{"id":3101,"date":"2022-05-06T19:13:13","date_gmt":"2022-05-06T19:13:13","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2022\/05\/06\/brokers-diversify-your-revenue-sources-for-the-win\/"},"modified":"2025-03-13T02:42:00","modified_gmt":"2025-03-13T02:42:00","slug":"brokers-diversify-your-revenue-sources-for-the-win","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2022\/05\/06\/brokers-diversify-your-revenue-sources-for-the-win\/","title":{"rendered":"Opinion: Brokers must diversify revenue sources for the win"},"content":{"rendered":"\n

Many real estate brokers have relocation divisions. In the past, those divisions primarily handled corporate relocation activity and agent-to-agent referrals. The challenge with some of those entities is they often become comfortably reliant on a few very large sources of business.<\/p>\n\n\n\n

Some have wisely branched out into handling internet leads and created their own local affinity or corporate relocation<\/a> programs. They don\u2019t even call themselves relocation any longer. A more appropriate title is client services, corporate services or client engagement. Whatever you call it, the name should be ambiguous enough to morph into serving a variety of needs.<\/p>\n\n\n\n

Diversify your model<\/strong><\/h4>\n\n\n\n

Several years ago, Cartus Mobility<\/strong> allowed their business to become dominated by a huge account, the affinity program USAA Movers Advantage<\/strong>. When that program abruptly halted, it left Cartus<\/a> \u2014 and many of their network brokers that allowed that business to dominate their own business \u2014 reeling. That single source of business amounted to almost 50% of some brokerage’s business \u2014 not their relocation business, all of their business.<\/p>\n\n\n\n

If that isn\u2019t a painful lesson in over-reliance, I don\u2019t know what is. When focusing on company- generated business, a broker and their person in charge of those business lines must ensure they are regularly measuring each source of business and how much they contribute to the overall bottom line of the department and the company.<\/p>\n\n\n\n

Even depending on one specific network for all of your broker-to-broker business is risky. Some markets have one corporation that does a significant about of hiring and, without paying attention, can easily become a huge dominant source of business. All it takes is a staff change within that source or an ownership change or market adjustment, to bring it all crashing down. It\u2019s just as risky as depending on one high-producing agent or team to carry an entire real estate company. Unless you are that agent, you are at the mercy of others. Enjoy it, but don\u2019t rely on it.<\/p>\n\n\n\n

Never stop delivering<\/strong><\/h4>\n\n\n\n

The more varied sources of business the better, even though it takes work. It all comes down to marketing. We can sit back and let the business come in and evolve in such a way that a few sources are delivering the bulk of business, or we can hire a staff that likes the challenge of varied sources of business and knows how to constantly go after it.<\/p>\n\n\n\n

It means building relationships with brokers who fall outside of your network or brand. It takes exploring sources that are easily managed at an enterprise level, like internet leads or even REO listings. While REO isn\u2019t a thing now, sadly it will be at some point.<\/p>\n\n\n\n

It may mean looking at concierge-type programs, utility hook up, paid rental assistance, property management and moving services programs that can generate revenue in a different way through fees that are not tied to a transaction or typical services like title, escrow and mortgage.<\/p>\n\n\n\n

Why end to end is so critical<\/strong><\/h4>\n\n\n\n

Real estate brokers have finally started to realize that it is smart business to offer and own end-to-end services that include all of the ancillary services that kick into gear when someone wants to buy, sell or rent real estate. <\/p>\n\n\n\n

They not only connect with the client for a longer period of time, they can financially benefit from it as long as all of these entities understand the pressure it puts on each leg of this journey. As transaction margins continue to shrink, they can build clients to extend the life cycle of engagement.<\/p>\n\n\n\n

It\u2019s not just about the transaction, it’s about all of the moving parts that surround the actual transaction. People want easy, but they aren\u2019t dumb. Just because their agent recommends a service doesn\u2019t mean they aren\u2019t going to look at consumer reviews<\/a> and check pricing. <\/p>\n\n\n\n

If the services pass the price and service test, then why wouldn\u2019t they use your recommended services, particularly if you can legally offer any discounts along the way? The key is to bake in these services as part of the initial dialog with the prospect. If the agent believes in the services, and the client believes in and trusts the agent, then it should be a slam dunk.<\/p>\n\n\n\n

How can you ensure client engagement?<\/strong><\/h4>\n\n\n\n

Agents have historically resisted using broker-recommended services. I have seen first-hand how hard it is to get an agent to recommend a mortgage partner that is attached to their company. There are various reasons why, but it often comes down to that they don\u2019t want to be blamed if something goes wrong. Or, they would rather work with their friend who will drop everything if something goes wrong. Legally, there’s only so much that can be done to encourage agent\u2019s support, so it comes down to relationships and trust.<\/p>\n\n\n\n

If brokerages are going to achieve actual end-to-end service delivery, does that mean the agent is the one who is supposed to manage it? Only so much can be automated, and if the agent isn\u2019t financially benefiting from it, don\u2019t expect it to happen.<\/p>\n\n\n\n

It makes more sense to have the agent manage the transaction and have a client engagement person who works in concert with the agent to ensure the programs are delivered and explained to the customer\u2019s satisfaction. I\u2019m not talking about a branch manager, I am talking about a customer service representative who is assigned to each client to follow them through all stages of the experience, similar to what a relocation division might do with a relocating transferee. Those client engagement people could easily fall under what was formerly known as the relocation division.<\/p>\n\n\n\n

The answer may be right before you<\/strong><\/h4>\n\n\n\n

As someone who managed a large client services division for years, I know that the people who work within them can be flexible if you hire correctly. They can shift from a robust seller\u2019s market to a crushing REO environment controlled by buyers. They are accustomed to problem resolution and managing a lot of moving parts from a variety of sources. Not every relocation department is equipped to handle this type of role, it all comes down to the leader and their appetite for growth.<\/p>\n\n\n\n

If brokers truly want to provide end-to-end services for their local customers to avoid over-reliance on a few sources of revenue, they need to look to their relocation divisions to provide the skill sets to help manage and deliver those services. By having a paid guide to work in concert with the agent and their client, to explain the value of the available services, program usage should take off.<\/p>\n\n\n\n

Teresa Howe, SCRP, SGMS, is a consultant with TRH Consulting, and has created and managed multiple referral companies for brokerages.<\/em><\/p>\n\n\n\n

This column does not necessarily reflect the opinion of RealTrends\u2019 editorial department and its owners.<\/em><\/p>\n\n\n\n

To contact the author of this story:
Teresa Howe at teresa@teresahowe.com<\/a><\/p>\n\n\n\n

To contact the editor responsible for this story:
Tracey Velt at tracey@hwmedia.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Are you thinking beyond title, mortgage and insurance? It’s time to diversity your revenue sources into client services that include relocation, internet leads and more.<\/p>\n","protected":false},"author":15802,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[794],"class_list":["post-3101","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"\nOpinion: Brokers must diversify revenue sources for the win - RealTrends - Blog<\/title>\n<meta name=\"description\" content=\"Are you thinking beyond title, mortgage and insurance? 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