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The real estate business model, branding, and loyalty

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Toni&Guy, founded in London 40 years ago, is an internationally recognized brand in the academy and hair industry. Their model is founded on levels of education, and those levels and dedication to continuing education determine their wage for each client. Each individual stylist is exclusive to their craft. In other words, those who cut hair cut hair, and those who color hair color hair. The entire franchise is built around the academy.

Before I begin, I would like to make clear that this is not a comparison of practicing real estate professionals to hair stylists, rather, it is a comparison of models along with successes and failures of models in the realm of consumerism.

What you’ll discover at the onset inside of Toni&Guy is a question at the front desk about choosing your stylist’s level of education. If you think for a second that a simple men’s haircut could not possibly cost more than $35 bucks, you’d be mistaken- it’s more, and it can go even higher. What is disturbing is that no hair stylist is created equally, and the level of education means nothing when you consider that you have no idea how current the stylist is, whether or not they are familiar with modern styles, and if will they listen to you (or take a more vain “I know best approach” with your hair). You have no portfolio of work or references to view, nor do you have anything to actually evaluate other than a certificate on the wall. Your wallet is the only thing between you and the front desk clerk who is now evaluating your ability to pay- obviously, you’ll choose higher ed over risking your hair, right?

Now, I’m not saying this is a racket, as we in the real estate industry hold continuing education in high regard as a must in most circumstances. It is how you as a practitioner keep up with changes in local and federal laws as well, but practically speaking, savvy isn’t a skill learned in a classroom- business savvy is a gift and rarely is a certificate handed out for such a skill (unless you count the top producer plaques on the wall above their desks).

Further, I challenge the model of education levels and time in service based on the premise that it’s only good for the model and not the actual stylist. The entire branding of the business is built to drive loyalty to Toni&Guy from the start, beginning with the fictitious name of the stylist (no, that is not their real name you’ve been given). Now obviously, this is said to be a policy to protect the stylist, but in fact it is a policy derived to protect the salon brand from the stylist taking their clients with them if they should chose to leave Toni&Guy.

Protecting a brand from loyalty erosion is an illusion to the brand. I say this strictly from experience. If my stylist leaves the establishment, so will I, unless I’ve been introduced to another stylist along the way and connected with them. Otherwise, I’ll probably slip through the cracks and find a new place to cut my hair, just as I would if my agent left a prestigious real estate brokerage- I would want to follow my human agent, not a brand.

The disconnect in this scenario is the failure of the brand to partner with the agent in the process. Toni&Guy empowers their agents with continuing education the same way many real estate brokerages do, but beyond the receptionist, there is no customer service from the broker or Toni&Guy brand ambassador (or manager). Consumers disavow an entire brand based on a single interaction with an agent (or stylist) because there is no connection readily available- do brokers call their agents’ clients to check up on them? Do managers come out to offer explanation of services? No, they do not. And they should, because regardless of what the agent (or stylist) thinks, that client is in agreement to the broker (or brand) and that broker (or brand) has a responsibility to ensure follow through- that is what builds brand loyalty.

Now in fairness, the Toni&Guy Brand in general is nothing to scoff at, in fact, I do take the training they receive very seriously, especially when I meet a stylist in a new salon, and it’s my understanding that most salons do hire based on that training and appreciate it as well. This is a plus factor for the real estate brokerage as well I’m sure. When hiring, we want the agent with the best training, however, we’re also going to take a hard look at actual execution, production levels, and follow through before hanging our hat on a new sheriff in the office.

In all, I think Realtors and brokerages should take a very hard look at this model and ask themselves how do each protect themselves? Is the academy approach the right way to go? Is basing price levels on education or length of service appropriate, and can an agent dedicate themselves to a brand who allows no consumer connection whatsoever?

