The topic I want to touch on is why prospecting teams stay small. You see this a lot with small teams that have a strong emphasis on outbound prospecting — holding all the agents tight, holding them to lead generation every single day. Those teams tend to stay in the death zone of the small team longer.

When I say “death zone,” the team leader is both the leader and still heavily in production. The bulk of the production typically still comes from them, and they’re having to lead at the same time. So they’re making a little more money, but they’re working two to three times as hard.

For a very long time, small teams were all that our industry knew. In the early 2000s, even up to 2015, big teams weren’t really a thing. Now they very much are a thing and growing more. One of the reasons is that everybody was obsessed with these tight prospecting standards.

Everybody on my team is going to be onboarded the same way. Everybody’s going to be held to a certain level of accountability — 20 contacts a day, tracked on a scoreboard, held up in team meetings, three hours of prospecting every single day, Monday through Friday.

I’m not saying that’s bad. We teach and coach that at ICT. There is a stop and a start to it. I do think it’s great with brand new agents or low producers who are highly motivated to generate business right now because they’ve got bills to pay. It’s very good for small teams because small teams tend to have a lot of low producers and brand new licensees.

But the problem is, if you stay with that system, it’s very hard to become a big team. You almost never see it. It’s very rare. When you get in and look at the agent mix and the production numbers, you start to see that it’s not exactly what it seems.

Typically, what large teams do is hold their new agents or lower producers to those tight standards — because they can. Those people are highly motivated to lead generate. They’ve got bills to pay, they’re struggling, they’ve got a gap in income. But like all humans, once they get some money, they get lazier. That’s not their need anymore.

Most team leaders — most successful leaders — yes, you have a level of motivation that very few other people have. And when we get frustrated that our other people don’t have that same drive, understand: if they had the same drive and motivation as you, they would be your competitor. They would not be working for you. They would not need you. They would not need a leader.

You need followers when you’re a leader, and they will not have your motivation.

Typically, what we’re doing with these prospecting teams is pure outbound prospecting — expired listings, FSBO prospecting, circle prospecting — or we’re providing inbound lead sources like PPC or portal leads from Zillow, Realtor.com, and Homes.com. And we’re expecting agents to reach out and prospect those, which is technically inbound, but with an equally low conversion rate.

Those do work, and we teach and coach all of those. But the problem is, even if you’re able to attract a lot of those agents, your turnover is going to be very high. No one really wants to be a telemarketer forever. When people first sign up to get their real estate license, they’re not signing up to be a telemarketer. They want a way out of that. They burn out eventually. And if they can find a way out that’s not on your team, they’ll eventually take it.

So turnover gets very high when we try to squeeze agents tight with very strict accountability and standards.

There was a time when everyone would admire a team that “runs like a machine.” But then you look at it and it’s not that big. The team leader is still in production, or still having to lead the team, because they can’t get big enough to generate enough production from the agents to justify stepping out.

A good example of the other end of the spectrum is a very large brokerage. If you’ve got a brokerage with a thousand agents, I almost guarantee you the leader of that brokerage isn’t selling. There are probably no standards whatsoever — agents hang their license and do what they want. But that leader is still out of production. I’m not saying you need to go there, but when we’re so insistent that everyone prospect and hit their numbers, what we end up with is a large team that’s chocked full of low producers and new agents.

And we wonder: how do all these other teams get top producers and influential agents to join them? How do we build a reputation that makes them willing to join us? That’s the real problem.

Prospecting teams — at least in the eyes of the agents on them — tend to have a low reputation among their peers. Would any agent who closes 25 transactions a year, all from their own database and sphere of influence, ever join a prospecting team? That would feel like such a step backward. Publicly, in front of all the other agents, people would say, “Why did she join that team? She must be failing.” And that’s really the only conclusion they’d draw.

If your team is a bunch of new producers and new licensees, your agent mix will dictate what comes to you.

So how do we make it acceptable — even attractive — to become a large team with top producers who don’t leave? And how do we make sure agents don’t feel they have to leave when they’re getting enough business from their own database?

We have to make room for them. We have to have some kind of path or plan.

Most of you know we prescribe a matching standard — rewarding agents who bring in business from their own sphere of influence. That becomes the key criteria for lead distribution. We’ll give you leads when you generate and bring in your own leads too. We’re encouraging them to learn to fish, not just to receive fish.

When we implement that kind of standard, agents can earn out of lower commission structures because they’re bringing in their own business and not relying as heavily on team leads. We can actually charge them less, so they have a better commission split. All of a sudden, we’ve got top producers on the team — which keeps retention much better, because now agents look around and see that people aren’t leaving. They think, “I want to be like those people. They don’t have to prospect every day. They’ve got business coming to them.”

And other agents will feel free to join your team too, because a significant percentage of your population are top producers. That makes it socially acceptable within the industry for someone else to join. And that changes everything.

That’s how small teams grow — slowly, then suddenly. Once a team can show they have two, three, or four top producers affiliated with them, and a few agents make that public decision to join, now you’ve got social proof. Other agents start wondering why. That’s when teams really go.

But to do that, you’ve got to have tiered standards. You can’t have everyone on the same commission split and expect top producers to walk in the door.

The NAR survey of home buyers and sellers — conducted every year for the 35 years I’ve been in this industry — has consistently shown that around 80% of all closed transactions were done through sphere of influence. That means the buyer or seller either knew the agent, or knew someone who knew the agent. The other 20% of all business includes everything else: FSBOs, expireds, circle prospecting, social media ads, PPC, farming, portal leads — all of it combined.

You’ve heard it over and over again: work your database. It’s the low-hanging fruit. But here’s the point — that’s what every agent wants, including everyone watching this. You didn’t get your license thinking you’d have to telemarket and prospect every day. You got your license with the dream that you’d have a big market share, and people who knew you would just reach out to you.

If you don’t have a place for those types of agents, you’re going to alienate 80% of the agents out there. Now you’re only playing with the small, hungry, lower-income chunk, and top producers want nothing to do with that environment.

The big teams and big brokerages know they have to be big. So you’ve got to allow for different neighborhoods inside your city — different types of agents. Not everyone is going to be a prospecting machine. Some people grow out of that phase. Some people love it and want to keep doing it, and that’s fine. But if you’re going to be big, you have to allow for different neighborhoods.

You’ve got to get over your own systems and structures a little bit if you want to step out of production or out of day-to-day team leadership. If you don’t want to step out and you just want to keep running a small, elite team — go for it, for as long as you can hang onto it. But someday, trust me, you’ll get burned out. Every June and July when you want a vacation. If you’re not growing, you know the adage: you’re dying.

That’s why small teams get stuck for decades as small teams. That’s probably the biggest thing I see out there. Open up your standards. I don’t mind you holding new agents tight — but you’ve got to have a program for higher producers to join your team. You’re looking at it way too narrowly.

I hope that helps.