Real Estate Brokerages have different levers that they can pull to grow their revenue from agent training, to lead-gen platforms, to marketing initiatives. But I would argue that outside of adding ancillary services (mortgage, title, insurance…), any meaningful revenue growth comes down to 2 activities – Recruiting and M&A. There is no doubt that a well run brokerage can help coach agents to grow their business, but the only way to really move the needle is to add new production by bringing on more experienced agents. Recruiting is the lifeblood of the brokerage business. Agents make up the vast majority of any brokerage’s assets, and unlike most industries, their assets walk out the door at the end of each day and there is no guarantee that they will return the next morning. Some companies are focused on recruiting as many agents as possible, while other companies are focused on only recruiting top producers. Regardless of what their recruiting strategy looks like, companies need to make sure that this activity is embedded in their DNA and is a core component of their culture.
One of the most exciting yet challenging roles in my career was leading recruiting efforts for one of the largest residential brokerages in the country. In addition to recruiting into existing offices, my responsibilities included opening up start up offices in new markets where we did not have any presence. The cost to open up an office in a new market is significant, so we would never sign a lease until we had a critical mass of agents that had already committed to join us (it was less about the total number of agents, and more about the aggregate volume of their historical sales). I would typically work 3 to 4 markets at a time where I would camp out and meet with all of the top agents from our competitors. I would spend a lot of time building relationships with these agents, listening to their growth plans, understanding what frustrated them about their company, and convincing them why our company was the best place for them to grow their business. It was a clandestine operation because if the leaders of our competitors found out that I was meeting with their agents, they would quickly circle the wagons and make my job much more difficult.
Once I received a commitment from an agent to join us, I would have them hold off from resigning from their company for the time being. If a small handful of agents resigned too early, the word would get out in the market that we were opening an office and our cover would be blown. I found that the most effective way to maximize our chance for success was to align everyone to join us on the same day. The process took about 3 months per market, and once we had enough commitments to justify an office, we had everyone resign and move their license to us at one time. We would then grab temporary space to house them while we secured a permanent location and built out a world class office. Since we built an office with a team of powerhouse agents, we were usually able to recruit any manager which we felt was the strongest in that market. We would go from a completely unknown brand to the leading company in the market overnight. This strategy was extremely successful and we opened up dozens of offices, many times achieving the status of number 1 market share.
It may sound like an easy process, but the truth is that it was extremely complex and highly emotional for the recruits. Many of the agents that we recruited had been with their companies for many years. They were often leaving a very familiar and comfortable environment and moving to the unknown. They worried about the potential disruption to their business along with the need to learn all new systems and tools. Their excitement was extremely high during the first few days, but it was only natural that some experienced buyer’s remorse as they continuously questioned whether they made the right decision. If they joined our company and then quickly returned to their original company, the results would be devastating for the future of this new office. The transition was just as important as the actual recruiting process.
Mergers and Acquisitions
Another effective form of growth for real estate brokerages is through M&A. Ever since Realogy/NRT started consolidating the brokerage industry in the late 90’s, these types of deals have become commonplace. Although the process of an acquisition is very different from recruiting, the implementation and onboarding of these agents is just as critical. M&A allows brokerages to add many new agents in a single transaction, but there is an added level of complexity. When you recruit an agent, they make the conscious decision to leave where they are and join your company. When you acquire a brokerage, that decision is made for the agents without their knowledge or consent. Agents are usually surprised, confused, and upset when they are called into an early morning meeting to find out that their company has been sold. Had they wanted to leave their company and join a competitor, they would have done so on their own. The smooth implementation and onboarding of these agents is critical, because they are often already highly skeptical. If handled incorrectly, chances are that many of these newly acquired agents will leave as quickly as they joined.
Whether you are recruiting an entire office of agents, a top producer into an existing office, or acquiring a company, you quickly realize how challenging the onboarding process can be. The business of real estate never takes a break, so the new recruits need to continue to move forward with all of their client activities, while learning everything about the new company. Unlike a traditional corporate role where a new hire is given ample time to ramp up, real estate agents are independent contractors whose compensation is 100% commission-based. If they take their foot off the gas while they are onboarding, their compensation will quickly dry up. Therefore, they need to continue with all of their client-facing activities while completing all of their new hire paperwork, setting up all of their devices, creating accounts for all of the new platforms, training, and learning how to navigate throughout the new organization. Even in the best scenario, the process is chaotic. At its worst, agent churn is a given. We were very effective at this process, but I lived in a constant state of fear that we were missing steps and falling short on our promises to these professionals who entrusted us with their careers. We tracked everything with checklists and spreadsheets, and nothing was automated. I remain proud of the growth that our team delivered, but I always felt that there needed to be a better way to accomplish the onboarding tasks. There are no shortcuts to the amount of time needed to spend convincing agents to join your company, but the actual onboarding process is in desperate need of automation.