Benn Rosales is the Founder and CEO of The American Genius (AG), national news network for tech and entrepreneurs, proudly celebrating 10 years in publishing, recently ranked as the #5 startup in Austin. Before founding AG, he founded one of the first digital media strategy firms in the nation and also acquired several other firms. His resume prior includes roles at Apple and Kroger Foods, specializing in marketing, communications, and technology integration. He is a recipient of the Statesman Texas Social Media Award and is an Inman Innovator Award winner. He has consulted for numerous startups (both early- and late-stage), has built partnerships and bridges between tech recruiters and the best tech talent in the industry, and is well known for organizing the digital community through popular monthly networking events. Benn does not venture into the spotlight often, rather believes his biggest accomplishments are the talent he recruits, develops, and gives all credit to those he's empowered.

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22 Comments

22 Comments

  1. Matt Thomson

    January 21, 2011 at 2:05 pm

    I may have completely missed the point as I got distracted by something you said early on.
    “Before I begin, I would like to make clear that this is not a comparison of practicing real estate professionals to hair stylists…”
    Just made me laugh with how frequently we compare ourselves to doctors and lawyers (“Would you hire a discount doctor if you were sick?”), I think that in many cases the comparison between the hair-stylist is far more apropos than the comparison with doctors and lawyers!

  2. Erica Ramus

    January 21, 2011 at 3:39 pm

    I agree! I believe that people hire the AGENT for the most part, and fire the AGENT/BRAND if things go wrong. I believe when things go right the agent gets the praise and yet if things go poorly they consumer then in fact WILL remember that and won’t go back into that brokerage.

    If an agent leaves, many times their clients will follow them. If the agent is doing a good job the client doesn’t care who they hang their license with, they’ll follow along.

    So, is brand really important? I used to think so but have changed my mind over the past few years. Very few consumers walk in my door and ask for any agent who can help them. They walk in and know who they’re going to ask for.

    Brand is seriously overrated. I would put more importance on the broker and his/her office than on the logo above the door. A good broker can have a good office no matter whose name is on the door. a BAD broker can have a bad office no matter how good the brand itself is.

    Question: Do consumers even NOTICE if the logo above the door changes? If the “real estate office” on the corner keeps the same sign and plasters a new logo over the old one, will any consumers think twice?

  3. Ruthmarie Hicks

    January 21, 2011 at 9:37 pm

    Around here there still appears to be some remnant of the brokerage brand particularly in the smaller villages where they convince people that an agent that live (gasp!) a whole 4 miles away can not possibly know the area well enough to list their house. This misconception still has legs and works very well in areas where one or two brokerages dominate the town or village. These are often franchises of some of the major players like Coldwell or Sotheby’s. But that loyalty probably does not extend beyond that particular town. If a resident moved to another state – that brand loyalty would be unlikely to hold. In this case, I’ve seen agents stay in a brokerage fearing that leaving would cause them to lose “loyal” clients – though that might be an oxymoron in that case.

    At the end of the day – the trend appears to be moving towards the individual agent. But the transition is surprisingly slow around here.

  4. JIm Gatos

    January 22, 2011 at 10:55 pm

    The ONLY thing a brand name will eventually be good for is to attract the agents to come work for certain brokerages based on the brokerage’s USP (unique selling proposition, NOT to attract the general public to buy real estate with a certain brand. The public really doesn’t give a hoot..

  5. Missy Caulk

    January 23, 2011 at 7:14 pm

    Glad to be compared to someone other than a Dr. or a Lawyer!

  6. Sara Bonert

    January 24, 2011 at 9:43 am

    “Consumers disavow an entire brand based on a single interaction with an agent (or stylist) because there is no connection readily available..” Actually I think consumers disavow the industry as a whole more so than an induvidual brand when something negative happens, unfortunately.

    I think it is worth noting that there are a few brands that have done a good job seperating themselves based specifically on defining their niche. For example, if I had a $10M condo to sell here in Chicago, Sothebys would at least be a brand of agent I’d interview. But more to your point, a human relationship or reputation of an individual would likely win over a brand.

  7. Agent for Movoto

    January 24, 2011 at 12:33 pm

    Ooh. I’ve never used Toni&Guy, and now I’m not going to.

