When Agents Fail, They Need You Most

The leadership style you may rely on for motivating your team may backfire. In fact, it may inadvertently be causing some underperforming agents on your team to dig even deeper into a sales rut and fall into a trait that researchers call “learned helplessness.” This particularly holds true for newer agents, according to a study on sales performance failure and how managers’ leadership styles can combat it.

You can greatly influence your sales associates’ perceptions of failure and how they end up responding to it, says Jeffrey Boichuk, lead author of the study and assistant professor of commerce at the University of Virginia. Boichuk and co-authors Zachary Hall and Michael Ahearne analyzed how sales associates at a furniture retailer responded to failure in meeting sales goals. The research team then applied their findings to the real estate industry, as outlined in a 2016 Baylor University Keller Center Research Report.

The study suggests that brokers and team leaders who adopt a more reflective “error management” approach will be more successful in helping their sales associates bounce back after failure and avoid the despair of falling into learned helplessness.

Learned helplessness is when increased pessimism results in feeling defeated and can make salespeople more likely to quit within their first year of work, lose persistence during their customer interactions, or even put them at greater risk to engage in unethical sales behaviors. Rookies in the industry who fail to meet sales quotas, for example, may be particularly vulnerable to adopting pushy, sales-oriented behaviors (such as continuously trying to convince buyers of a home choice that really doesn’t take into account their full needs or desires).

How can you adjust your own management style to help encourage new agents to overcome sales performance failure? Here are a few ideas from the study: 

Keep your expectations in check.

The reality is 50 percent of salespeople fail to reach their annual sales targets. “It is not a question of whether real estate professionals will experience failure but when and how often bouts of failure will happen,” Boichuk notes.

Especially for new agents, the stigma of missed sales goals can become a heavy burden. New agents often strive to impress their colleagues and want to have a strong start in the industry. But managers and associates alike must realize that a few failures along the way can actually prove beneficial.

Stop relying on traditional leadership models.

One of the most widely encouraged leadership models that managers use may not be effective in motivating agents or employees after they fail, according to the study. There are three main components to the popular “transformational leadership” style:

• Articulating your vision for your sales team and then using it as motivation for your team.
• Acting out this vision and serving as a role model in achieving it.
• Fostering group goals and garnering acceptance as a team toward these goals.

“You would think this is a good strategy for selling and for meeting sales quotas,” Boichuk explains. But over time, it doesn’t work for agents who have experience multiple failures in sales. Once a sales associate fails, they deem these claims as demotivating. They believe: “This vision is great, but I’m unable to achieve it myself.” Or, they see others achieving this vision but they don’t feel they can, Boichuk says.

While the relationship between failure and transformational leadership may be effective in the short term, “it has a diminishing effect when incidences of failure accumulate,” Boichuk notes.

Position failures as learning opportunities.

With an “error management” leadership style, every incident of failure by a sales associate is framed more positively as a learning opportunity. The sales associates are encouraged to take a failed transaction, for example, as an opportunity to pinpoint what went wrong and how they can approach it differently the next time.

A customer satisfaction survey may be one way to help pinpoint areas of growth for the agent. Encourage agents to do a post-transaction customer satisfaction survey or even one with hesitant prospects.

“It could be an incentive for an agent to always maintain a customer focus,” Boichuk says. “With this, you are reinforcing and incentivizing the right behaviors rather than just the sales performance.”

Promote exploration and a long-term view.

Taking it one step further, managers can also downplay the agent’s failures in the short term and encourage a more long-term view to measuring success.

“Long-term is not thinking about the success of today but what will set you up for success in six months,” Boichuk says. That could lead to a path of exploration for the agent to improve their skill set, such as in learning how to become more customer- or question-oriented in a transaction.

Agents also may identify skill sets that they do not feel confident in and wish to pursue additional training to become more proficient in an area. Courses are offered by REALTOR® University and real estate designations and certifications offer training in multiple areas of a transaction.

Let newer agents know that for long-term success, they must be willing to experiment and try new things early in their career to see what works best and better identify what doesn’t.

“Newly hired agents should not be afraid to make errors,” Boichuk says. “Help them to realize that they’re doing this beyond just the transactional benefits of making a sale. They’re helping to fulfill a larger purpose in helping to make the community a better place and helping their customers find the best home.” That mission goes well beyond meeting any sales metric but may be more motivating to helping those associates who do fail to then get back up, grasp the valuable lesson from it, and try again.