Can we be honest for a moment? The Realtor association is dying.
I don’t think it’s quite dead yet, but it’s on its deathbed with intensive care unit doctors hovering nearby. You can’t see that it’s dying because the numbers appear steady: 1.15 million Realtor members (and growing!), $160 million in dues revenues and tens of millions in lobbying.
The events are packed with people doing a hundred different things, and people apparently care enough to decry the lack of women in leadership positions at NAR.
But look a little closer, and the signs are there.
NAR recently posted that one out of five Realtors have been in business for less than a year: The flip side to having younger people is a decline in experience.
NAR said 20 percent of Realtors haven’t been in the business a year, and a third have been in it less than three years. As a result, median income is down, even though sales are up.
Think about that. One out of five of the 1.15 million Realtors is brand spanking new. One out of three have been in less than three years. That’s not healthy for an organization whose twin pillars are advocacy and professionalism.
2015 saw a huge jump in NAR’s Call For Action participation rates to 18.3 percent — from the 2014 figures of 5.5 percent and 2013 figures of 12.8 percent.
Ask association executives and volunteer association leaders what their top problem is, and they will all say member engagement. Or more precisely, lack thereof.
Ask the so-called membership, “Why do you belong to the association?” and the number one answer is “To access the MLS.” The number two answer is, “Because my broker forces me to.”
Everyone knows this. No one likes talking about it, except in private and then in hushed tones. But everyone involved with organized real estate in any way, shape or form realizes this. The very fact that NAR commissioned, then published, the DANGER Report is a sign that NAR leadership knows and understands the problem as well.
A few rebels think that the association should die. They call NAR terrible names, including outdated, a union and an organized crime cartel. And these are dues-paying members that say these things.
I’m not one of those rebels because the Realtor association has a proud history of protecting homeownership and private property rights and continues to do that important work. Is there self-interest in an association’s political activities? Of course there is.
But on the whole, I can’t think of any major organization in the United States today that places such emphasis on private property rights and the importance of housing and communities.
So I firmly believe that the Realtor association must be resuscitated. We cannot, as an industry — nor as a country — afford to have organized real estate die off.
To give credit where credit is due, NAR leadership recognizes the need for reviving the moribund association and energizing it once again. In May, the Board of Directors of NAR approved changes to the Organizational Alignment Core Standards that raises the bar on what is expected of local associations of Realtors.
Raising the bar is, of course, good for everyone involved in real estate, yet the new mandates create a challenge for local associations.
After all, it isn’t as if the local association has been sitting around trying to avoid doing advocacy or community outreach efforts. Local association executives and leadership are constantly trying to get members involved.
So what is the local association to do when it has been trying to drive member engagement, drive RPAC investment, drive advocacy and drive community outreach all along to have these new mandates come down?
The key insight: They are not your members
The first thing for association leaders to do is to understand that they have great member engagement. What they don’t have is great MLS subscriber engagement.
What does it mean to be a member of any organization? If I say I’m a member of the NRA, what does that mean to you? If I say I’m a member of the ACLU, what does that mean to you? It means that I believe in the ideals of the NRA or the ACLU and support the policies of those groups.
I can own a gun, and not be a member of the NRA; I can support free speech, but not belong to the ACLU. To be a member of any organization, whether a church, a political party or any other voluntary organization is to say that one supports the goals and ideals of that organization with money, time and belief.
The Calls For Action response rates represents the actual membership of the association. The other 80 percent or so are not members in any meaningful sense of the term. They are those who were forced to join the association to get the MLS or because their broker mandated it.
Is it any wonder why they don’t give a damn? The vast majority of the so-called members in a Realtor association are not members; they are MINOs — or members in name only.
Just shift your frame of analysis just that little bit, and everything that is designed as “member engagement” today looks completely different.
Member engagement and the Realtor association
The typical “member engagement” effort by a Realtor association isn’t member engagement. It is, instead, a sort of a recruiting effort to get the MINOs to become real members somehow.
Luncheons, parties, lectures, golf outings — all are essentially recruiting events where the premise is, “We know you don’t give a crap about our ideals, our principles or our beliefs, but come have a drink, have some fun and we’ll try to make the association seem like a fun social activity!”
But if your real members are already committed, already attending, already giving to RPAC, already doing what members are supposed to do — shouldn’t member engagement (rather than MINO engagement or membership recruiting drives) look completely different? I think so.
Today, if you are a true member of the association, there’s very little that the association does that connects the core principles of the association with your business.
In fact, it is often the case that the more you become involved with the association, the more your real estate business suffers as you take time away from buying and selling homes to serve on a committee, take a trip up to the state capitol to meet with legislators or what-have-you.
The truth is that volunteer leaders of associations sacrifice to be involved. It’s all give — and no take.
What if we can change that? What if we can make a direct connection between the association’s core activities and the actual business of the member?
Enter Neighborhood Advocates Initiative
Over the past few years, I’ve been working on, failing, refining, relaunching, failing and then re-refining something called Neighborhood Advocates Initiative, or NAI.
We are in the midst of some trials in a few different markets, but have learned enough and built out what is necessary to deliver. This is not a sales pitch; this is, instead, the opposite of one as I aim to tell you what we have learned and what you should be doing.
I suppose we’re silly that way, but the fact is that I didn’t start this thing to make money; rather, I started NAI as a business to have the money to drive reform. In full disclosure: My clients are associations, brokers and others.
If the key disconnect between the true member and the association is that membership is all give and no take, we need to correct that so that being a real member of the association of Realtors delivers concrete business benefits to the active members.
