Notorious R.O.B.

Heh, well, as it happens, I’m modifying my blogging habits a bit. The longer, more in-depth stuff will probably be headed to 7dsassociates.com from now on, as I’m in the midst of redesigning the site and plan on doing more of the “heavy” stuff over there, to make room for more snarky/personal stuff on this site.

But since you brought up Nest… what’s your brand promise? How are you enforcing it? How delivering it?

Jay, must be pretty straight forward as your company walks the talk!

Looking forward to it, Jeff.

But as I mentioned in the “Reality Check” section, which many people commenting here apparently haven’t read before commenting, I completely understand why KW has those standards and guidelines. it’s important to protect the brand; the brand DOES make a difference. The studies that NAR and others have conducted are to be questioned unless we know the question asked, the method of collection, and how the data was analyzed.

My take on it is that brand _awareness_ by itself probably provides very little differentiation, except against a totally unfamiliar brand. That’s the point of brands. Familiarity does matter, even at a subconscious level. it just isn’t the MOST important factor in consumer choice.

Ted, that is indeed the battle cry for the real estate franchise, no matter how inaccurate it is. I guess with an army of 5000 agents you are likely to sell something along the way.

What’s actually interesting, Derek, is that unless Krisstina has changed her modus operandi completely, the agent is almost wholly unimportant in her model. She’s bringing the old pre-REMAX broker-centric model back, but with technology as the basis for broker-centricity. A lot of people miss that fact.

I happen to think she’s right. I think she, and KW, are two of the four or five viable models for brokerage going into the future. But it’s a mistake, imho, to think that GoodLife Team values the agent and the broker equally. There is a reason why Krisstina rarely recruits realtors, and prefers people with a corporate sales background and no experience in real estate.

Jack, I know many luxury agents that do only 3 to 5 transactions per year and they are the most professional,knowledgeable, and competent agents that I know. Volume in its self does not necessarily make a good agent, and the higher the volume the more chance the transaction was rushed through.

Jack,

The GoodLife Team’s focus – on providing the systems to highly productive and experts in their space – is both obvious and genius at the same time. Obvious because, well, it just is. Genius because no other company of which I am aware – and certainly none of the large franchises – is doing it.

Keep doing what you are doing. Your company is poised for tremendous future success.

Best,
Michael

HI Missy — I know you’re with KW. As I said to Ted, I’d just ask you to read the section “Reality Check” to realize that I’m in fact saying the same things you are.

Mike-

I do believe it is a fight – the market place is a competition, and the promises & offers that companies make and keep to the customer are the weapons that we fight with. What I see being debated here is whether the brokerage is helping with that fight or not. KW is pretty clear that it has no aims of using its brand in that regard, but then has standards for its brand that might appear hypocritical to the recruiting message in the video. There are reasons for them to have these standards, discussed at length in many of the comments.

The capacity that most agents have to make promises and deliver on them for the customer are different depending on who they are in business with on the brokerage side. This is fact, demonstrated by lots of brokerages that offer help to associates in lead generation and servicing the customer. KW would have you believe those offers are all false promises, and that agents that come to KW always make more money than those that don’t. This is misleading when you observe a system that produces 5 transactions per agent annually.

KW’s approach is to let the agent bear the risk of developing their own business, and to cap what they take from them in return. That’s a totally valid approach, no issue with that. I also think that for many agents, KW is a completely valid choice from both a business perspective and from a branding and marketing perspective. However, I’m not willing to assign KW’s model special powers in the marketplace – at the end of the day, we’re still all competing for the consumer with our offers in our local marketplaces.

One of the claims of the Goodlife team is that the cost and risk associated with all of the things that must now be done to satisfy the modern consumer – with the web, social media, marketing, follow up systems, lead incubation, negotiation, and completing a successful transaction are now beyond the capacity of one agent to execute at a high level consistently. It’s too much, requires many skills and competencies, and developing and working on those skills and competencies takes time away from an agent’s productivity. Our response is to offer our company’s practices, systems, and tools that operate in those domains for the purpose of 1) servicing the consumer at a very high level 2) helping our agents stay focused on dollar productive activities so they actually make more money. Our company shares in the risk and in the reward.

No model fits everyone, and I would be the first to tell you that most agents can’t work at the Goodlife team. At the end of the day agents must make an assessment about what they want from their company, and whether they believe the company can deliver – same as the consumer does with their agent.

Jack

John, very insightful reply, I think you are right on in many issues. Most are built on smoke and mirrors and lots of spin. Profit sharing, capped splits, and recruiting perks don’t really pan out in an industry with so low profit margins.

I often ask agents what split they have and they will reply 80%. I then ask if they have a franchise fee and many reply oh yea that is 7%. So in actually they have a 73% split not accounting for transaction fees, tech fees, E&O insurance, etc.

The point of this discussion is the importance in my mind with the brand walking the talk. If they do that I have no issue with the Company as everyone should have a choice of who and why they work for a particular brokerage. The truth is simply that the franchise is a “brand” myth is most of the value that they bring to the table.

Your point about signs everywhere is a relevant one. In the San Diego market we have very strong companies and agents in communities that command the market share. If you are a seller in one of these areas it is likely that you’ll pick up the phone and call a few of the visible agents. It also is likely that you’ll will seek recommendations from a friend or neighbor with a referral to an agent that gets the job done.

