What is the value of having a recognizable big, company brand in Real Estate today? Some would argue that it means EVERYTHING – that homeowners and home buyers will come to you because of your company brand. Those people would be wrong.
65% of business comes from the Agent’s SOI
According to the NAR (National Association of Realtors), 65% of all Real Estate business comes from agents’ Spheres of Influence – that is, relatives, friends, neighbors, former clients, or acquaintances. I don’t think anyone would argue that this business is procured because of the personal relationship and personal marketing efforts of the individual agent – regardless of the company logo.
But what about the remaining 35% of Real Estate business? Certainly that had to go to big companies with nationally-recognized brands, right? Homeowners must have a higher level of confidence because they recognize the logo and are familiar with the brand. After all, that is what the big brands keep telling us.
The Importance of Local Branding
The fact is that branding is as important as it has ever been in the Real Estate arena. However, LOCAL branding is MUCH more important than national branding. This statement is supported by several studies. For example, in 2017, a segmentation study was done by McKee Wallwork + Company and Decision Analyst on behalf of Leading Real Estate Companies of the World (LeadingRE).
One telling statistic from the surveys performed for the study indicated that homeowners hold a strong preference for working with sales associates affiliated with local independent brands. More than 88% said they preferred working with an agent with a “well-known, local real estate company,” while only 12% preferred those affiliated with a national franchise.
And yet, agents continue to pay significant fees and portions of their commissions for the promise of business generated by the “big brand signage”, while wiser agents willing to brand themselves as local experts work with companies that provide the tools, education and support they need to be successful. And they tend to get what they need for considerably less cost, and maintain higher commissions splits.
Broker/Owners Make the Same Mistakes
Similarly, new brokers who have the dream of owning and growing their own businesses pay needlessly large fees and costs to these large franchises. They end up limiting themselves to the often outdated and unreasonable rules, guidelines and expectations of the franchise. They then find out too late that they would have been better off financially with their own branding, or with the help of a more affordable brand that provided the tools, technology and support they needed for success.
More broker/owners are gaining an understanding that it is much more important for the homeowners in your market to know who YOU are – to be local experts and gain credibility by serving the community – than it is to drop large sums of money into hoping someone calls from a national sign. Homeowners will call on your sign when they know who YOU are – when YOU have the reputation and branding in your markets that capture the attention of your customers.
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