And by concrete, I don’t mean some unspecified, vague branding benefit; I mean actual commission dollars that the member can trace directly back to the association and its programs.
NAI was designed from the ground up as that program. The concept is relatively simple: convert Realtor advocacy issues into Realtor marketing pieces. The execution is another matter, but the concept is simple.
The reality of sphere marketing and farming
Just about every successful real estate agent builds his or her business on sphere communication, geographic farming or both. The internet is incredibly important, yes, and some people have thriving businesses based on IDX, Zillow, realtor.com or other internet-based lead generation.
But even those agents often achieved a level of success before engaging in online real estate through sphere, farming or both.
Don’t take my word for it. Look at the research:
Here’s the breakdown: 57 percent of buyer business and 68 percent of listings come from Contacts and Referrals, AKA, Sphere (which includes Past Clients), and Farming.
The problem with sphere and farming, though, is a simple one. What do you say?
For example, just about every broker, office manager and real estate coach — as well as any number of books and seminars — knows that telephone calls to one’s sphere of influence is incredibly successful in building a business. There are programs in real estate designed around time-blocking a couple of hours a day to call on one’s sphere consistently.
We all know this works. If a brand spanking new agent wants to make money, all he or she has to do is make phone calls for two to three hours a day, and the agent will be successful.
So why don’t agents do this? One reason is the fear of rejection — having worked in telemarketing earlier in my career, I know how much it sucks to make sales calls. That’s just something you have to get over if you’re going to do telemarketing.
The other reason, though, is a valid one. Sphere communication isn’t about calling up strangers out of some Glengarry leads list; it’s about calling your friends, your neighbors, the people you go to church with, the people you already know.
Who in the world wants to call their college friend and go, “You know anybody who wants to buy or sell a home?” — that’s just asinine. It feels dirty because it is dirty.
The same problem exists with geographic farming. Some of it is good — market reports, just sold info, etc. But you can only do that so often, which explains why we have the phenomenon of the “turn back the clock” postcards, recipes and local football schedules. None of those things, of course, position the real estate agent as a local real estate expert.
NAI: Advocacy as marketing
My a-ha moment was in realizing that at the same time that the Realtor was struggling to find something relevant to say to his or her sphere and farm, his or her association was dealing with dozens of issues at the local, state and federal level.
Issues that directly impact homeownership, private property rights and community development — all issues that are extraordinarily relevant to homeowners, homebuyers and homesellers.
Government affairs directors (GADs), association executives and association leaders were desperate to get the word out to the membership about this issue or that issue that impacts homeowners, whether said issue had to do with property taxes, zoning variances, new state legislation, transportation funding, national flood insurance, etc.
The fact is that most GADs are running around trying to put out fires because there’s always something going on somewhere.
And that content, the news about what’s happening in the policy sphere that impacts homeowners and communities, is exactly the kind of content that Realtors on the ground need for effective sphere and farming operations.
Imagine being able to update your sphere on property taxes or zoning updates rather than holiday cards.
Consumers can find out whatever they want on the internet when it comes to properties, bed, bath, price, even sale history.
But they’re not professionals. They’re not keeping track of local regulations on watering lawns or state funding of roads that impact traffic to their neighborhoods or national changes to mortgages. A Realtor who is staying on top of those issues and communicating them to the consumer cannot help but be placed in their minds as the local expert.
So when it comes time to sell their family home, who are they going to call? The random agent who is sending them pie recipes or the one who appears to know everything that’s going on in their local market?
The 20 percent of your “membership” who are your true members, who care about property rights, who care about homeownership, who donate to RPAC, who give a damn — they have a tool that helps position them as true local real estate experts.
And that marketing, that positioning, is the direct result of the association of Realtors living up to its core value of advocacy. This works.
The last word: NAI and member recruitment
One of the ancillary benefits of doing NAI is how it transforms the way that a local association goes about recruiting members.
Again, today, member engagement is recruitment; it is all sorts of social and based on the idea that people will show up for something fun, get sucked in and then be converted to a real member supporting the ideals of the organization.
NAI changes that by tying being a member to actual business development. If getting the word out about legislative and political issues that impact real estate directly leads to a Realtor member getting a listing, finding a buyer, then even those who are not at all involved have to take notice.
Getting them in the door to the pathway to real membership by doing those things that are core to the association seems a far more attractive and solid way of recruiting people to the cause of the association than yet another party.
Plus, there is this to think about: millennials.
Millennials want to believe in something bigger than themselves. They might be the most public-minded generation we have had in quite some time.
Sure, many of them want to make money and be successful like every other generation before them, but most get passionate if there is a real cause they can believe in and get behind.
The Realtor association, at its very core, as reflected in the Preamble to the Code of Ethics offers that cause, that something to believe in:
“Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. Realtors should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership.
“They require the creation of adequate housing, the building of functioning cities, the development of productive industries and farms and the preservation of a healthful environment. Such interests impose obligations beyond those of ordinary commerce. They impose grave social responsibility and a patriotic duty to which Realtors should dedicate themselves, and for which they should be diligent in preparing themselves.”
Rediscover what makes you an association, not just a retail storefront for the MLS. Offer the value of being part of something meaningful — that also happens to help people grow their business as real estate professionals.
Make the association an organization that doesn’t just take time, money and effort from the member but that also gives to the member in both a tangible and a meaningful way.
That is the path forward.
Robert Hahn is the Managing Partner of 7DS Associates, a marketing, technology and strategy consultancy focusing on the real estate industry. Check out his personal blog, The Notorious R.O.B. or find him on Twitter:@robhahn.