Who Is Your Customer?

I spent almost 20 years working with Century 21 Real Estate.  I was a salesperson, a broker, owned offices, sold them and then spent a dozen years working for the Franchisor, primarily developing training.

Working in the Century 21 Ivory Tower – International Headquarters, where the rubber meets the clouds – I heard the Executives who ‘ran’ the company say (on many occasions), ‘We’re not in the real estate business;  we’re in the franchising business.’

Being a real estate guy, this really bugged me.  I believed that my job was to help my broker members find more customers and sell as much real estate as possible. But that was an afterthought to the company brass. To them, the Century 21 Broker was the customer – and they wanted to get as many of THEM as possible.  AND they wanted to find as many ways to pull revenue from their existing franchisee base as they could.

It was the ultimate disconnect.  And that attitude of ‘an outlet on every corner,’ and ‘nickle and dime ’em to death’ is how that brand came to mean absolutely nothing in the modern real estate world. Think about it:  what does the brand Century 21 stand for? See, I toldja so:  the powerful identity they crafted 40 years ago is gone.

I’ve been thinking about this a lot lately – but not about Century 21.  I’ve been thinking about Help-U-Sell Real Estate and how subtly but completely different we are.  At franchise headquarters and in the minds of everyone who works for the company, there is no doubt who our customer is.  It is the same customer our franchise brokers have: the buyers and sellers of real estate.

We see the franchisee/franchisor relationship as a partnership.  We are working together to realize a goal we have in common:  to work with ever increasing numbers of buyers and sellers and to grow our presence and marketshare year after year.

At Century 21, questions about what the brokers were getting for all the money they paid the franchisor arose at every meeting. Brokers who entered the system full of hope quickly soured, often realizing they were paying the franchisor more than they were taking home themselves. The relationship became adversarial at its core:  us vs. them.

I’ve been hanging out with Help-U-Sell for 14 years now and in our latest incarnation – the one that began in 2009 – I have rarely heard any of that kind of talk. Because we view our brokers as partners (with corporate as the supporting cast), because we have the same bulls-eye, because we are all real estate people, there is a positive sense of participation and unity in the group.

We don’t look for ways to extract more revenue from our franchisees.  Instead we look for ways to help them do more business.  We don’t sit in a vacuum and dictate how things will be.  We ask our people in the street how they should be and how they could be better and then we go to work together to move in that direction. It is a refreshing approach!

And if you can’t tell it:  I’m proud as punch to be part of this company.  I love who we are, how we operate, what we stand for and how we collaborate.  We are on a mission to not only sell more real estate, but also to change the way real estate is sold; and there ain’t nothin’ better than that!

A Good Chuckle

Beverly Sonnier, a Help-U-Sell Broker in Tucson, AZ, forwarded me this email yesterday:

smartagents

(Note:  this is a screen capture of the message so the links don’t work.)

I think this is the funniest thing I’ve seen in awhile! He’s talking about ‘Discount’ brokers, but he means Help-U-Sell (even though we are NOT a discount broker)*.

But he’s saying the only way to compete with us is to go somewhere where we aren’t! The only way to beat us is to go somewhere else!

That’s funny enough.  But then he says, about his ‘Niche’ sellers, ‘These sellers pay a fair commission – day in and day out.’

There is nothing fair about percentage based commissions.  6% of your home’s value is obscene, sure, but even 2% would be unfair! What does a percentage of your home’s value have to do with what it takes to get it sold?  (Absolutely Nothing!) And, if your real estate broker is charging a percentage, that mean the person with the less expensive home is going to pay LESS than you for the exact same service! There’s NOTHING fair about that!

Listen:  the ordinary real estate world runs on a business model that hasn’t changed in 70 years.  It’s old and stale and consumers are rapidly figuring that out.  One thing this 21st Century has shown us is that consumers will quickly jump to anything they perceive to be faster, better, more modern or more logical.  Consider the rise of Amazon and the decline of Macys, J C Penney and Sears.  Faster, better, more modern, more logical:  that pretty well describes Help-U-Sell Real Estate, except that you can also add in Less Expensive!

