- Allow for agent turnover. In fact, plan for it.
- Engagement is crucial in retaining agents.
- Building a community requires time, patience and strategy, but the rewards are greater than the investment.
Agent turnover happens all the time in real estate. Sometimes it’s for personal reasons. Other times, it has to do with money — and the opportunity to make more of it — either at a competing brokerage or somewhere else entirely.
A broker’s goal is to ensure that tools and systems are in place to help its agents sell. An agent’s goal is to make use of said tools and systems to grow his or her real estate business. In spite of this, there is nothing preventing an agent from affiliating with another brokerage.
As a broker, you can invest capital in physical expansion, new technologies and countless happy hours or training, but in the end, the cards are stacked against you, whichever way you turn.
This might appear as a losing proposition for some, but for the optimist, an opportunity presents itself in the form of agent retention. Here are three ways to grow your brokerage, keep your agents and minimize turnover.
1. Believe it or not — you need to allow for agent turnover.
“It’s nothing personal.” We all know the phrase. It’s just business — and as such, let’s keep it that way.
This is probably the most unlikely thing to consider, but it ought to be considered for the survival of any brokerage. Granted, no brokerage would voluntarily have policies or systems in place to accommodate agent turnover — we don’t like it when agents leave, especially when they go to a competitor.
But the truth is: brokers must plan for it. At its core, turnover is not detrimental — it allows for new ideas and new faces to join a company.
Turnover provides a path to new ways of thinking and a reassessment of the current corporate culture. Excessive turnover, on the other end, is lethal for your business because it communicates a lack of investment in bettering your company — or worse, maintaining the status quo and a resilience to grow.
Brokers who are thinking of growing their real estate businesses should plan for such contingencies. Banking on the fact that your agents will stay with you forever is a nice thought, but it will ultimately sink your business.
2. Engaging your agents as a retention strategy.
Equally important to planning for turnover is having a retention strategy. This is particularly crucial in real estate given that most brokerage models revolve around agents being independent contractors as opposed to employees.
As brokers look for growth and expanding brokerage services, they should constantly re-engage their agents in a way that is both genuine and beneficial to the agent’s personal and professional growth.
Often more effort is allocated toward recruiting new agents — promises of leads, training and tools to grow, among other things — but very little is spent on retention after joining the brokerage.
Additionally, brokers fall into the trap of expecting loyalty from their agents, which, in turn, causes them not to engage. An agent who is not engaged looses interest — both in the business and in the brokerage — and soon will start contemplating leaving. When that happens, there is very little a broker can do to retain said agent.
Customer engagement, it turns out, is also profitable for business. Curtis Bingham, executive director of the Chief Customer Officer Council (CCOC), quoted a study published by PeopleMetrics, Inc. addressing customer engagement and its impact on a company’s bottom line.
The study revealed that “companies focusing on customer engagement realize a 13 percent revenue reward, compared to a 36 percent revenue penalty for those companies obstructing customer engagement.”
This is a perfect opportunity for brokerages to dedicate resources toward engaging their agents — for example, providing an engagement manager. Having someone in the brokerage who is constantly engaging experienced and new agents will help with retention.
3. In addition to growing a company, focus on growing a community.
Growing a brokerage is a sign of success, but if the intent is simply to make more money and collect bigger paychecks, then that growth is meaningless.
With the advent of social media, brokers should think about growing a community rather than just building a business.
It’s easier to scale a real estate brokerage: Hire a top-producing agent or team, and convince that agent or team that your company is a match for them to scale up their real estate venture.
Building a community, on the contrary, requires more time, patience and strategy because profit will no longer be the main element of the broker-agent relationship. Rather, it will be a byproduct of a partnership grounded on mutual trust, community service and better business practices.
Often, the best agents are not necessarily the ones making the company more money, but they are the company’s spokespeople and walking billboards in the community — both within and outside of the brokerage.
Agents will leave you, and that’s OK. Wish them the very best when they leave, but don’t mourn their departure.
For the agents still with your company — engage them. It’s a way to let them know that they matter. When you are expanding, you are not just building a business — there’s a community of people and their needs taking shape as well.
As much as you focus on making money, focus on the needs of your community.
Billy Ekofo is the Assistant Director of Lead Management at Century 21 Redwood Realty. You can follow him on Twitter (@BillyEkofo) or LinkedIn.