Before we get started today, I’d like to introduce myself and give you a little of my background, as I’m new here at WellcomeMat and my posts have been popping up for the last few weeks. I come to WellcomeMat from the world of education, where I have been a French teacher (along with health, English, and Portuguese from time to time), a coach (of every sport my school offered), and an athletic director. My teaching in the last 20 years has taken me around the country and as far south as Colombia. I throw this out there because I am approaching this position from the angle of a teacher/coach, since that it what I know. My goal is to create content that is informative and educational, and that will hopefully spark a conversation, where we can all share ideas and teach and learn from each other. That said, if you have a particular success that you would like to share, please don’t be shy. Or, if there is something you are curious about but don’t know where to go to find the answers or simply don’t have time, questions are always encouraged. Stop by the Neighborhood to get in on the conversation. That said, let’s dive in to today’s topic.
In today’s blog post, I would like to turn our focus to the brokerage. In their report entitled "What's Driving Brokerage Profitability?", Real Trends identified five main drivers. Of those five, I would like to speak to two today: coaching and training, and technology..
The way we see it, there is no reason that these two elements of a successful brokerage should not be integrated.
Let’s begin by gleaning some information from the aforementioned report. In their study, over ¾ of brokerages (76%) who replied indicated that they have a coaching or training program. Over ⅕ (21%) of brokerages surveyed also expressed interest in integrating their coaching and training strategies into their technology platform. Let’s take a look at some numbers to put some things in perspective, remembering that our interest here is on brokerage profitability.
First, let’s look at the importance of having a training program. In a 2015 report by Adam Conrad from Inman, he quotes Ron Croushore, then the incoming president of the Pennsylvania Association of Realtors, who said, “In five years, 50 percent of the transactions will be completed by an agent who is not currently licensed.” If that is true, then training new agents is critical to brokerage success because a huge percentage of transactions will be MC’d by brand new agents. For independent brokerages (which make up around 80% of brokerages according to the Inman report), this is particularly important, as there is no franchise training program to lean on. In this case, not only are the training materials themselves of utmost important, but so is the method of delivery. More on that in a moment.
Before we get to delivery of training materials, let’s take a look at coaching. In another Inman report from 2014, most surveyed agents saw a return on investment from their coaching program. In fact, more than half of the agents surveyed said their business grew by more than 25%, while 90% said their business grew at least 10% in their first year of coaching.
(Image from Inman report.)
Clearly, agents are hiring coaches to help them increase their business and to make more money, but there are other factors at play. When the agents were asked what they got from their coaches that they didn’t get from their brokerages, the three most popular answers were as follows: 73% said coaches held them accountable; 62% said coaches provided them with needed motivation; and 50% said their coach played an important role as a consultant. These agents see the value in these coaching programs, because they need a little push that they aren’t getting from their brokerage. This is important, because these programs are a significant investment. In fact, 27% of agents surveyed said they spend between $400-$499 a month on coaching services, with only 7% paying less than $300 a month. Some 17% fall into the $1,000-$1,499 range.
(Image from Inman report.)
So, where am I going with this? To answer that, let’s look at that second driver I mentioned earlier: technology platforms. There are many questions surrounding technology platforms in real estate, but there is no question that having a comprehensive platform can help a brokerage drive profits. In the Real Trends article, it is reported that 37% of those brokerages that have adopted a technology platform realize it is an additional source of profit. Further, of the 72% that said their platform includes proprietary offerings, 83% said that those offerings help their brokerage stand out from others and are considered drivers for both agent recruitment and agent adoption of the platform.
The idea is this: we go back to the statistic at the beginning of this article, that 21% of brokerages surveyed in the Real Trends report expressed interest in integrating their training and coaching programs into their existing technology platform. Considering what the agents get out of these programs, and the fact that these agents are spending a good deal of money on these programs, a brokerage that can deliver a high-quality product to its agents can monetize such a program. In fact, 53% of the brokerages surveyed in the Real Trends article reported charging their agents between $25 and $85 per month for coaching and training programs. If you are providing high-quality trainings and education in your programs, agent adoption should be way less of a problem. Also, by integrating these programs into your technology platform, you can see who is engaging in the program. If the program is truly mirroring your brokerage’s philosophy, and this is the place to engage with the materials, you can empower your agents with 24/7 access to the tools they need that will eventually boost your brokerage’s profitability.
This brings us to the essential idea of this post: if you are looking to get more out of your technology program, and integrating your brokerage’s philosophy to that program via training and educational programs, WellcomeMat enables you to create both searchable, private video channels and landing pages that are viewable only to people that have logged into whatever system you use. We also provide analytics on the usage of those pages so you know where you are getting buy-in and where you are not. If you are already using WellcomeMat to distribute video content, this is a next-step that could both engage your agents and potentially drive your brokerage profitability at the same time. If you are not yet a WellcomeMat client, but are ready to maximize your ROI on video via our distribution, video chaptering, and analytics tools, absolutely get in touch with any questions you might have by clicking here.
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