The real estate industry finds itself at a, “branding”, crossroad. The traditional franchise template has turned sour. Many agents find the often, “personality-branded”, approach of independent Brokerages not that helpful to their businesses. In too many instances, an agent’s choice in brokerage affiliation is one between the lesser of two “neutrals”, neither of which speaks to them directly.
Brokerages are also trying to differentiate themselves in some meaningful way that will make a connection with their agents. After all, how long can a Broker continually beat a, “new and improved” drum?
Historically, franchises packaged and sold their brand as a “product” for its sales agents to use in helping drive their businesses. The product was the value added benefit their brand brought to the table. The brand may have been sold as a “product” to sales agents, but to the consumer, it’s always been a non-starter. It’s not like anyone ever said; “I deal with Remax agents only!” The truth is, a consumer’s choice in selecting a sales agent automatically comes with a Broker who literally, for the most part, has no impact or involvement within the sales cycle. Given that, who is the Broker’s product for again?
Independent Brokers can take their first steps toward the future in realizing what they are selling to their agents is a service and not a product. The consumer doesn’t care about the Broker. A real estate brokerage is not a product, it’s a service. A service that, in all practicality, gives benefit to only those who are in sales.
The real challenge for independent brokerages today, and in the future, is in the war over agent affiliation. Industry churn rates dictate Brokers need a continual stream of new agents just to keep even. So, how does a Broker grow? How can a Broker leapfrog competition?
In Atlanta Georgia there are approximately 50K-60K licensed sales agents. This represents the total market share for any brokerage competing for agents. The odds an independent, single-message broker could capture a meaningful market share, say 10%, are long at best. Powerball long. Nonetheless, that is what Marketing is for. And, every marketing professional for last 100 plus years has looked in one direction for help: Cincinnati, Ohio.
Ground zero for modern day marketing is May 13, 1931. That was the day when future P&G CEO, Neil McElroy submitted a 3-page memo proposing a radical new idea that would later be called “Brand Management”. Within this semi-ancient text, he refers to; “creating a marketing organization based on competing brands managed by dedicated groups of people”.
In the consumer space, a company with a single product, however successful, will begin to hit its market share ceiling around 40%. That same company, with 10 different products in the same market space, each with its own unique value proposition, can see their market share possibilities nearly double. For a company like P&G, their Tide laundry detergent would take them only so far. But, their Tide laundry detergent in concert with their Cheer, Bold, Dash, Ariel, Gain and ERA detergents would take them much further.
The average television viewer watches several Proctor & Gamble ads every day. In most cases the viewer has no idea, and nor do they care, about any P&G involvement. The corporate structure behind the brand/product is irrelevant; it’s viewed as supportive admin. Ever see a Corporate P&G ad?
Without a franchise to lug around, independent Brokers are realizing the quickest way for growth may be to incorporate the principals of classic P&G brand-management. The consumer has a relationship with the sales agent and could care less about the Broker in much the same way as the fans of Ivory soap don’t think too much about the company who made it. Today’s Brokers and P&G have a lot more in common than you think. Given that, the real estate Broker of the future may very well look like a mini Proctor & Gamble.
In Atlanta, Brokers allow agents to self or group brand under a tradename of their choosing. An agent DBA creates the virtual Realty Company that allows the Agent, or groups of agents, to establish their own brand(s). Allowing agents to create their own Brand is the critical keystone to the future of the brokerage business. Even today, agents don’t like being “given” their brand, and considering the brand-crazed nature of our Social Media world, that view isn’t likely to change much going forward.
Decades ago when faced with a marketing challenge regarding their soap market share, P&G didn’t just keep re-inventing Ivory; they made a ton more soap, which in turn expanded their market potential. Brokers can continue to market their own, “new and improved” realty brand, but if they want real expansion capability they will need to embrace DBAs and allow their agents to have their own brands and their own voices.
In an industry as well-tread as real estate, it’s doubtful any one Broker has “the” vision that thousands of agents will rally around. More realistically, agents will rally around Brokers who permit and encourage many different visions and voices. If you find yourself wondering, as marketing managers have for six generations: “if it was good enough for P&G, it just might be good enough for us”. Well, you wouldn’t be wrong.