Small is the new Big

Hey Brad – when I saw the title I knew what the post was about, then I clicked and saw the graphic and almost fell of my chair! LOL

Thanks for the mention, the change feels good!! I was just talking to someone about the advantages of working with a big name and I can see tons, especially for newer agents – they have training, they have systems in place and they usually have good support.

Once their support, big name and everything they have to offer looses importance and you see more cons than pros…..then a move would be in effect (although it is not at all easy and there are some nightmare stories around).

**Love the Seth Godin quote – EVERYTHING there applies to us**

Small is the new big – I agree. There are a lot of smaller agencies and solo agents making it because of the virtue of their independence. Without a huge corporate structure to work around, they can often get things take care of quicker, build more intimate, lasting relationships with their customers and create their own personal brand.

However, even big companies capitalize off of this concept; there are a lot of major real estate brands (e.g. Prudential, ReMax, Century21) that have lots of localized franchise offices all over the nation. Some of these franchises also have a decent amount of leeway in the way they conduct business and promote themselves under the umbrella of their parent company (e.g. an affiliated Realtor can have their own blog or totally custom website, as long as the logo of their umbrella company is displayed somewhere on the site).

In January I left C21 for RE/MAX, one mega-brand for another. “If you’re chasing the money,” my manager told me, “go to a 100% shop.” Meaning one without a 5% NAF.

Except … well, I’m a wuss.

I could hang my own shingle. I could join Jay locally. I could go to another place. But I want to have the brand behind me. Maybe I don’t need it behind me but it’s nice to have just in case.

Could I be doing better than $9K to the plus side at a 100% shop? Probably … but I’m still happy where I am, at least for the time being.

Brad – This is a timely topic for me! I spoke to my broker last week about the possibility of making a change. My decision is whether to go out on my own or another RE/MAX with lower fees.

I personally believe the RE/MAX brand is worth the cost here in Indianapolis. Although a big city, people seem to associate with a brand name. I do my own thing, have everything I need at home, rarely go in to the office – no mandatory meetings, don’t do floor time. I feel about as small and independant as one can be under another broker.

I am also mindful a broker could shut down my blog, whether a small company or a name brand. The only solution to that is to open my own – small does hold some attraction.

I hang out here to be with “people who get it”.

I agree that most “brands” have limited value. They’ve actually done very little to protect the integrity of their names. Most major brokerages will hire just about anyone and that doesn’t help them. One of the bigger advantages of being small and independent is the control over who you associate with. I doubt though that going independent brings much in the way of a cost break unless you’re happy to work without an office. I struggled with poor production when I worked from home.

Brad,

Could you recruit for me?… I will pay you. j/k but really.. I would.

Small is the new big is my mantra.

@Jennifer I think out of town buyers buy houses and not agents. We can all agree here that the internet is the place most relo buyers will begin their search. Small brokers can have equal or more web presence with today’s tools. Again, I feel the large brand value has diminished, even for relo. But let’s assume you were talking about the official relo program that large brand broker has across the country. Can an agent really be successful relying on this type of relo referral and then turn around and pay 40% or more back to the large brand broker? Many agents would rather just blog and generate their business, right Teresa?

@Jay and @Brad – there is a huge opportunity to have many RE.net folks work together in local markets. Someone should work on recruiting to match RE 2.0 agents together with small brokers.

I just want to add that the big dogs usually have more limitations, and I’ve found that the limitations are not so much about protecting the brand (which I would understand), it has to do with where the money ultimately goes (like relocation and referral rules for example).

I liked my broker and the people in the office, and the environment was great (as a matter of fact I will miss a lot of people), but it’s beyond the people and the brandk…….if your feel your business is being limited and not reaching its full potential as an independent contractor, then what’s the point?

Very timely….I’ve been having this discussion with colleagues here quite a bit. For me, I agree with those that have said that the managing broker plays a large role in whether the big brokerage value proposition does in fact add value. I think each agent needs to look at where their business is coming from. If it’s all self generated and the company isn’t contributing to that (via floor time, internet leads, relocation, whatever) then you have to look at the numbers to see if it makes sense to be there..

(and I’m thinking that I should go out and buy “Small is the New Big”…still working on “Meatball Sundae” right now!)

