The real estate industry finds itself at a branding crossroads. The traditional franchise template has turned sour. Many agents find the usual “personality-branded” approach of independent brokerages not that helpful to their businesses. In too many instances, an agent’s choice in brokerage affiliation is one between the lesser of two neutrals, neither of which speaks to them directly.
Brokerages are also trying to differentiate themselves in some meaningful way that will make a connection with their agents. After all, how long can a broker continually beat a new-and-improved drum?
Historically, franchises packaged and sold their brand as a product for their sales agents to use in helping drive their businesses. The product was the value added benefit their brand brought to the table.
The brand might have been sold as a product to sales agents, but to the consumer, it’s always been a non-starter. It’s not like anyone ever said; “I deal with Re/Max agents only!”
The truth is, a consumer’s choice in selecting a sales agent automatically comes with a broker who, for the most part, has no impact or involvement within the sales cycle. Given that, who is the broker’s product for again?
It’s a service, not a product
Independent brokers can take their first steps toward the future in realizing what they are selling to their agents is a service and not a product. The consumer doesn’t care about the broker. A real estate brokerage is not a product; it’s a service. A service that, in all practicality, gives benefit to only those who are in sales.
The real challenge for independent brokerages today, and in the future, is in the war over agent affiliation. Industry churn rates dictate brokers need a continual stream of new agents just to keep even. So, how does a broker grow? How can a broker leapfrog competition?
In Atlanta, there are approximately 50,000 to 60,000 licensed sales agents. This represents the total market share for any brokerage competing for agents.
The odds an independent, single-message broker could capture a meaningful market share, say 10 percent, are long at best — Powerball long. Nonetheless, that is what marketing is for. And, every marketing professional for last 100-plus years has looked in one direction for help: Cincinnati.
P&G brand management
Ground zero for modern day marketing is May 13, 1931. That was the day when future Procter and Gamble (P&G) CEO Neil McElroy submitted a three-page memo proposing a radical new idea that would later be called “brand management.” Within this semi-ancient text, he refers to “creating a marketing organization based on competing brands managed by dedicated groups of people.”
In the consumer space, a company with a single product, however successful, will begin to hit its market share ceiling around 40 percent. That same company, with 10 different products in the same market space, each with its own unique value proposition, can see their market share possibilities nearly double.
For a company like P&G, its Tide laundry detergent would take it only so far. But, its Tide laundry detergent in concert with its Cheer, Bold, Dash, Ariel, Gain and ERA detergents would take it much further.
The average television viewer watches several Procter and Gamble ads every day. In most cases, the viewer has no idea, and nor does he or she care, about any P&G involvement. The corporate structure behind the brand/product is irrelevant; it’s viewed as supportive admin. Ever see a corporate P&G ad?
Without a franchise to lug around, independent brokers are realizing the quickest way for growth might be to incorporate the principals of classic P&G brand-management.
The consumer has a relationship with the sales agent and could care less about the broker in much the same way as the fans of Ivory soap don’t think too much about the company who made it.
How agents can use DBAs to their advantage
Today’s brokers and P&G have a lot more in common than you think. Given that, the real estate broker of the future might very well look like a mini Procter and Gamble.
In Atlanta, brokers allow agents to self or group brand under a tradename of their choosing. An agent DBA (doing business as) creates the virtual realty company that allows the agent, or groups of agents, to establish their own brands.
Allowing agents to create their own brand is the critical keystone to the future of the brokerage business. Even today, agents don’t like being given their brand, and considering the brand-crazed nature of our social media world, that view isn’t likely to change much going forward.
Decades ago when faced with a marketing challenge regarding its soap market share, P&G didn’t just keep reinventing Ivory; it made a ton more soap, which in turn expanded its market potential.
Brokers can continue to market their own, new-and-improved realty brand, but if they want real expansion capability, they will need to embrace DBAs and allow their agents to have their own brands and their own voices.
In an industry as well-tread as real estate, it’s doubtful that any one broker has the vision that thousands of agents will rally around. More realistically, agents will rally around brokers who permit and encourage many different visions and voices.
If you find yourself thinking, as marketing managers have for six generations, “If it was good enough for P&G, it just might be good enough for us.” Well, you wouldn’t be wrong.