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Brokerages of today don’t truly motivate or breed loyalty – why?

Tradition versus reality

For the past several years, the rise in the boutique brokerage has rapidly increased, putting traditional big name brokers at a disadvantage. In some states (like here in Texas), all it takes to be a broker is two years being licensed, as well as a few extra tests and dollars. Given modern technology, brokerages are no longer reliant exclusively upon expensive television and print campaigns, so operation costs are lower making it more realistic for a typical agent to open up shop. Reliance on the big broker has also seemingly declined as the web has given rise to a certain brand of “groupthink” if you will that leans toward individuality and disruption.

Mix all of these ingredients together and whether it’s good for the industry (or agents for that matter) or not, it is the new reality- the flexible, fast moving, adaptable boutique brokerages.

How big brokers are reacting

I would argue that despite rapid fire growth of boutique brokerages setting up shop across the nation, many big brokers are doing quite will with recruiting and retention. The agent-centric brokerages, despite their size, most closely match the mentality of the modern boutiques, and they offer agents a sense of security that boutique brokerages haven’t mastered yet.

The stale brokerages of the past are losing agents left and right because they can’t wrap their mind around how to motivate agents to produce and stay loyal. It’s not about offering kumbaya retreats or sexy offices, and it isn’t unique to the real estate industry. The human mind takes very little to produce high quality work and loyalty to an employer, and it’s not money or plush high rise offices.

Take ten minutes to watch the incredibly well produced video to see what I mean:

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Can old school brokerages survive this storm?

Traditional brokerages that insist on motivating agents with camaraderie like saying the pledge of allegiance at dressy events or rewarding agents with silver pins, desk trophies and gift certificates will not survive. Traditional brokerages and boutique brokerages that insist on innovating by using the power of their agents’ minds will thrive. Those who value their agents and allow them autonomy, mastery and purpose (as the video above outlines) will not only thrive but will dominate.

There are new brokerages that consider themselves progressive and when you ask them what makes them innovative or how they motivate their agents, and the answers are almost canned and sound exactly like the early days of the big brokers, “better splits,” “better education,” “better profit sharing,” “better technology” and the like are what boutique brokers claim their advantages are, but none of these things empower their agents by giving them (let’s say it all together now) mastery, autonomy or purpose.

Mastery, autonomy and purpose

Which brokerages opt for brainstorming sessions with the entire staff from the receptionist to the broker? Can you name a brokerage that behaves more like an open source society and less like a dog and pony show or a black tie banquet? Is there a brokerage that gives true ownership of the brand to the agents?

At this point, most people have already skimmed this article and will comment something about why they’re loyal to their broker and will miss the point completely (and I’ll act oh so surprised as I comment in return noting that “with all due respect, I think the article should be read in full as the point was missed”). And, at this point, most brokers are not reading, they’re simply formulating their response in comments that will read much like their website’s about page. They’ll say that they’re progressive or superior in every way and that their way of doing things is already motivational and their agents are loyal. I know thousands of agents across the nation and I guarantee you that no agent feels empowered with autonomy, mastery or purpose unless they do it themselves for themselves, but I postulate that the brokerage that finds the balance between these three (as outlined in the video) will be the dominant brokerage for decades to come, despite the model, split or technology preference.

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Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.



  1. Eric Hempler

    June 15, 2010 at 12:47 am

    I thought this was really interesting. I think to some degree I’m doing this by accident. I have a routine I follow Monday – Thursday and Friday I pretty much do what I want. Saturday and Sunday I might also work on something otherwise I go do something unrelated to work.

    I have never gotten anything out of motivational speeches. It’s basically the same thing said over and over. I’m someone that is motivated by how to do something. If I’m taught a system that produces certain results I’ll run with it. However, if I read someone that goes on and on or listen to a speaker going on and on trying to motivate me I just get tired. I need an actual task of some kind that I will do to be motivated.

    As for loyalty…I would say I’m still loyal even if I move on to something, but it’s more along the lines of I have respect for that person or business.

  2. Jeffrey Douglass

    June 15, 2010 at 1:40 am

    Lani, Thank you for the post, I saw this video several weeks ago and skipped it. Tonight after reading your post I took the time to watch it and re-read you post. I think there is a powerful message here about human behavior and why many brokerages are in big trouble.

    Purpose, mastery, and autonomy, what wonderful words!

  3. Joe Loomer

    June 15, 2010 at 6:07 am

    Wow Lani. You’ve outdone yourself on this one. The video is also quite powerful. We did a major community service event on the 13th of May, with well over 70% of our agents participating. I couldn’t put my finger on why the office seemed to leap forward over the last month with new energy – everyone hugging and motivated and SWITCHED ON. It’s as you say – they did something FOR FREE, that had PURPOSE!

    Furthering your argument is NAR studies that show that clients don’t give a toss about your brand – they care about the agent (those who seek Mastery).

    Navy Chief, Navy Pride

  4. Cindy Marchan

    June 15, 2010 at 7:19 am

    It is interesting to see what many have “thought” actually put into words. As it applies to real estate, I think my brokerage does get it, for the most part. The autonomy is probably with most brokerage company’s…it is probably why we are real estate agents. The mastery is definitely with mine, education is at their core. Purpose is also important to them; although improvement is probably needed.
    What I like most about your video is that it explains my husband! He is a programmer and he never cares about the money and now I get it!

