The oddest thing happens when you call Stephen Shapiro.
He picks up his phone.
Something similar happens if you e-mail him: He responds within minutes.
It’s not just the salesman in his blood; it’s part of the basic philosophy on which he and his partner, Kurt Rappaport, founded Westside Estate Agency Inc. No assistants, no secretaries. Just the basics, please.
Wouldn’t you do just the basics if in one decade you could build your company to $1 billion with four employees, two offices and about 50 independently contracted agents?
Shapiro, WEA’s chairman, has seen how the big real estate agencies do business, and he’s not impressed.
“I don’t think I can be delicate,” he says. “They basically have sales managers that are failed salespeople and they follow a book of rules and become lemmings to the corporate entity and they have to do A, B and C in order to get to D, and everything is very predictable. They have training programs that teach you how to fill out forms as opposed to working with us, where we teach you how to make deals. We are the last of a dying breed of salespeople.”
So when Shapiro and Rappaport opened their high-end agency, they didn’t want to build up a 10,000-employee representation of corporate American bloat. Already the two premier agents in the area — with a client list filled with people you wish would come to your birthday party — they focused on high-end sales and nothing else. They refused to dip their hand in any other businesses and built off a foundation of staying in constant contact with their clients, helping every employee become immediately productive and never forgetting where they made their money.
Here’s how WEA built up its business without being held back by bloat.
Don’t forget where you make your money
So you think it’s time to grow your company up and out. It’s only natural that you add more support staff and more offices. Maybe it’s even time to think about dabbling in some auxiliary businesses. After all, that’s how you grow, right?
To Shapiro, that’s where you start down the path to bloat. WEA has one focus: high-end sales. Everything else is overhead.
“We specifically targeted a market, understanding our goal was not to grow and open multiple offices like a Coldwell Banker or Prudential but deal in one specific market, which is a high-end,” he says. “We realize that we’re not going to have offices with hundreds of people; we’d rather have offices that specialize in the market we wanted to capture.”
Shapiro understands that there is money to be made by putting his hand in escrow and other businesses, but once you start mixing businesses, you’re compromising your core success.
“The other thing that (the large companies) did, they got into auxiliary businesses, they got into escrow, they got into title, they got into lending,” he says. “The commission became less important to them and what they did was force-feed the agents the necessity, ‘You have to make your deal through our escrow company, you need to write our title company, you need our loan company.’ To me, that’s just wrong. If you’re selling somebody a house for $20 million, that’s where you make your money. … When you’re transacting numbers like we do, that’s your primary focus, not your secondary focus.”
To Shapiro, it’s more about keeping his company’s focus tight. You can have higher returns with experts making you No. 1 in one field than by having thousands of employees muddling through several businesses.
A smaller, narrowly focused staff also helps with the next piece of advice Shapiro can extend: Stay nimble and you can excel through technology.
“Another problem of large companies is that when they make a technology change they are doing it for thousands of people, so they’re reluctant to do it,” he says. “And they also put it off because they know that whatever changes they make today, that technology will be less expensive in a year, so why don’t we wait a year, not understanding that in a year there is going to be newer technology.”
From the first generation of BlackBerrys to current phones that turn office voice mails into e-mails, WEA spends top dollar to make sure agents are in touch with clients. Spending on technology creates a more productive employee and can cut overhead costs on extra time and people saddled by old technology.
“We want our people to be available at all times,” Shapiro says. “It has changed the business that when somebody e-mails me, I immediately respond to them. Their conclusion is that they are very important to me.”
If you want to grow without bloat, you can’t have employees who are sitting around for two years waiting for a promotion. You have to give them a chance to succeed immediately.
“If you don’t get down to the younger ages, then you’ll never grow because that’s where your future business is,” Shapiro says.
So WEA looks for moderately experienced agents tired of those suffocating big companies that have a good set of contacts in the business and immediately lets them sell on the lower end of the company’s spectrum. But while he wants to throw his new hires right into the mix, he doesn’t let them run wild with their $1 million and $2 million deals and put his company’s reputation in jeopardy. Shapiro and other top agents will give smaller clients to younger agents and then subtly check up on them.
“A couple of weeks ago, I had somebody who had a house that was probably worth a million and a quarter and they called me and I said to them, ‘You’ve been a friend of mine for years, I, however, am not the right one to help you,’” Shapiro says. “So I went up to visit them with my son, who is now 25 and has been in the business five years, and he knows that market far better than I do. So I come up, I introduce, I make sure I’m copied on all e-mails of communication so that they feel I’m not the hands-on person, but I’m standing above looking down on their transaction.”