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Business Marketing

Use nostalgia as a marketing niche for your business today

(MARKETING) A market that is making waves is found in the form of entertainment nostalgia. Everyone has memories and attachments, why not speak to them?

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nostalgia

Is it just me or does it seem like there is something for everything nowadays? Let me clarify, as that is a rather broad question…

With the way communicating through technology has advanced, it’s become much easier to connect with those who have shared interests. This has become especially evident with interests in the entertainment community.

Entertainment nostalgia

It now seems like there is an event for every bit of nostalgia you can imagine. Autograph shows, meet and greets, and memorabilia collections of all kinds are held in convention halls all around the world. (To give you an idea of how deep this thing goes, there was a “Grease 2” reunion convention sometime within the last five years. Being that I’m the only person I’ve ever met who likes that movie, it’s amazing that it found an audience.)

This idea of marketing by use of nostalgia is something that is becoming smartly tapped and there are a variety of directions it can go in.

For example, the new Domino’s ads feature dead-on tributes to “Ferris Bueller’s Day Off.”

What’s your niche?

If you’re a fan of anything, it’s likely that you can find an event to suit your needs.

And, if you want to take it a step further, you can think outside the box and use nostalgia as a marketing tool.

I recently began dabbling in social media gigs that have brought me to a few different fan conventions. One was a throwback 80s and 90s convention that featured everyone from Alan Thicke to the members of N*SYNC. Another is a recurring convention that brings together fans of sci-fi, horror, and everything under that umbrella.

I was amazed by the number of people that came out to these events and the amount of money that was spent on the day’s activities (autographs, photo ops, etc.). I was energized by the fact that you can take something you have a great appreciation for and bring together others who share that feeling. Watching people meet some of their favorite celebrities is something that is priceless.

Hop onboard the nostalgia train

If you’re a fan of something, you don’t have to look too far to find what you’d enjoy – going back to the aforementioned “Ferris Bueller” example, there is a first-ever John Hughes fan event taking place in Chicago next month that will bring fans to their favorite Brat Pack members.

In the same thought, if you have an idea, now is the time to find others who share that interest and execute your vision.

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Business Marketing

5 tips to help you craft consistently high-converting email marketing

(MARKETING) Email may seem too old to be effective but surprisingly it’s not, so how can you get the most out of your email marketing? Try these tips.

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Email marketing

Email marketing might seem archaic in comparison to modern mediums like social media, blogging, and podcasting; however, it actually remains one of the highest converting options marketers and small businesses have at their disposal.

But Why Email?

Hopefully, you believe in email as an effective marketing channel, but in case you have doubts, let’s hit the reset button. Here’s why email marketing is worth investing in:

  • Email is one of the few marketing channels that you have total control over. Unlike a social media audience, which can disappear if the platform decides you violate their terms, you own your email list.
  • Email is considered very personal. When someone gives you access to their inbox, they’re telling you that you can send them messages.
  • From a pure analytics perspective, email gives you the ability to track behaviors, study what works, and get familiar with the techniques that don’t.
  • The ROI of email marketing is incredibly high. It can deliver as much as $44 in value for every $1 spent.

5 Tips for High-Converting Emails

If you’ve been using email, but haven’t gotten the results you’d like to, it’s probably because you’re using it ineffectively.

Here are a few very practical tips for high-converting emails that generate results:

  1. Write Better Subject Lines: Think about email marketing from the side of the recipient. (Considering that you probably receive hundreds of emails per week, this isn’t hard to do.) What’s going to make you engage with an email? It’s the subject line, right?If you’re going to focus a large portion of your time and energy on one element of email marketing, subject lines should be it.The best subject lines are the ones that convey a sense of urgency or curiosity, present an offer, personalize to the recipient, are relevant and timely, feature name recognition, or reference cool stories.
  2. Nail the Intro”: Never take for granted the fact that someone will open your email, and read to the second paragraph. Some will – but most will scan the first couple of lines, and then make a decision on how to proceed.It’s critically important that you get the intro right. You have maybe five seconds to hook people in, and get them excited. This is not a time to slowly build up. Give your best stuff away first!
  3. Use Video: Email might be personal, but individual emails aren’t necessarily viewed as special. That’s because people get so many of them on a daily basis.According to Blue Water Marketing, “The average person receives more than 84 emails each day! So how do you separate your emails from everyone else? Embed videos in your emails can increase your conversion rates by over 21 percent!”This speaks to a larger trend of making emails visually stimulating. The more you use compelling visuals, the more engaging and memorable the content will be.
  4. Keep Eyes Moving: The goal is to keep people engaging with your email content throughout. While it’ll inevitably happen with a certain percentage of recipients, you want to prevent people from dropping off as they read.One of the best ways to keep sustained engagement is to keep eyes effortlessly moving down the page with short and succinct copy.One-liners, small paragraphs, and lots of spacing signal a degree of approachability and simplicity. Use this style as much as you can.
  5. Don’t Ask Too Much: It can be difficult to convey everything you want to say in a single email, but it’s important that you stay as focused as possible – particularly when it comes to CTAs and requests.Always stick to one CTA per email. Never ask multiple questions or present different offers. (It’ll just overwhelm and confuse.) You can present the same CTA in multiple places – like at the beginning, middle, and end of the email – but it needs to be the same call. That’s how you keep people focused and on-task.

Give Your Email Marketing Strategy a Makeover

Most businesses have some sort of email lists. Few businesses leverage these lists as well as they should. Hopefully, this article has provided you with some practical and actionable tips that can be used to boost engagement and produce more conversions. Give them a try and see what sticks.

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Business Marketing

Here’s how one employer was able beat an age discrimination lawsuit

(MARKETING) Age discrimination is a rare occurrence but still something to be battled. It’s good practice to keep your house in order to be on the right side.

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Jewel age discrimination

In January, the EEOC released its annual accounting for reports of discrimination in the previous year. Allegations of retaliation were the most frequently filed charge, which disability coming in second. Age discrimination cases accounted for 21.4% of filed charges. As we’ve reported before, not all age discrimination complaints rise to the level of illegal discrimination. In Cesario v. Jewel Food Stores, Inc., the federal court dismissed the claims of age discrimination, even though seven (7) plaintiffs made similar claims against the grocery store.

What Cesario v. Jewel Food Stores was about

In Cesario, all but one of the seven plaintiffs had spent years with Jewel Food building their careers. When Jewel went through some financial troubles, the plaintiffs allege that they began to “experience significant pressure at work… (and) were eventually forced out or terminated because of their age or disability.” Jewel Food requested summary judgment to dismiss the claims.

The seven plaintiffs made the same type of complaints. Beginning in 2014, store directors were under pressure to improve metrics and customer satisfaction. Cesario alleges that the Jewel district manager asked about his age. Another director alleges that younger store directors were transferred to stores with less difficulties. One plaintiff alleged that Jewel Food managers asked him about his retirement. The EEOC complaints began in late 2015. The plaintiffs retired or were fired and subsequently filed a lawsuit against their company.

Age discrimination is prohibited by the Age Discrimination in Employment Act of 1967, (ADEA). The ADEA prevents disparate treatment based on age for workers over 40 years old. However, plaintiffs who allege disparate treatment must establish that the adverse reactions wouldn’t have occurred but for age. Because none of the plaintiffs could specifically point to age as the only determination of their case, the court dismissed the case.

A word to wise businesses

Jewel Food was able to demonstrate their own actions in the case through careful documentation. Although there was no evidence that age played a factor in any discharge decision, Jewel Food could document their personnel decisions across the board. The plaintiffs also didn’t exhaust all administrative remedies. This led to the case being dropped.

Lesson learned – Make perssonel decisions based on performance and evidence. Don’t use age as a factor. Keep documentation to support your decisions.

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