These market leaders move from company to company with little effect on there business regardless what color or logo is on the for sale sign.

On a side note does not your model attract agents that may not be productive?

Aaron – I definitely give KW credit for the way they’re adding lots and lots of agents. My point is that it reminds me of what ReMax did in the early 2000′s when they were adding lots of agents too and eventually were the larges in the country with over 100,000 and at that time more than Coldwell and C21. The problem I see is that if you’re adding that many agents, and have the overhead of offices, staff, and franchise fees paid to corporate, you better have big profits or all the talk of profit sharing and other incentives is meaningless.

I obviously don’t know KW’s actual numbers, but I do study the competitors in my market, and can do some basic back-of-a-napkin math. Looking at the production numbers for KW offices in my area and using average commission rates, agent splits, etc., many of the offices appear to be netting only $6,000 to $7,000 per month before paying their rent, staff, and other related overhead. That doesn’t appear to me to be enough to actually generate a profit, and with the market continuing to slide and prices still eroding, I just wonder if it’s all smoke-and-mirrors and are they just setting themselves up for catastrophic failure, at least at some of the offices? Again, only time will tell. Most likely, in a few years the next big idea will emerge and the next KW or ReMax will climb the ladder and play the game of “we have the most agents” but not enough profits.

The more interesting question for me, Andrea, vis-a-vis Sotheby’s is what Sotheby’s does to enforce its brand promise of “luxury”.

For example, are minimum price requirements uniformly enforced? I’ve heard quite a few stories where they are not, and 3BR/2BA starter homes end up with a Sotheby’s sign in front of them.

Are photo standards routinely and uniformly enforced? (Because as a consumer, if I sign up with a luxury brand like Sotheby’s, I’d be expecting very high quality professional photography of my $5m mansion.)

What sorts of mandatory training are Sotheby’s agents required to successfully complete? Classes on wine tastings perhaps? Art appreciation? Other finer things in life?

Does Sotheby’s only recruit agents who understand how to serve the high-end luxury customer? (My experience with Bergdorf Goodman was that BG never hired anyone it did not think could understand, empathize with, and deal with the often-nasty, often-demanding, and often-demeaning luxury customer.) Do they fire the ones who project the ‘wrong image’ no matter the production level? (That’s the real test of a brand’s meaningfulness, isn’t it?)

I think Sotheby’s (and other luxury brands) is a good place to start because there, the brand does mean something. The brand at least tries to evoke a lifestyle that the luxury consumer understands and is used to. Now the question is what the company — not just the agent, but the brokerage company — does to communicate that brand promise, and what it does to enforce said promise across the board.

Good points, Darin… but… why does every discussion about brand turn into a discussion about business models?

Nordstrom’s has a strong brand that it protects zealously: superior customer service. Walmart also has a strong brand that it protects: low prices. Target has its strong brand: cheap chic. Those guys are fine. You know who’s not fine? Macy’s. JC Penney’s. Bon-Ton. The Gap. Companies whose brands are all muddled up, mean less and less (I mean seriously, what the hell does The Gap stand for now?), and whose managers are more concerned about internal politics than about competing in the marketplace.

All of these guys have the same business model: buy wholesale, sell retail. In real estate, a brokerage/brand can say, our business model means we don’t care about our brand. That’s fine; it’s their company, they can do what they want. I just happen to think it’s a stupid strategy is all. Business model and brand identity are two separate, if interlinked, things.

Darin, Bravo, Competition offers choices = consumer win!

Let’s get back to the base concept of signage. What is the sign supposed to do? I really don’t think the average consumer / home seller feels seeing the agent’s name, or picture, dwarfing the brand, or full body photo on the sign out front drives traffic to them, and more importantly, do you?
Our industry is so unsophisticated and inefficient., and we bemoan the fact people won’t embrace our professionalism.
Our marketing is a jumble of mixed messages and self promotion and we try and disguise it as being in the best interest of our sellers for US to be front and center.
The sign should be a window for access, a way for an interested consumer to quickly and easily get information and content about the property, not a billboard for the listing agent.
There are a host of ways to do this, and yet the vast majority of signs are basically the same as the ones that were in yards and windows 50 years ago, only now more shamelessly promotional of the office and / or the agent.
So, back to the sign. I am not a KW agent, but I am willing to bet this video is setting the stage for getting past “the past” and having their signs actually do something for the client.

Going to reply here, Nick, so others can follow along too.

I did read your good & passionate post, Nick, and I think it’s worth a read for everyone who is interested in this topic. But as far as your answer to my post on Notorious goes… I don’t believe I’ve ever said that the brand matters to any agent, good or bad. It does, however, matter to the brand owner. It should, I think, matter to the brokerage/franchise whose brand it is.

So I was pointing out that despite the YouTube video, intended to recruit real estate agents to KW, since agents don’t care about the brand, KWRI does in fact care a great deal about the KW brand, the KW image, and so on, as evidenced by the Policy Manual.

I also don’t believe every agent, or for that matter, ANY agent can be trusted with your brand. No brand manager, no competent brand-focused company, trusts anyone with the brand; they watch each other like hawks to make sure that the brand promise and meaning are preserved. My issue is with companies in real estate who do not, and then wonder why the brand is meaningless to both agents and consumers.

-rsh