*A discounter finds ways to cut the expense associated with providing goods or services.  They might use less expensive material or provide fewer customer service personnel.  In real estate, a discounter would cut something – and it would probably be marketing and service.  That’s not Help-U-Sell.  We charge less because our business model is different:  it is modern and efficient.  Our sellers get all of the marketing and personal service ordinary brokers deliver and actually more . . . they just pay less. 

What a Trump Presidency Might Mean for Real Estate

The inauguration hasn’t happened yet, so all we can do is speculate but, based on what was said during the campaign, I won’t be surprised to see some of the following:

  1.  Reduction of regulation in Banking.  Dodd-Frank created a significant layer of bureaucratic reporting and procedure that banks had to follow.  The goal  was to ensure that nothing like the great melt-down of 2006 could happen again.  It has clearly been in Mr. Trumps sights as well as those of the Republican Congress.  Look for an easing of government regulation in the banking industry that may mean easier access to money.
  2. Reduction of regulation in Construction.  Trump has clearly singled this out for action.  In an address to the NAHB, the said upwards of 25% of the cost of new housing is compliance with government regulation.  His goal is to get that closer to 2%.  In addition to having home builders dancing in the street, this might mean more affordable housing.
  3. Easing of lending requirements on government backed mortgages.  Though not much has been said about Fannie Mae, Freddie Mac and FHA, it would stand to reason that, given the easing of regulations in other areas, a relaxing of guidelines here will happen as well.  It could put home ownership back into the realm of possibility for many.
  4. What about the mortgage interest deduction?  Some in Congress have had their sights set on this for years.  Mr. Trump said he wasn’t going to take it away – but that was a campaign promise. His plan to reduce corporate taxes and initiate new tax cuts for the wealthy may stimulate the economy, but the money to run the government is going to have to come from somewhere. I’m not suggesting we’re going to lose that deduction, but I am saying it might be vulnerable. That’s a very good reason to contribute to RPAC (The Realtor Political Action Fund). They have been successfully fighting for that deduction and for home ownership for decades.

So what does a Trump Presidency mean for those of us who work in real estate?  Based on what I’ve said above, the outlook could be good.  It could mean easier access to mortgage money and lower prices, which could mean more activity. Could.  It also could mean we have to be very careful not to get back into the kind of mess we had a decade ago.

By the way, let me just state what might not be obvious.  This is not a political post.  I’m not a Trump or Clinton supporter.  I’m not a Democrat or a Republican.  I don’t beat the drum or wave the banner for either side.  I’m a Help-U-Sell Real Estate Professional and I watch the market every day for clues as to what’s on the horizon.  As of today, being the positive person I am, this is what I see.

Must Read If You Are Marketing By Carrier Route

We all got so granular over the past few years!  And that’s a good thing!

Rather than shotgunning our message all over God’s Green Earth (and paying a hefty toll for the privilege), we started looking at our marketplaces through a magnifying glass.  Instead of marketing by Zip Code, we started breaking down the Zips by Carrier Route.

Most Help-U-Sell offices refined their marketing targets down to 5 to 10 Carrier Routes, depending on turnover rate and budget (That usually works out to 3,000 to 8,000 households).   The problem is, since every Carrier Route has its own turnover rate, it became difficult to know what the OVERALL turnover rate was in your complete target.  Most Brokers just kinda guessed.

Does that make any sense?  You just spent all this time and energy carefully tearing your marketplace apart so that you could construct a productive target.  Instead of doing what most Brokers do (which is to guess or make the decision based on hearsay or gut), you based the whole process on FACTS.  Cold hard FACTS.  And now, you’re going to guess at the turnover rate within your target?  I think NOT!

So, here’s what you do:

tor2-1

Add up all of the households in all of your Carrier Routs, then add all of the houses that sold in the past 12 months in all of the Carrier Routes . . . . Then just divide Homes Sold (the small number) by Households (the large number).

Those of you in a Coaching Group can use this AMAZING number in the Market Analysis tab of your 12 Month Goal Setting Worksheet, here:

torate22b

I sincerely hope this keeps you guys from guessing about your business!  And maybe the whole process will intrigue some into investigating the Coaching Group opportunity.  I hope so.  We’ve got openings.