As leaders of big-box franchise brands stand on stages and pound their collective chests, making outlandish claims about their commitments to technology, independent brokerages are feeling more empowered than ever toward gaining market share. In fact, industry data supports this fact.
After more than 20 years in this industry, my conclusion is there are two fundamental reasons independent brokerages are winning today. First, technology is leveling the playing field and allowing for more net broker dollars than in previous years, even while margins are shrinking more than ever before in history. Second, the typical agent in the United States makes a brokerage change every four to five years, and grows increasingly concerned about protecting their data, contact records, and book of business. Considering more than 82% of an agent's annual revenue is procured from their sphere of influence, this wariness makes total sense.
The latest 2019 data from the National Association of REALTORS® shows that only 11% of all U.S. brokerages are affiliated with a franchise company. That's down slightly from 13% cited two years ago in REALTOR® magazine. The magazine says 42% of all Realtors—meaning that percentage of NAR's 1.2 million members who are agents and brokers—are now affiliated with a franchise. That's down, albeit only slightly, from 43% two years ago. Why are so many brokerages and agents deciding to remain independent or leave their big-box franchise brands? How does an independent real estate brokerage take advantage of the shifting marketplace?
For starters, independent real estate brokerages have an opportunity to consolidate technology and provide more concise tools and services that agents actually use. Even more beneficial is the fact they can do this at alarming speed and with lower costs while providing all the core services that a real estate agent needs to run his/her business. It is no secret that the typical real estate brokerage manages between 15-20 technology vendors, while the typical agent manages between 10-15 technology vendors. Additionally, these technology vendors do not communicate, the data is not shared, and real estate agents and brokerages are reduced to being little more than vendor managers, adding considerable and unnecessary costs and leading to massive inefficiencies that inhibit growth and scale.
There are additional differentiators and advantages to providing superior technology to agents than what the big-box brands are able to build or buy on their own, and that technology exists today. Here are a few challenges and solutions for entertaining a technology consolidation:
Brokerages cannot afford to pay for systems like a CRM, for example, if agents fail to adopt. Agents refuse to fully utilize brokerage provided CRMs because they don't want to share their contact records with their brokerage. They want to protect their database that they worked so hard to build and therefore ONLY use the CRM for leads provided by the brokerage. Additionally, the brokerage loses the financial benefit of having its agents working more efficiently and increasing productivity across their entire spheres of influence.
Provide a CRM system with a "walled-garden." Simply put, this is a technological term that means the contact record details of an agent's personal database can be uploaded into the CRM, but those contact record details remain protected for the agent and are NOT shared with the brokerage.
Note: there are only one or two CRM systems in the entire industry that provide a "walled-garden." Providing this has an enormous, positive, impact on agent adoption.
Brokerages fail to provide the most critical core services to help agents scale and grow because they don't fully understand what comprises core services.
Provide at least IDX websites that are MLS-fed and Google Audit optimized, robust automated email and text marketing with predefined consumer touch campaigns, advanced productivity CRM systems with built-in activity and workflow management, marketing collateral / document storage, CMA creation tools, lead generation / aggregation /response / routing / tracking, team functionality, MLS integration across all pieces, social media marketing on a comprehensive scale including lifestyle content and MLS information… and provide this in one, simple-to-use platform with one username and one password.
Brokerages lack visibility and insight into the daily happenings across their company. Meanwhile, agents crave having a brokerage that is paying attention to details and that can improve the agent's business without becoming "Big Brother." Agents want a brokerage that behaves like "Big Partner."
Find a technology platform that provides Key Performance Indicators (KPIs) across many functions in a comprehensive dashboard for quick viewing, analyzing, and decision making. Also, find a platform that includes tools for targeting potential recruits along with relationship and rapport building automated marketing campaigns. It's not simply enough to target agents—at some point you'll need to develop a relationship with them to persuade and influence them to hang their license with you. Make no mistake, agents will make a brokerage change. Will it be toward you or away from you?
All of this is precisely why Elm Street Technology built the Elevate BOSS platform (acronym for Business Operating System and Services). Now, independent brokerages can become fierce competitors to the big-box brands by providing comprehensive, easy-to-use, critical core-services to agents in one consolidated platform to save money, save time, increase productivity and capacity. Give your brokerage an unfair advantage in your local market and inquire today about a free technology evaluation and let us partner with you to help your agents sell more homes, faster!
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