I was honored by an email from Century 21

Last week, Jon Washburn wrote an open letter/blog post to Century 21... take a look here. In it, he made some excellent points. It is certainly worth a read, regardless of any brand affiliation you may or may not have. I'll wait... ok, see what I mean? Great post. Excellent comment stream.

And I posted a comment as well. Truthfully, my comment wasn't insightful or amazing. But, one of the higher-ups at Century 21 thought it was a good idea to send me a very nice email. I really do appreciate it. As I said in the response, printed below, it is a sign of great management for them to reach out to opinions that may not be friendly.

In the same vein as Jon's post, I sent a rather lengthy reply. I have changed a couple of items for privacy, but otherwise I think you will get the idea.  The bold was also added to make a better blog post...

{C21Exec},

Thank you so much for the email. It is the sign of great management to reach out and engage other opinions.

As I have said before, I liked C21. The training was good, and my broker was (and is) a great guy. I like the design, unlike Jon, and think the website looks pretty cool. Overall, I think that of the major brands, Century 21 is the best of the bunch.

Where I have to part paths though has more to do with the basic business model of every major brokerage franchisor. There is one little problem that leads to brand erosion at every level. It may not destroy Century 21 as a brand... I don't think it will, but it hurts all of the major brands somewhat equally.

The exact same problem is faced across the board with other Realogy brands and RE/MAX, GMAC, etc.

The problem is that the company can't function like a team. It is just simply a weakness in the business plan. At the agent level, I have to compete with every agent in my market. I don't just compete with the RE/MAX agent and the Coldwell Banker agent, but with the C21 agent at another brokerage... and even the other agent in my office. My broker doesn't just compete with the other brands, but with the three C21 brokerages that are within a stone's throw of his office. And that is the same for almost every brand around.

But where the problem deepens is that brand identity can actually damage the individual agent.

If a consumer is looking to talk with three agents about listing a property, they won't select two from the same brand... they are seen as the same. I have had plenty of calls that ended with "I already talked with Century 21." And if there is a weak agent in the brand, that weakness is attributed to the brand as a whole. I have had people tell me that they wouldn't hire me because they had a bad experience with a C21 agent in another state. Again, this holds true for each brand in a given market.

So, to combat these issues, each agent has to pull away from the brand for identity. We try to draw the strength of the brand, but differentiate ourselves. At the same time, the more we share with other agents in our own office... or even our own broker... the more we are sharing with people we are going to compete with for business. On one hand, the brand wants each agent to succeed, and works at giving tools to do so, and on the other, the structure of the brand builds walls against agents doing the right steps to succeed.

After attending Inman, and hearing a lot about Better Homes & Gardens RE... I am left with the impression that nothing is changing from the top. They are adding some glitz, but that isn't the overhaul that the business model needs in order to overcome the basic issues. I stopped by their booth and talked briefly with one of the representatives there. I was given the impression that they wanted brokers with dozens or even hundreds of agents. That is the basis of the problem.

The franchisor wants as many offices as possible to maximize income... the shotgun approach. The franchisee wants as many agents as possible to maximize income... again, the shotgun approach. There is no reason to cull low-performing agents, because they might strike gold and bring in revenue, and there is no real cost to carrying them if the office is structured correctly. There is no reason to cull errant franchises because they can still provide revenue, and there isn't a real cost to carrying them.

I guess by now you can see why I think that there needs to be a major shift in the way the business is structured... and I don't think that Redfin is the answer...

I think that a company that needs each agent and each broker to be responsible for their market is going to be stronger. I think that it will take a company that builds a brand around the local agent, rather than one that looks to build the agents around the brand is going to be the one to dominate. I think that a company that is seen as a local resource, but part of a national presence, rather than a company that is seen as the local manifestation of a national company will be the one that wins the day. And finally, I think a company where there is an open architecture for agents and brokers to share, knowing that they aren't going to have to compete against each other will be the company that builds the strongest brand.

Technology is cool... but that is also easy. C21 could have the coolest technology on the planet by the end of the year. But, the model is the hard part. Invisible, but inescapable.

I absolutely don't want to pick on Century 21. You were good to me and for me. I couldn't picture myself with any of the other big guys... or small guys, for that matter. Before I joined the C21 office I was with (prior to Diamond Dwellings Realty) I looked at the available offerings here. None were close to the Century 21 model, and the office, where I had my license, was the best of the local bunch for me.

I could go on, but I think I have thrown enough at you... I hadn't intended to write this much. However, if you have any questions or comments, please don't hesitate to give me a call. If I can make it to the NAR convention, perhaps we will have the opportunity to chat. I'll try not to be as long winded...

Thanks again,

Lane