RE/MAX franchise. I said, "Sid, You're ten times our size, and I have fewer than 100 agents in California. I don't understand why you'd consider a RE/MAX franchise."

"My plan is to convert all my offices and agents from the commission-split system to the RE/MAX format," he replied, "and we'll have between 15 to 20 franchises."

I didn't take him seriously, figuring he was doing some competitive intelligence to find out how to compete with us. "Sid, I'll send you some information," I said. "Call me back if you're interested." I didn't bother to pursue it because I thought it was a nonsensical lead that would go nowhere.

A week later he called again. "I like what I read, and we're interested," Sid said.

I thought it was just a joke. Again I put him off, saying, "I'll get back to you, Sid," thinking he had ulterior motives.

He was persistent and called again. "I really want to come to Denver to see you, Dave."

"Sid, we're headed to Toronto for our summer leadership conference," I said. "Why don't you and your partner be my guests? You'll have an opportunity to talk to a couple hundred of my brokers from the United States and Canada. If you're still interested, you can give me a call."

They came, and I was busy every minute, so other than shaking hands with them and saying hello, I didn't spend time with them. I thought I'd never hear from Sid again.

A few weeks later, my secretary walked into my office. "There's a Sid Syvertson from Spring Realty in the reception area. He said he'd like to see you now."

I cordially greeted him and said, "Sid, what can I do for you?"

He didn't say a word. Instead he took a certified check for $250,000 and slid it across the table. He said, "Dave, I don't want to just buy franchises. I want to buy the California region."

I was in total shock. A quarter of a million dollars was a huge amount of money to our company at that time. I knew that if he bought the region, we'd end up with 200 of Spring Realty's top producers, which would be double the number we already had.

I looked at him in amazement and said, "Sid, I don't understand. We haven't been successful in converting even small real estate offices that have 10 or 15 agents, and you're talking about converting the biggest thing in our history. Why would you want to do that?"

"Dave, would you mind if I used your phone and put it on speaker?" he asked. "I want to make three calls and want you to hear the conversations."

He called Rich Port, who owned a firm about the same size as his that was the biggest in the Chicago area. Sid asked Port, "Tell me about this RE/MAX franchise network. I know they've been in Chicago for awhile, but they're not a factor in the California real estate market."

"It's amazing," Port responded. "RE/MAX came here about five years ago, and we laughed. The first year they opened a couple of franchises. The next year they opened four or five more, and we were thinking, 'You know, they're just another Century 21 or ERA. But in the last year or so, they've become number one in the market, and I'm losing dozens of top producers to them. I don't know how to compete."

When Syvertson hung up, he dialed a big broker in Atlanta and had the same conversation. His last call was to Sven Nylund, senior vice president of Van Schaack & Company, a major competitor in Denver. Syvertson asked, "What can you tell me about RE/MAX?"

"We had this young kid, Dave Liniger," Nylund replied, "who kept talking to us about converting to this commission concept. He said it works like a co-op and is modeled after a group of doctors or lawyers who share the expenses of running the business, pay their personal expenses, and keep the vast majority of their income for themselves. He said Van Schaack should do it and go national with it. We didn't think it had any merit, so Liniger went out and did it on his own. Five years later, he had 300-plus agents and was number one in the Denver market. Soon we were losing dozens of top producers to his firm. We don't know how to compete with him."

Nylund paused and asked, "Why do you ask, Sid?"

"I'm negotiating with Dave to buy the California rights. I'm going to convert my offices," Syvertson said.

"If I were you, I'd do it," Nylund said.

It was a gutsy call for Syvertson. But over the next 20 years, he built a huge empire with hundreds of offices. In 2007, our organization repurchased his company for more than $100 million.

The conversion of Sid's firm gave our company tremendous credibility. It made the entire real estate industry stand up and take notice. He was definitely a major catalyst that contributed to our success over the next several years.

Robert and Barry's Comments
As every salesperson is taught early on in his career, never prejudge a prospect. Liniger thought that a highly successful prospect like Sid Syvertson wasn't really interested in his marketing concept but instead wanted to learn about his company to compete against him. As he points out, "The lesson I learned was to be open-minded. It taught me to never stop working all the angles of my market. If you do, you'll never get the big hit that I got -- the one that really put us on the map."

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