Brokerage Models, Consumerism, Franchisors
C21, Pru, Exit, CB, ReMax, EXIT…hmmm?
February 10, 2007 by REALonomics · 7 Comments
The following dialogue, or something similar, is occuring in a neighborhood near you and it has something to do with real estate branding as a component of an owner’s business brokerage modeling and marketing. Go ahead, be the fly on the wall.
A deep “hmmm,” eminates from John as he peruses his latest edition of Homes & Land real estate magazine. “Here’s one that might work for us, it’s listed by Keller Williams,” he declared to Susan, his wife. Susan agreed, it did look just like what they wanted. She suggested. “Why don’t we contact Cliff Matthews over at, uh, what was the name of his company, and see if he wants to show us the property?”
John was quick to remind Susan, “we promised Elizabeth Townley at Fox and Roach that if we did purchase again we would contact her…is she still with them or, did she move to ReMax?”
“No, dear, she’s with that other new firm, uh…yes, EXIT Realty, but I don’t know why we have to chase down these agents, let’s just go with that gal who keeps sending us flyers…you know, Debbie Seligman, with Century 21, she has a lot of listings in the neighborhood.” John thought for a moment, than said “hey, there’s that new real estate office near the mall that just opened called Red Arrow Real Estate, I’ll give them a call.”
What does the discussion between John and Susan have to do with real estate economic models? Let’s talk about the Tenth Commandment of the New Real Estate Economy for owners.
Thou Shalt not Bet all on one Brand…ever!
John and Susan Cause us to Wonder
Was there ultimate brand loyalty with John and Susan? Does branding work at all in the real estate industry? Or, perhaps a better question might be, can branding be quantified for an owner, in real economic terms? If so, which of the real estate brand propositions can best assist an owner in accomplishing his/her business objectives?
Is the consumer actually “real estate” brand loyal? Or, does brand dance around in the heads of the consumer populous fractured into a million bits and pieces with not relevance to the decision-making process.
In short, does the consumer really care…as in the case of the conversation between John and Susan? Does the consumer see brands as a blurry image of an industry without true value-added propositions? REALonomics believes brand to be less about economics than about internal issue distinctions within the real estate industry, having little to do with the consumer.
Mainstream REALonomics …Let’s Talk Turkey
In mainstream real world economics there is a difference between BMW and other automobiles in the mind of the consumer. There exists predisposition, value distinction and yes, loyalty. Can any real estate company owner make a similar claim when it comes to buying and selling real estate or, is the dialogue between John and Susan more common than we care to admit?
The real estate industry has attempted, rather feebly, to create brand awareness and predisposition with the consumer. Largely, it has been an abysmal failure. How then does one build brand in a climate where the consumer does not see difinitive distinctions between one real estate company and another? They look alike, feel alike, smell alike and act alike. Well, you’ve heard the saying, “if it walks like a duck and quacks like a duck…it’s a duck!â€Â
The Ruling Elite – an all Powerful Consumer
The all powerful consumer, the ruling elite, continues to tell us by their actions that our real estate brands don’t really matter to them. REALonomics believes we are in a Third Economic Wave of the real estate industry, a consumer-centric era, one with new rules, new models and hopefully new disctinctions.
Knowing these things should owners bet ALL on one real estate brand? If traditional brand such as Century 21, Coldwell Banker, Prudential, ERA, Realty World and others are such strong brands with loyal consumer followings, why have companies like ReMax, Keller Williams, EXIT Realty, Weichert, Windermere and others gain such a foothold in a relatively short period of time?
Brand Fanatics to a Fault
Are we brand fanatics to a fault? This Tenth Commandment of the New Real Estate Economy states that owners should not bet all on one brand and essentially recognizes that we are entering into a completely new real estate game, dominated by the careful application of technology and the Internet to the markets and there are going to be some winners and some losers in the brand game.
Without true economic benefit, empiracally measured, we should not bet everything on the brand…ever. In a fast-paced economy, evolving at mind-boggling speed, today’s brands may become tomorrow’s museums.
Read more about the economic question of brand. Find out more about e-Partner.
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While you make a good point, there ARE differences in the service quality that these different Brands provide the consumer – just as in the product quality of BMW vs. Ford.
Consumers come to know the difference. Some franchisees have purhcased the so called brand in order to provide service quality to the consumer – not just to hook up with a brand.
Branding, in and of itself, is a much weaker economic benefit to an owner. The service quality provided to the consumer is always where the focus should be. If there are some brands that provide this, then those are the brands that will prevail in the market.
Broker/Owners seeking to affiliate with a BRAND, should never look at the brand for the BRAND’s sake. Instead they should look at the consumer services and benefits provided by the brand.
Great post. It provoked some thought on my part. I’m not sure that the franchises in our business always provide higher quality service, considering the independent nature of agents and low barriers to entry. Many a consumer brand in the past has learned that just saying you’re the greatest won’t keep you in business if you’re not.
With technology changing service delivery mechanisms, the savvy independent can deliver high caliber services to rival any franchise. The question might come to be whether the franchises can provide the technology and training to the franchisee in a more cost effective way than the do-it-themselves approach.
I worked with a large corporate company once that had nothing to do with real estate and they stated often that take care of your employees first and the employees will take care of the customers. The company that you keep is the one you will thrive with. This could be any major company that is only based on ownership and management. Give a customer a agent with great management and great room to use creativity and the customer will become a client.
Awesome post. I found what jkimmons said to be quite intriguing. I too would be interested in seeing if the franchises can provide the franchisee a cheaper alternative.
Real estate is and will be about the people. Even the above story illustrates that when an agent moves from one company to the other the clients are willing to follow that agent, and not necessarily the previous company that person was affiliated with.
In our local market, we have just had one major company severe their affiliation with Coldwell Banker, two brokerages cut their ties with C21, and one major company switched their signs from Prudential to GMAC. The point is that they wouldn’t do that if they believed that their franchise brands were what their customers cared about.
The conversation between John and Susan is probably correct in a market without a strong community oriented brand presence. What is missing here is that a brand alliance is not a silver bullet that brings untold business and consumer loyalty. A brand gives you the opportunity to look and sound different than your competitor. But without implementation of the products, services and training the brand provides you are just another company looking for an easy payday. For consumer loyalty you separate yourself from the pack by implementing the above and then becoming an important part of the communities you serve.
The real estate brand alone is not the bottom line. It is simply the tool that each independent contractor has elected to attach with or use to jumpstart their business In making that decision we each claim to understand that we must do all we can to assure that if the brand causes John and Susan to give us a look; we will do our best to serve their interest and enhance our opportunity to recieve more business from them. As such whether the brand gave us the chance to shine,or we just made the brand look better, the result is a win-win-win