In the brokerage industry, there is no shortage of vendors selling technology solutions. There is a constant flow of platforms that are getting introduced to the market including CRM, CMA, Virtual Tours, Advertising, Social, Referrals, Lead-Gen, and so on. But I had never come across a product which was geared towards the onboarding process. Recently, a video was shared with me promoting a company named Onboardian. This enterprise-grade offering is a feature rich communication and learning platform that was built around the specific challenges of seamlessly onboarding agents to ensure a smooth transition to a new brokerage. I was really intrigued with what I saw, so I reached out to their team to learn more.
Onboardian is a mobile application for brokerages that has 10 pillars of pre-built functionality to keep agents engaged and connected. Their core functionality is specific to the onboarding process, wherein it provides a customizable task and training pathway automated through a calendar.
The process that agents go through during a typical orientation is an area that needs improvement. Onboardian works by notifying the agent on their phone with a sequenced set of brokerage-specific reminders, tasks, and trainings. When a new agent joins the company they receive daily notifications and prompts of exactly what is expected on a day-by-day, week-by-week, and month-by-month basis. They will know what to complete throughout their entire onboarding journey, which can be for however long the brokerage would like. One Onboardian user takes their new hires through a six month onboarding pathway.
Research from the Brandon Hall Group found that “Companies with a strong onboarding process have a 72% improvement in retention over the first two-years”. The onboarding process has become even more complicated in a post-pandemic world as more brokerages are operating in a virtual capacity. Onboradian makes for an onboarding experience, both in a physical and a virtual environment, that is highly productive and where accountability occurs on both sides.
Onboardian is completely customized to adapt to the nuances of how different brokerages operate. Below is a sample plan meant to describe how it works.
Day 1: The agent receives the brokerage paperwork such as independent contractor agreements, policy manuals, and advertising guidelines (and is given a way to sign them electronically).
Day 2: The agent receives a video message from the CEO, broker, and regional leadership welcoming them.
Day 3: The agent is invited to watch learning modules that are progressive pathways taking them through all aspects of involvement with the brokerage. Progressive pathways are where preceding videos have to be watched along with a task completed to unlock the next video.
Day 4: An invitation is sent to set up an in-person meeting with a trainer.
Day 5: A follow-up note is sent to offer different levels of support along with additional training modules.
The onboarding is self-paced and every element of the agent’s involvement is reportable and actionable by the administrator. Whatever content and development path the brokerage wants to use can be developed and implemented inside of Onboardian.
Onbordian may have been built to help onboard agents, but the platform provides value for the entire tenure of each associate. One example is the company directory. Onboardian has a dynamic address book for everyone in the brokerage that allows an agent to search, message, and call anyone in the company. If an agent has a referral for another market that they don’t service, they can easily identify the best agent in that market, call them from within the App, and follow up with a message that contains all of the details. If an agent is at a listing appointment and needs to access a listing agreement or a presentation, every document is available directly through the App. Perhaps an experienced agent wants to hone their skills for calling on expired listings, access to the entire training library is available at their fingertips.
In addition to supporting agents, Onbordian’s platform is packed with value for the management team as well. From making sure that everyone has the most updated policy and procedure manual, to informing everyone in an office or a region about an upcoming sales meeting, Onboardian makes sure that everyone is always on the same page.
Running a real estate brokerage is incredibly challenging. It is one of the most competitive industries in the world. Margins are already razor thin, and with upward pressure on agent splits and downward pressure on commission percentages, this industry will only get more difficult. When you add in all the well-funded new competitive models such as iBuyers and Power Brokers, brokerage owners have plenty of challenges to keep themselves busy. Recruiting top producers and acquiring competitors is very exciting and should be celebrated events, but the friction in the onboarding process usually leaves everyone feeling scarred. Onboarding needs to become easier than it is, and there is plenty of opportunity to streamline this important process with the right technology.