As founder and president of DOMA Properties, Scott Hamilton usually saw about 100 people coming in each week, but in 2007, that number suddenly dropped to about 25. Sales went from 12 to 15 a month down to just two or three.
“It was interesting,” he says. “It was almost like somebody had turned a faucet off. … It was a big drop off, so it became pretty clear that something needed to change.”
Hamilton decided that the company needed to buckle down to weather the downturn.
“It forced us to adjust very quickly,” he says. “… We didn’t have the luxury of stopping and waiting for something to happen. We actually had to react to the market immediately.”
So he made some tough choices and got closer to customers, and as a result, Doma had $50 million in 2009 sales.
Smart Business spoke with Hamilton about how he led the company through the downturn.
What is the key to successfully leading a business even in a down economy?
Through a lot of hard work that’s for sure. The key to our success was to be adaptable to the changing business environment and also to put your nose to the grindstone and work as hard as you can to get to your end goal. We’ve also always done things, even when times were easy, we have always done sort of the proper sales methodology, so we didn’t have to change our sales programming. We did have to work harder at the types of businesses that were made available to us, like the foreclosure business for example.
One of the benefits of being a small business is you can be flexible and change your business model if you need to. In our business, some have struggled with this kind of changing real estate. We’ve actually been pretty quick to adjust to the changing market. I don’t know that we could adjust as quickly if we were as large as a Coldwell Bank or something like that.
How do you know when you need to adjust and what steps did you take?
When the sales stop happening and the money stops coming in, it’s pretty clear you need to do something different.
For us, it was focus on our customers and what it was that they were looking for. Our challenge was we are a service industry that is depending on people to buy homes whether it is a good economy or a bad economy and regardless of what the general perception of what real estate was. We have to figure out what it is exactly that they want to buy. For us, it went back to our customers and trying to figure out exactly what it was that they were looking for. What we found was very much about price. Financing didn’t have much to do with it. We’ve had some very creative financing and some great programs but that didn’t really work. What it boiled down to was that buyers just wanted the price adjustment.
What tips can you give other leaders to better know what their customers are looking for?
We are fortunate to have a lot of buyers coming in on a regular basis, so we have a lot of contact with our customers. I don’t know if that’s always the case, but if you have the opportunity to get in front of your customers, that is the best possible source of information. If you don’t, I don’t know for all businesses how they get in touch with their customers, but for us, we are in front of the customer every single day.
We are dealing with people who are looking for a home. There was a time when the market was super heated and people were looking for real estate to invest in, not so much as a home. As the market turned, that sort of changed almost overnight. You started to see people who were just looking for a place to live and they were looking for a home. They weren’t looking for an investment that was going to be worth 5 percent the following year.
What else did you do to get through?
We have a lot of people working with us who are hardworking agents. A lot of brokerages rely on what they call a 90/10 rule, where basically they have 10 percent of agents supplying 90 percent of their income. We kind of go the opposite way. Most of the people that work for us are producers, so we haven’t had to waste a lot of time dealing with agents that are new and really don’t know what they are doing and need a lot of direction. We have had a selective quality. The benefit to our company is we have quality agents, and as we’ve evolved, they have continued to do business.
It’s knowing how business operates and how I can work harder and apply myself within my industry to make money. That’s been my advantage. I don’t know if I would have any specific advice unless it was speaking about a specific industry other than to say if you know your industry and you know how it works, just working harder at it and being diligent as you can be, ultimately, you will be successful. We actually thrived in one of the worst economic downturns in recent economic history by just kind of buckling down and working very hard. It’s just the nuts and bolts of and business, I suppose.
How to reach: DOMA Properties, (562) 481-3800 or http://www.domaproperties.com/