New RE/MAX CEO, Amy Lessinger is a sharp leader that looks you in the eye, speaks clearly with acute knowledge, listens carefully, and smiles in the face of adversity. She will emerge as another great leader for RE/MAX.
The challenge ahead for RE/MAX is daunting. If you look at the growth of companies in America today, the franchise model has been losing agent count to the national brokerage model led by Compass, EXP and REAL. Although franchises deliver a tremendous amount of value for a sliver of broker dollars, agents and teams do not seem to care. As my friend Mark McLaughlin has long said, agents vote with their feet – and that is the problem in front of Lessinger: falling agent count. RE/MAX is not alone; other franchises are facing the same adversity.
Combating falling agent count is a challenge facing many brokerages today. Even a growing brokerage keeps their eye steadily on the ball of agent count and production. In truth, brokerages and franchises do not sell real estate, their agents do. They are the foot soldiers of the real estate industry that stand belly-to-belly with the home-buying and selling consumer. They are the family, friend, or neighbor that you trust when you plan to transact. Sure, brands do matter. And I expect that brands will matter more over the next decade. The boutique mom-and-pop shops face an uphill battle to compete in the digital real estate arena that operates with an ever-growing requirement for technical expertise. Agents expect a full house of technology from their broker, and so do consumers.
Agent Retention
Agent retention and the sinewy tissue of trust and loyalty happen at the branch level. The broker or manager you work for needs to be a coach, cheerleader, mentor, and best friend. RE/MAX has a lot of franchise owners that continue to sell real estate, competing with their agents. That stings many agents. It would be better if those broker owners would pass those deals off to their agents.
Agent Recruitment
Keller Williams taught the industry that recruiting is a full-time job at the branch level. eXp and REAL followed their playbook, along with others. Many RE/MAX broker owners are busy running the branch(es) and working their own clients, leaving little time to recruit. This is where the franchise can step in. They can run national campaigns to recruit agents to the brand and set appointments for their franchisees to hire them. HomeSmart and Windermere execute this strategy well.
New Agent Licensing
Many great brokerages like Howard Hanna and Watson own real estate schools. This is a great feeder of new agents. If you train new agents correctly, and help them get started, they can perform very well for your business. I am not aware of any franchise organization that owns a licensing school. Seems like a great opportunity for RE/MAX and others. Every state has different regulations that may impede this tactic, but wherever possible, it’s a great strategy. Otherwise, get the list of new licensees and recruit. Create a startup package for these agents to help them get their feet off the ground. The life insurance and financial planning industry has this practice nailed.
Mergers and Acquisitions
The absolute fastest path to growth is through acquisition (purchase our book on how to create an M&A strategy). If you look at the success of NRT (now Anywhere Advisors), followed by Berkshire Hathaway, Howard Hanna, and Compass – every one of these leading firms by volume were created through M&A. Anywhere has programs for their franchises to help offset the costs of a merger. It has helped companies like Gibson Sotheby’s International Realty and a host of others to merge with other brokers in their area. It helps.
Develop a Home Services Mindset
What RE/MAX has started with Motto Mortgage is wise. If you look at the most profitable brokerage firms across America, they have diversified into home service offerings. Anywhere has also followed this playbook with insurance, title, mortgage, and relocation. The franchises have not unlocked success in these affiliated service offerings to the level that many of the Leading RE firms have. It’s fixable.
Develop a Customer for Life Strategy to Keep Clients Connected to RE/MAX Franchises
Home ownership/management portals are the newest and greatest opportunity for any franchise or brokerage today. If RE/MAX deploys a product like Milestones.ai to every consumer who has ever transacted with the brand, millions of homeowners who have been ghosted by their agents after the transaction will re-engage with the brand. Consumers have portals for banking, investing, healthcare, and education. The landscape is wide open for real estate. Gary Ashton Real Estate Group of RE/MAX Advantage is hot on this strategy already. I am sure that more will follow. Milestones.ai keeps the agent and the firm connected to the consumer between transactions. Today, only 1 in 5 consumers return to their agent for a future trade because their agent ghosts them after the closing. Milestones fixes that. Tom Ferry does a great job of explaining the Milestones strategy, and the folks he coaches get it. Past clients are assets. If you watch the video you will understand. He explains that Customer for Life strategies transform your thinking to past clients as assets under management. It’s impressive.
Over the multiple decades of working with brokerages and franchises, WAV Group Consulting and WAV Group Marketing have helped firms develop and implement successful programs for recruiting the right agents that will create incremental profitability while strengthening the brand’s reputation. We have helped brokers and franchises start from scratch and significantly improve the performance of existing businesses. The suggestions articulated are not new and are likely well-known by every franchise or brokerage today.
The challenge is in the execution.
I expect great things from Lessinger and her management team. They had a CEO at the helm to take them public, another CEO to steady the ship, and now Lessinger will lead the charge on making sure that their entire organization is singularly focused on their dedication to franchise owner success.
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