Surviving the Sea Change
Posted by David Bennett Wed, 28 Jun 2006 12:18:00 GMT
Leading brokers, industry consultants focus on “back to basics”—growth, leads, technology and the human touch—as keys to future success during first annual RISMedia Midyear Power Broker Forum
By Beth McGuire
There are three areas brokers must focus on if they are to continue to thrive in the years ahead: horizontal growth, vertical integration and technological enablement. That’s according to some the nation’s brightest and most successful real estate brokers and consultants who gathered in Washington D.C. yesterday to discuss such strategies at RISMedia’s first annual Midyear Power Broker Forum.
The forum titled, “How to Make Things Work: Grow, Integrate, Enable,” and held in conjunction with the National Association of Realtors Midyear Legislative Sessions, was attended by more than 220 real estate professionals and brought together leading brokers Mark Stark of Las Vegas area Prudential Americana Group, Realtors; Authur Sterbcow of New Orleans-based Latter & Blum Realtors; and Shel Detrick of Oklahoma-based Prudential Detrick/Alliance/SW/Classic Realty. Industry consultants Richard Sommer of HomeGain; Joe Kazzoun of Clareity Consulting; Jim Sherry of Innovative Solutions and Chuck Del Grande of Presidio Merchant Partners also joined the panel.
“Right now we’re at the end of the old market and the beginning of the next market,” said Ed Krafchow, of the huge firm Prudential California/Nevada/Texas, who co-moderated the event with RISMedia Publisher and CEO, John Featherston. “There is a systematic change happening in our industry and in order to make things work, we need to get focused on our business and know what it requires now to be profitable in the future.”
Consultants agreed that a combination of the three, key must-haves are needed to ensure profitability: horizontal growth, or growth in new markets or by acquisition; vertical integration, or expanding revenue streams by bolstering ancillary services such as mortgage, title, insurance and escrow; and technological enablement—how in a sea of technology options with only more on the way, to choose the right products for your business, gel both growth initiatives and position your company for optimal future growth.
It was noted, however, that these strategies are for naught if you are not using them with the ultimate goal of creating value 
in the consumers mind and providing them with good, old-fashioned face-to-face service.
“I am different today than I was on August 27,” said Arthur Sterbcow, the broker from New Orleans and the Gulf Coast who lost 24 of his 28 offices in Hurricane Katrina. “We had more technology than we knew what to do with. But if there is one thing that demonstrated the future of this business from that disaster is that people are the fundamental core of this business. Technology kept us afloat, but it’s worthless without the agent who touches people’s lives. That trust surpasses everything.”
Sherry explored the subject further, putting the onus on brokers to relieve the pressure of completing the mundane daily tasks that take away from what should be their singular job of client interaction and listing and selling. He referred to the concept as “non-traditional horizontal growth.”
“We are an industry willing to suffer a slow death of sameness rather than risk change,” Sherry said. “I want this industry to gather enough chutzpa to offer a model that the consumer wants, not what we want to feed them.”
He added that absorbing the client tasks should be an important priority for brokers.
Preparation for future change such as preservation of the MLS system, new business models and evolution of lead generation companies were also discussed.
Responding to the question, “What do brokers need to do about lead generation issues,” Richard Sommer said, “We should do what the consumers want. Consumers want information, they want their property marketed and they want to complete the transaction. We’re going to see some major changes in the next few years, and we have to provide agents with all the tools they need to succeed and part of that is offering multiple forms of services.”
He added that building business though partnerships with lead generation companies is one way to do that and that brokers he sees as leading the charge on the lead generation front are those who are experimenting with several different business models, not just one singular approach. “Brokers are learning,” he says. “They are trying to figure out their core competencies and what value they bring to the consumer; they’re looking at several models—HomeGain, HouseValues, Google—they see the trend that consumers are going to multiple sites for housing information, not just one source, and they are responding to that.”
What keeps brokers up at night?
For leading Oklahoma broker Shel Detrick, it’s agent retention. “We go for quality, not quantity when it comes to agents,” he said, adding that training and reinventing his agents are high priority—no part-timers allowed.
“Being as flexible as possible,” answered Mark Stark, the Las Vegas broker to the same question. “It’s important not to get stuck on one idea just because it’s yours. You have to make sure you look at all the facts and then move forward with the right strategy.”
Brokers also saw the concept of a commercial-based listing service as a potential big threat to the industry while consultants reiterated that like other new challenges that have threatened industry structure in the past, the idea of consumers having full access to listing information at will poses another new set of opportunities.