@ Eric – not to rain on the compliment, but that graphic has been on the web for a while. But still, its a nice use for this particular topic. 🙂

@Bill If I made everyone happy with my first post, then I would have quickly become irrelevant. I’m glad you disagree and welcome the discussion of differences. Congratulations to you and your growth. I am certain there are some offers you can’t refuse in this business. However, I have a few questions for you, Mr. big brand name broker,….

After becoming a part of C21, do your agents now pay more than when you were small?
If so, how do you justify the increase to broker/franchise/owner and less to agent?
If not, then how does C21 make any money from you and your agents?
(I realize your existing agents may have been grandfathered in, but my hunch is new agents pay more than they use to when you were small broker)

By your response, I assume it now costs agents more to be with you at C21.

I just think many agents would prefer to work with great brokers like yourself without having to pay C21. I simply encourage all agents to consider local small brokers (like you once were). They may very well join up with a super-small-broker like @Bill Lublin and have years of quality production (and get the insider benefits if the small broker sells out).

@ines we’ll save that topic for separate post. i have plenty of opinions there as well.

The web 2.0 movement has enabled small brokers to capture market awareness and offer enhanced services at a value compared to many traditional brokerage brands. Small brokers can roll out new technologies faster due to scale and aren’t afraid to be early adopters on beta tools…

…Blogging is also something small brokers seem to ‘get’ more than large brokers.

There’s one more piece that makes this web 2.0 movement tick and that enables small companies to utilize a mixture of new technologies, common sense and (why not?) a little genius to make a significant stand in this new landscape. I like to call it search centralization. The ability to write compelling content in a real estate blog would be severely undermined if it could not by found and read by your target audience. In a single word this piece is called: Google. Their domination of the web search market combined with outstanding content and smart SEO strategies have become the winning combination that allows us small brokers to generate significant amounts of leads that were virtually untapped before by the large firms.

amen @Erion

@Brad, you’re going to have me blushing soon 😉

I would not disagree that it may cost more to do a thing (whatever it is) but I think the better measure (or maybe more appropriate) question is where did they make more? And I don’t think that anyone model is”right” or “wrong” they’re just choices. And we all need to make the choices that work for us. I would never suggest to any agent that they affiliate with any company because of a brand, or because they are independent, or because they have great offices, or have no offices at all and operate virtually. I think that agents should affiliate with a person, team, company or culture that makes them feel comfortable while helping them to achieve as much as they desire. One size doesn’t fit all, and even when you find a size that does, sometimes you or they grow in different directions.

My personal prejudices would lead me to technology heavy companies with a strong reputation for integrity and the ability to grow my career. But those are my personal prejudices, and should not be construed as anything else.

@Erion I agree that technology and its appropriate application really assist the small broker to generate leads, but that isn’t exclusive to small brokers and the fact that a company is larger or smaller doesn’t make them inherently better or worse at executing technology, or generating leads ( I think we do an outstanding job at that, but that is a focus for us) And then, from a business perspective come the issues of recruiting and training and supporting, and paying overhead…so it gets complicated – but as I said above, it ends up with how much money will I have in my pocket at the end of the day – for both the broker and agent- and not each at the expense of the other, but symbiotically

I just want a place to hang my license and to not be bothered by all of the political crapiola and hype; a manager who doesn’t try to manage me (not manageable anyway) and to be generally left alone. The brokers brand doesn’t mean diddly to me and most brokers/managers can’t answer the few questions I come up with anyway. It’s really pathetic.

I don’t go to sales meetings and have explained that it is better that I don’t. They always have some schmuck trying to sell either some inferior product to the agents or are trying to tell them how to pass along the cost of a product to a buyer. I can’t help myself, I just tear them apart. It’s better just to leave me to my own devices, lol…

I remember a time when brokers here offered training that was actually worth having. I see the training they are now offering and the dismal results of that training and I just shake my head. They are pushing door knocking, taking large groups of newbies out to descend on neighborhoods weekly. After 4 months if one of the 200 or so newbies actually gets a hit they broadcast company wide how successful the program is. Yeah right!

Up desks have disappeared, all lead calls direct to broker/manager = no leads to any of the starving agents on the floor. Brokers quietly (sneaky) referring those leads to a couple of agents for a large referral fee over and above their cut. Disgraceful!

A few of the brokers here made attempts at blogging. Didn’t bother to figure out how to do it, just jumped in. Most jumped out in very short order because they didn’t get instant results, I had a good laugh. From the outside everything looks easy!

