What Delta Airlines Taught Me About Real Estate Commissions… 

 April 16, 2022

By  Dennis Jones

Last week, Delta Airlines announced its public earnings to Wall Street. 

In the first quarter of 2022, they lost over $940 million dollars. Most of the loss was blamed on the sharp rise in fuel costs.

But even though they lost a ton of money, they lost less than most of the analysts were predicting.  And their CEO went on television to say how the demand for travel in the first quarter of this year is the highest they have seen in the history of their company. More people are booking flights on Delta Airlines now than ever before.

As a result, their stock price increased by over 6% in one day! 

Even more interesting was what the commentators on the business channels had to say about flying with Delta.

They talked about how courteous the Delta staff is, how immaculately clean Delta airplanes are and how Delta employees go overboard to make sure your flight experience is not only memorable but the best you've ever had.

While reporting the news, they were sharing rave reviews about their experiences.

As I listened to everyone gush over how awesome Delta Airlines is, I started thinking about Delta Airlines ticket prices.

I mean…Delta is not a discount airline and is certainly not known for being a low-cost leader.

For example, I searched online for a round-trip flight from Phoenix to Seattle. Airline prices change every day and they are bound to be different when you read this, but here is what I found:

• Southwest Airlines $328
• Alaska Airlines $368
• United Airlines $405
• Delta Airlines $417
• American Airlines $468

Delta was not the highest, but certainly not the lowest.

So how do they do it? How does Delta Air Lines, one of the “upper tier priced” airlines, create the strongest demand in their history and receive rave reviews from their customers?

It's all about the exceptional service and value they provide…and the delta

When I say delta, I’m not referring to Delta as in the Airlines… I’m referring to the “other delta”. 

Webster's Dictionary defines delta as “the difference between two values”.  

For example, you can fly round trip between Phoenix and Seattle on Southwest Airlines for $328, or you can fly on Delta Airlines, a premier service airline with an awesome customer experience...for only $89 more.

Please re-read that last paragraph.

Notice I did not say you can fly round trip between Phoenix and Seattle on Delta Airlines for $427…I said you can fly round trip between Phoenix and Seattle on Delta Airlines for only $89 more than the lowest price you can find.  

The “delta” is only $89.

What does this have to do with cutting Real Estate commissions?

A lot.

Listen, I know you are getting hammered at your listing presentations to lower your commissions and fees.

No matter what you say your fee is, the seller has a friend that will do it for less.

If your fee is 6%, the seller knows another agent who will do it for 5%.

If your fee is 5%, the seller knows another agent who will do it for 4.5%.

What I want you to do going forward is STOP trying to convince the seller why you are worth whatever your total fee is, but instead focus on the delta

If your fee is 6% and the other agent is 5%, stop trying to convince the seller why you are worth 6% and instead explain how much more value you will provide for only 1% more

Explain the service level you include, the detailed process you have in place to protect your client through the transaction, and the extra services you bundle to make their experience easy and stress-free. And your fee is only 1% more than the lowest price, cost-cutting, minimal service, flat-fee agent! 
SELL the delta.  

Do not believe the myth that people always choose the lowest-priced option. If that were true, everyone would eat every meal at McDonald's and we would all be driving those little Chevrolet Spark cars.

Instead, we are driving brand new Teslas and BMWs and have reservations at Mastro's Steakhouse on Friday night.

People want quality, a great experience, and concierge service.

Most importantly, they are willing to pay more to get it.

Your job is to explain what additional value you provide for only a small amount more (the delta) than the agents who cut their fees. 

Because the price is only important in the absence of value.  

On your next listing appointment, explain your value and sell the delta.

P.S. For those who are interested, I have included the video below of Ed Bastian, Delta Airlines CEO, commenting on the sharp rise in airline travel demand.

Dennis Jones

Dennis is a 23-year veteran of the real estate business. His industry experience includes over 5,500 residential real estate transactions exceeding $1 Billion in contract value. He founded RARE Agents to help agents of all experience levels raise the bar of excellence through his mentoring and coaching programs.
Email: Dennis@RareAgents.com.

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