Claim:
real estate franchise in the Entrepreneur Magazine's(Jan., 2010). Keller
31st Annual Franchise 500 Survey
Williams finished first among real estate companies while
RE/MAX placed third.
Bottom line:
for Keller Williams to improve its ranking
by stockpiling low-producing agents. Long-term,
RE/MAX has dominated this survey with its focus
on market share and is positioned to resume dominance
as the market recovers.
Talking Points
• The recent growth in KW agent count
appears to be the primary reason behind its
leap in the rankings - especially in relation to
the recent drop in RE/MAX agent count.
• The KW model is based on increasing agent
count. The RE/MAX model is based on
increasing market share with top-producing
agents.
• In market downturns, marginal agents may
tend to join brokerages such as KW where
they can keep a real estate license active while
incurring minimal expense.
• The RE/MAX model appeals to agents who
are selling real estate - not riding out a down
market. It is a long-term strategy that has put
RE/MAX first in this survey nine of the last
11 years.
• Entrepreneur also ranked Keller Williams
the No. 1 real estate company in its global
category, and RE/MAX third. The reality:
RE/MAX is in more than 75 countries. Keller
Williams, after two decades, is in just two.
• In another respected survey, the 2009 Top 200
rankings by Franchise Times listed
RE/MAX as the No. 1 real estate franchise.
Keller Williams failed to make the top three.
Claim: "Keller Williams Realty was voted the Most Recognizable Brand of Real Estate Franchises for 2009"
RE/MAX No. 3.
Bottom line:
media, not a scientific survey. Also, it seemed timed
to gain attention for the sale of Stefan Swanepoel's
upcoming annual Swanepoel TRENDS Report.
Talking Points
• Survey author Swanepoel acknowledges
that his poll is so problematic he can't
even give it a margin of error.
• Swanepoel attributes KW's showing to a
strong agent presence in social media.
This could be true if KW agents, who
average 5.1 transactions annually compared
with the RE/MAX average of 13.5, have
more time to spend in online forums.
• Last June, Swanepoel ranked RE/MAX, based
No. 1 and Keller Williams No. 4
on his own industry analysis.
• RE/MAX agents sell more real estate than
anyone else. This is due, in large part, to
having the most recognizable brand in real
estate.
• A scientific survey of consumers would be
more meaningful, but surveys are only
truly meaningful when they're backed up
by performance.
January 2010
To: RE/MAX Owner/Managers From: RE/MAX International
Talking Points about Recent Keller Williams' Claims
Recent claims by Keller Williams are wrapped in PR hype. What really counts is
performance as you'll see in the talking points below.
Claim:
highest overall satisfaction ratings from homebuyers
and home sellers among the largest full-service real
estate firms for the second year in a row (J.D. PowerSM
and Associates 2009 Home Buyer/Seller Study
July, 2009). On the buyer side, KW was No. 1 on
the survey's 1,000-point scale with a score of 806.
RE/MAX was third with 798. On the seller side,
KW was No. 1 with a score of 815 and RE/MAX
third at 784.
Bottom line:
traditional office-centric models over agent-centric
models such as RE/MAX. Even then, the statistical
difference in the rankings is questionable.
Talking Points
• The scores are so close, and the
measurement so imprecise, that
statistical differences remain
questionable, especially on the
buying-side rankings.
• RE/MAX agent ratings appear near
equal with KW on the buying side
(which is weighted more heavily
toward the agent).
• With RE/MAX, the agent is central to
the transaction, and the office is often
nearly invisible. With the massive Keller
Williams market centers, the office is
more likely to be a dominant factor for
the consumer.
• At RE/MAX an office's marketing is
typically not even part of the equation,
because the agent handles virtually
everything.
• A 2008 Consumer Reports survey that
focused on the selling side showed no
statistically meaningful difference in
customer satisfaction scores among agents
with the top real estate franchises.
Claim:
million in profit sharing to its agents in 2008.
Bottom line:
receives profit-sharing payments. The number of those
who do is never disclosed. But if every KW agent did
receive profit sharing, the national average would have
been just $412 per agent in 2008.
Talking Points
• Keller Williams is primarily a
recruiting-based business model, not
a performance model. KW recruiting
materials emphasize agent-count growth
and the potential for profit-sharing via
"down-line" recruiting.
• The main recruiting message is that you
can join at little financial risk and can
possibly generate passive income without
selling real estate. But even if a KW agent
recruits another agent (the trigger for
profit-sharing qualification), there's no
guaranteed benefit. The recruited agent
also needs to be in a profitable brokerage
(market center) before any "profit
sharing" checks are cut for the immediate
sponsor and any sponsors further up the
chain, just like any multilevel marketing
organization.
• Even if a market center is profitable,
there's no guarantee of profit sharing -
because the recruited agent first needs
to have closed at least one transaction
side. Recent MLS analysis of one of
Keller Williams' self-proclaimed "most
profitable" market centers shows that
more than a third of its agents hadn't
closed a sale in the previous 12 months.
• The Keller Williams model encourages
every member to be a recruiter. But if
everyone is recruiting agents, who is
selling real estate?
Nobody in the world sells more real estate than RE/MAX!
©2010 RE/MAX, LLC. All rights reserved. Each RE/MAX office independently owned and operated. 100018C
Comments (2)Subscribe to CommentsComment