I thank the powers that be daily for discovering blogging and for the blessings it brings to the table. Any broker who got in my way would be plowed down instantly. Take my blog down? Never! License would be hung elsewhere in less than a few minutes. And all the referrals going into the office from my blog would be gone with it.

They leave me alone. lol………..I would too!

The big brokers really don’t have much value, here at least, I don’t see them continuing forward in the same way as we transition out of this depressing market. So many of us are so very independent and like it that way, they really don’t serve much of a purpose for us any longer.

@Ines; Good point… for many agents going head up against the broker is an issue especially if you are in the same niche.

@Franchises- I think it boils down to what works for you…One thing that helps our agents in our brokerage (RE/MAX) is that the name still carries a national wallop. How do I know?

I rank #1 for most of the major terms in Louisville (city real estate, city homes, city homes for sale, city remax etc…etc..)

city remax is our second most popular search term and city st remax is #7…so basically we are eating other peoples’ lunch with the search engines and that brings us buyers.

That having been said, I do understand the trend to BRAND YOURSELF and go it out there as a broker. I think that may in fact be because many of the franchises are not offering as much as they could to their brokers and agents…

“At the end of the year, they all found that the brand had added value to their efforts and we never looked back.”

I look at this metric all the time and I have a simple formula (for my simple mind) to evaluate the value of the brand. Every year I look at every transaction and evaluate the source of the business. If the brand causes one transaction per year, and I were to allocate 100% of the earnings for that transaction as having paid all the royalties for the whole year, where would I stand? If the brand brings any additional transaction, my payback on the royalties far exceeds the royalty I pay. So far, over the past 6 years, the ERA brand is responsible for 3-5 transactions per year that we would not have received otherwise. I will say that Linda and I utilize ERA’s unique selling proposition and the tools better than most agents in the system. At the margin, 3-5 transactions per year for us, is a life changing number and ample reason to stay the course. That being said, we have always maintained our CRM system apart from the in house tools, and we always strive to be top producing agents in our little shop. Good for us, good for the broker.

I’m fairly new to the Real Estate Sales business, my license is with a large brokerage in Spokane. As an independent contractor I do all my own lead generation and marketing. The brokerage provides me a lot of support services and I don’t worry any about compliance with state regulations. I work hard and ethically. And I feel like the underdog most of the time. Still I have my own successes and I’m working to be nimble in a 2.0 age.

Jim Grapes is a Realtor and represents homebuyers looking for homes for sale in Spokane, Washington. Before his career selling Spokane real estate he served in the US Navy as a Supply Officer on many ships and stations around the globe.

Rich said it earlier its not wheather it is a big form or a small one. Its the one that is responsive to your needs and it provides you a chance to flourish. Big ones will do it sometimes and then small ones will do it. The roles change as the people change. Its how the owner or manager wants to manage. I do not depend on the broker for any leads and try to get them on my own.

Brad, thanks for the mention. I will say that when I was at “big” it was pretty small. My broker has always been a good guy, and sought to leverage the brand for the benefit of the agents.

But, I think that Matt’s model offers more for what I want to be. And the smaller structure is more flexible. And faster to react. And more fun. And more challenging…

I am stoked about it.

Lani – that is interesting. And while it’s a small data set, I think it speaks volumes and corroborates what I am seeing too.

When I left my previous brokerage, and the C21 mothership, the broker said to me, “You need a big brand. People won’t respect Thompson’s Realty”.

Within a week, we had our first listing. When we met the client, he said, “I want a small ‘Mom and Pop’ shop like you guys. I feel like I’ll get better service that way.” That may or may not be true, but it was this guys perception.

I can’t tell you how many clients we had when we were at C21 that never even knew (or cared) we were at a C21 office. Countless times we’d hand them a business card after finally meeting face-to-face and they’d say, “Huh, I had no idea you were with Century 21”.

I’m not saying indie/small is better than franchise/big. But in my experience, it doesn’t seem to matter to the vast majority of real estate “consumers”.

Incidentally, after 4 months in business our brokerage and its 6 agents are now carrying more listings and have more in escrow than my former C21 broker and his 42 agents. Respect has to be earned and delivered. It doesn’t appear like magic with some name or logo.

@Lani those are exactly the same results we get on the street here in our market

@Jay like you said, I don’t think brand matters as much anymore and if there is a trend in this area, then it’s for consumers seeking the indie/local flavor

@Jim I couldn’t agree more. The gold jackets are brilliant.