  5. Ken Brand

    June 15, 2010 at 8:01 am

    I wonder how many beliefs about human behavior we (I) have completely backwards, as illustrated in this video.

    The thing is, in the wide world of motivations for becoming an agent, there are massive numbers of people who are simply hoping to make a few extra dollars, the approach is sorta like selling those big Pirate Flags and Tiger Rugs on the side of the road on weekends. Big lazy brokers have the perfect system, provide nothing, charge a small fee and everyone’s happy. The market for that is huge and likely to be around for a while.

    Like you’re sharing, and anyone who cares to think about what they see every day, the disconnect/fail springs up when the broker doesn’t offer anything of value and way over charges for it.

    Remember, the average age is 54, there are still 100s of thousands of people who want their private office, plaques, awards, etc. This won’t change dramatically until theres a natural generation sea change. Right now, it’s primarily Baby Boomer tradition. I wonder what the average age of these new independent/boutique brokers is? Or if this small/boutique has nothing to do with physical age, maybe it’s the young at heart & mind + friction free technology?

    Personally, I don’t think it matters if your’re a big broker or a boutique, to me a more accurate label would be does the broker, big or tiny have talent/innovation/leadership/dedication, if you have that, it doesn’t matter if you’re a big broker or a boutique, you’ll attract like minded people and succeed. If you’re lame, doesn’t matter if you’re a boutique or a big broker, you’re gonna struggle and flail.

    In any event, I am constantly reminded that more challenging the environment, the more important it is to reinvent, improve and press forward. And, we have to keep an open mind, most everything we believe is at most only half true, and the other half won’t be true in 6 months.


  6. BawldGuy

    June 15, 2010 at 1:49 pm

    This is insanely rich post material. Lani, you’ve addressed some foundational issues, two of which, paradoxically, are falsely based. Not by you, but by those in the ‘industry’ who wanna make listing/selling homes akin to puttin’ a man on the moon.

    I know there will be more than one sequel to this post — I’m very interested in what more you’ll have to say. My view? Most are lookin’ at ALL these issues from the wrong end of the telescope.

    Maybe your most helpful post of the year so far.

  7. alicefromdallas

    June 15, 2010 at 5:53 pm

    I have been with my company for about 7 years. I’ve been in the business for about 25. I only wish I had started with my company sooner.

    What keeps me here is not the fact that it is a big company (it is). It’s not that we have a big marketshare (we do). It’s because at the heart of my company, at its very core, is a concern about it’s agents as individuals. Now keep in mind that in our area we have approximately 1,557 agents, in about five market centers. I don’t feel like I get lost in a large organization because I chose to get involved and plug in to all that it has to offer.

    I’ve seen the concern about our community, the larger one being Austin, or the smaller one being our agents, who have health issues or other catastrophies and need a little help. That does more to make me proud to be associated with our company than any profit sharing could ever do. Allthough I do profit share and try to share our culture with others.

    Our written volume is up 18% YTD compared to 2009 (almost a Billion dollars – that’s with a “B”). Our closed units are up 25% compared to 2009. Our closed volume is up 26% this year. So, I think we’ve got it figured out how to be successful. Now we just have to share it with others.

    I guess my feeling is that whether you’re in a large company or a small, boutique brokerage, plug in and be proud of where you are–or move on.

  8. Stephanie Crawford

    June 16, 2010 at 2:10 am

    I recently made a switch in brokerages from boutique to boutique. Technology was the driving factor for me. Learning about new technologies is one of the main things that brings me to the blogosphere night after night. I enter each evening hopeful that I will crank up my Google RSS and find some new (cool, free or cheap) solution to help me streamline my business.

  9. Russell Shaw

    June 16, 2010 at 3:54 am

    Genius post, Lani – one of the very best I’ve seen all year. Loved the video!

  10. Brandie Young

    June 16, 2010 at 11:47 am

    Winner, winner chicken dinner! Lani, this post ROCKS!!! The beauty being it translates to any company/industry. Thanks!

  11. Mark Jacobs

    June 16, 2010 at 6:25 pm

    Great post on this one!

  12. Joe

    June 16, 2010 at 11:51 pm

    Old school brokerages are dinosaurs. Simply search ‘kennewick wa homes’ and see who comes up #1 or #2 over brokerages with 200 agents.

  13. Fitchburg real estate

    June 18, 2010 at 2:51 am

    Fabulous article, Lani! And in case anyone thinks only Gen X & Y’ers are going solo these days, guess again. I went solo at age 46 (I’ll be 48 this summer) and several “old-timers” in my market also recently became independent brokers. For me it was clear that, with their expensive overhead and rudimentary understanding of technology, big box brokers (at least in my area) couldn’t begin to offer me a reasonable return on my investment.

  14. Matthew Rathbun

    June 21, 2010 at 2:41 pm

    This is the type of post that got me excited about reading real estate blogs in the first place… I wish we could all do more of this.

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