This is part of “Fighting Back,” a new series of profiles on how broker-owners are responding to industry disruption.
Glenn Sanford, CEO, chairman and founder of eXp World Holdings, parent company of the explosively fast-growing brokerage eXp Realty, believes the key to success is in repositioning his thinking — seeing brokerages as software companies that improve with the advancement of technology.
Sanford prides himself on being at the helm of a company that continuously differentiates itself from the competition — including through a wholly virtual world where agents can meet and train — and successfully leverages what it doesn’t have to come out on top.
What is your number one asset in this environment?
Differentiation. In my opinion, creating a true difference in what you offer is key. There are many brokerages which are almost identical to the agents who work for them.
Going from Brand A to Brand B is easy because both Brand A and Brand B essentially offer the same basket of benefits: reasonable split, same office amenities, same support, similar locations, similar practices. This sameness is a liability, not an asset.
When the value proposition is, “We provide better support and we help you with …,” you have no value proposition: you are generally speaking marketing based on the likability of the broker/owner, which is not scalable.
How do you leverage what you have?
The way I would think about it, at least for us, is: How do we leverage what we don’t have? We don’t have bricks and mortar in the traditional sense. Because of this, our agents, brokers and staff can think about the geography of the brokerage differently than a traditional brokerage would.
When you have a physical location, you create a framework for 20 minutes in any direction of the office as being your primary market area; when there is no physical office, the entire multiple listing service (MLS) market area becomes your market.
By repositioning as a cloud-based brokerage, we are able to reposition the value proposition in the minds of the agents and the consumers. Consumers like working with forward-thinking brands even if it means working in ways that are slightly uncomfortable (in some cases) since that represents an opportunity to grow as an empowered consumer.
What new things must you do to compete?
As we grow, we do need to shift some of our focus to the role that we can play (compared to the portals). By being one company we have some advantages that smaller regional or local franchise offices don’t have. We don’t have to deal with outstanding franchise agreements, and that should allow us to innovate in the portal space.
Are acquisitions the way to fend off change?
I’m not sure that is the right question. I think developing new skill sets or buying innovative companies that extend your differentiation creates an opportunity to be the disruptor rather than being a brokerage that tries to fend off disruption or change.
“Innovate or die,” should be the mantra. If your competition isn’t talking about you and trying to poke holes in what you are doing, you are probably on a long path to irrelevancy.
Do you explore alternative business models yourself?
I do. I think inside of each alternative business model is a seed of an idea that we can incorporate at some point into our business model. IBuyers, in my opinion, will be something that every brokerage will need to have in its arsenal at some point.
Understanding employee-based models like Redfin or flat-fee models like Purplebricks or how Compass is approaching technology just makes sense. If you don’t understand the draw or the impact each of these plays, then you are missing out on an opportunity to innovate internally.
Does your technology strategy change?
I think this is the one thing that is harder to get right, but once you get it right it’s about scaling it.
Again, I think it is about repositioning our thinking: if we think about each of our brokerages as software companies rather than real estate brokerages, we can look at each process as something that can be iteratively improved with technology.
Embrace it by adopting an Agile Mindset and allowing your teams to innovate and solve the information exchange challenges, which in reality are the challenges of the brokerage to lower its operating costs while providing a high level of service for your agents and end consumers.