By simply checking in on the communications going on, it’s pretty easy to see if things are going down the right path while letting a person grow. It’s also easy to see if that person is ready to move up to the next level.
“As you move up in price range, that person that’s now averaging a $3 million sale will, instead of saying no to a person for $1 million, bring in one of the lower people in the office and turn it over to them and oversee their deal,” he says.
That creates people that are never in such a silo that they can mess up a deal because of inexperience. At the same time, you can let someone go on his or her own, acting more as a lifeguard than a swimming instructor.
“They know that they always have someone to come to,” he says. “I’m in the office at 8 o’clock in the morning, and if I’m not out showing property, I’m in the office. So either Kurt or I are always here to answer specific questions, so they’re not just thrown out and told, ‘Here’s this listing for a million and a quarter, go do it.’ They’re coming back and saying, ‘This is what happened; that happened. What do I do when this question comes up?’ so they’re getting specific, hands-on help.”
Pick up your phone
Shapiro has a major pitfall you should avoid if you want a company built on quality over girth: Keep egos — including your own — in check.
He laughs it off now, but Shapiro was a bit of an ’80s TV star.
He did interviews with “48 Hours,” “20/20,” “The Today Show” — you name it. A young power agent selling homes to big-time stars, he got caught up in it. But a fateful phone call helped change his mind. Naturally, that call went to his secretary.
“I would have a secretary answering my phone and giving the standard bullshit line, ‘May I tell him what it’s involving,’ — which I hate,” he says. “What do you think it’s involving if somebody’s calling a real estate agent? So I’m in my office and my secretary buzzes me and says Kirk Kerkorian is on the phone, so I assume it’s his secretary. I pick up the phone and it’s Kirk Kerkorian making his own freaking phone calls.”
Kerkorian — a self-made billionaire, who is known as one of the important figures in shaping the city of Las Vegas — and Shapiro built up a client relationship, and Shapiro learned something new.
“He told me that the most important thing you can do is get back to your client very quickly, and he suggested that you should get back to your client in an hour or two,” he says.
Since then, Shapiro has never felt like his ego was too big to pick up his phone.
“I return all my calls,” he says. “I answer my phone myself, and now, in a world of direct-dial phone numbers, why do you need somebody to say, ‘Hey, it’s Mike on the line.’”
It’s only natural as you grow that your stars will think they need secretaries or additional staff. But Shapiro evaluates the situation on a very basic level.
“If you’re not owning a business, then you don’t have any of the back of the business to run,” he says. “So all you’re doing is showing property and trying to make deals, and how many hours a day are you actually doing that? Why do you need two or three people between you and the client? If you’re in sales today, your job is to sell. And in order to do that, you need to talk to your client.”
That led WEA to build up around a simple principle: You answer your own phone; you handle your own clients.
“Unlike the larger companies, where when agents started to make a little bit of money they gave them money to hire assistants, we do it ourselves,” he says. “We take what we can personally handle, and we show our own properties.”
To Shapiro, secretaries and assistants are about bravado. But if someone calls you, he or she expects to talk with a person that knows the answer — even if you are handing that person off to a younger employee, that person wants your guidance.
“It’s the ability to have your client understand you’re the expert in your business and they need to go no further,” he says.
“I tell my clients I’m reachable except when I’m sleeping. What Kirk taught me was accessibility and response to the client — make the client feel that they’re the most important person in your life.”
From 8 in the morning until 10 at night, Shapiro is on call. He responds to everything — requests regarding jobs, internships and out-of-market real estate advice. He recently took a call at 10 o’clock at night from a client seeking advice for an employee searching for a $400,000 home.
“So this is what I want,” he says. “I want him coming to me for anything dealing with real estate. So at 10 o’clock at night, I’m sending him an e-mail back and he’s sending me an e-mail thanks. … And the guy led off saying, ‘I know you don’t do this kind of business, and I hope I’m not bothering you,’ and instead he got the correct answer.”
And if your chairman is doing that, your company will be seen as a mainstay in the industry and your employees will see the way to treat a client or customer.
“(Employees) see that it’s not bullshit, the boss is doing that — this is how he does business,” he says. “And if I go and look at the people that have come here that have become successful, and see how they’ve worked their way up, they all do it the same way.”
How to reach: Westside Estate Agency Inc., (310) 247-7770 or www.weahomes.com