{"id":1965,"date":"2018-06-04T15:29:00","date_gmt":"2018-06-04T15:29:00","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2018\/06\/04\/gathering-of-eagles-2018-recap\/"},"modified":"2025-03-13T02:35:06","modified_gmt":"2025-03-13T02:35:06","slug":"gathering-of-eagles-2018-recap","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2018\/06\/04\/gathering-of-eagles-2018-recap\/","title":{"rendered":"REAL Trends Gathering of Eagles 2018: Recruit, Develop & Spend Less\u00a0"},"content":{"rendered":"
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At REAL Trends Gathering of Eagles,<\/a> brokers, CEOs and leaders sat down together to mull over the potential challenges the industry faces and how CEOs of the biggest companies in real\u202festate are facing them head-on.\u202f <\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Know Your Story <\/strong> <\/span><\/p>\n

John Peyton<\/a>, President and CEO of Realogy Franchise Group<\/a>, comes from the hotel industry, where you can control the brand and story with scripts, training, uniforms, etc. Not so much in real estate. And when it comes to working with franchisees and their agents, he says,\u202f\u201cFocus on two or three, story components that agents can grab onto instead of handing them a giant company manual of values.\u201d <\/strong><\/em><\/p>\n

Peyton<\/a> also described a recruiting campaign they launched to their franchisees, but only about 100 out of the 1,000 that registered for the campaign actually yielded some recruits. They tried to figure out what was happening and learned that over half of\u202ffranchisees they talked to couldn\u2019t effectively describe their value proposition to agents. Realogy Franchise wants to help their affiliates recruit, \u201cBecause big is better in this space.\u201d<\/strong> <\/em>While the classic value proposition involves marketing and branding, Peyton describes today\u2019s value proposition to focus more on tools, data, technology, and analytics.\u202f <\/span><\/p>\n

Building A Recommendation Engine<\/strong> <\/span><\/p>\n

Big data is something Peyton admits Realogy hasn\u2019t mastered yet, and he sees it as a challenge for the industry as a whole. \u201cThe data hype came about ten years before we really knew how to harvest it.\u201d Now, they\u2019re looking to predictive analytics and machine learning to provide the kind of \u201cRecommended for You\u201d service that is bringing so much success to Amazon and Netflix. Right now, 30 percent of Amazon\u2019s revenue is generated by its recommendation engine, and more than 70 percent of the shows people watch on Netflix is the result of their recommendation algorithm. Peyton hopes to apply this technology to help predict which homeowners are likely to sell, where likely buyers for a property will be located, and even when agents are likely to switch brokerages. <\/span><\/p>\n

Only a 15-minute break separated Peyton\u2019s warm and fuzzy outlook with Rob Hahn\u2019s<\/a> apocalyptic prediction for the future.\u202f\u201dThe truth is you\u2019re all dying on your deathbeds,\u201d said Hahn. <\/span><\/p>\n

He then asked three questions to the room full of brokers: \u201cAre commission splits getting lower or higher? Are brokers getting easier or harder? Is it getting easier or more difficult to manage your agents?\u201d He says,\u202f\u201cHigher, Harder, Worse.\u201d <\/strong><\/em><\/p>\n

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Pimpin\u2019 Ain\u2019t Easy<\/strong> <\/span><\/p>\n

Hahn<\/a> goes on to explain that the traditional real estate broker is no longer in the real estate industry. Instead, they\u2019re in the recruitment industry. \u201cAnd why is it so difficult to recruit? Because there\u2019s little differentiation between brands,\u201d<\/strong><\/em> said Hahn. There\u202fare three main offerings from a brokerage to an agent: technology, leads, and training. Does the brokerage do this better than any other vendors and service providers that specialize in technology, leads or training? Which of the three things can agents\u202fpurchase themselves, independent of the brokerage? All of them. \u201cWhat is it that brokerages do?\u201d asked Hahn. \u201cYou recruit talent, you retain talent, and you take a piece of the action. A business model shared with only one other industry in North America: a pimp. Except pimps keep more of the money.\u201d\u202f <\/span><\/p>\n

Hahn\u2019s suggested solution to this doomsday:\u202f<\/strong>For brokerages to operate like a professional services firm\u2014think law firm\u2014where you eliminate the independent contractor, make your top producers equitable partners and everyone else is an employee associate.\u202f <\/span><\/p>\n

Answering the Diversity Question<\/strong> <\/span><\/p>\n

Steve Murray asked a very important question: \u201c\u2019Is hiring minorities in leadership a top priority?\u201d ERA CEO Simon Chen<\/a>; RE\/MAX CEO Adam Contos<\/a> and Coldwell Banker CEO Charlie Young all said yes. But unfortunately, they each struggled to elaborate. Their answers went a little something like this, \u201cOur CFO is a woman\u201d and \u201cWell, I\u2019m a minority, so, there\u2019s that\u201d and \u201cWe definitely foster diversity.\u201d \u202fThis question could have been a nice opportunity for them to talk about their diversity initiatives and inspire leaders in the room to develop similar programs.  <\/span><\/p>\n

In\u202fhis closing remarks, Steve Murray said it takes three things to be a successful brokerage<\/a>: <\/span><\/p>\n