Is too much Agent- Centricity at the heart of the industry dysfunction?

by Marilyn Wilson on October 24, 2013

customer-centricA couple of months ago I wrote a post called the “Challenge for Positive Change” that highlighted many of the relationship dysfunctions we are experiencing in the industry today. We have the honor of working with large brokers as well as MLSs, Associations, technology companies and even title and home warranty providers. We see misperceptions and distrust running rampant between each of these groups. It’s clear that there are many that are feeling as though our industry could be working together much better than it is at the moment.

Fast forward a few weeks and we get to CMLS and the now infamous outline of issues delivered by Craig Cheatham, President and CEO of the Realty Alliance, a highly-respected network for many of North America’s largest full service brokerages and their affiliated business.

Many people in the audience were shocked with Craig’s candor and level of frustration, but I’m not sure why. The types of issues he outlined are the types of issues that have been circling around in MLSs and Associations for a long time. I think the difference is that many groups were simply not listening or taking the conversation as seriously as the tone in which Craig delivered his eloquent presentation of the issues suggests they need to.

The issues he outlines are complicated. Some are quite easy to rectify, but many of the issues are based on local tradition, not on sound business logic that considers today’s consumers and the brokers that serve them.

I have a theory as to why large brokers believe real estate organizations are in conflict with their business goals. I believe that the industry’s extreme focus on satisfying the perceived needs of agents is getting in the way of progress.

When you look at it just about every organization in the industry is agent-centric and not broker-centric. From the National Association of REALTORS® all the way down to a one office brokerage, the needs of agents are considered above all others. Every model depends on agent quantity and not necessarily quality. With that focus comes a lot of dysfunction.

Associations and MLSs are well aware that agents and brokers have different perspectives about the industry and yet, in many cases, agents dominate committees, boards and taskforces. They drive decisions that are best for individual agents, but not necessarily the most appropriate or workable for brokerages. In my article called 5 Ways to end the MLS/Broker Stand-off I outline several specific ways that MLSs can better serve the needs of their brokers.

The best MLSs and Associations have a balance of agent, broker and, dare I say it, consumer perspective in mind when they build programs and policies. They play appropriate roles in facilitating methods for brokers to meet the needs of their clients. The top performing groups also focus on the needs of their members more than their own viability. They sometimes sacrifice “control” for the good of the industry and the brokers that lead it. They don’t fight progress because they believe they might lose their job or cache in the industry.

Technology companies can be guilty of creating dysfunction as well. Instead of leading the way to identifying tools that will help brokers build relationships with consumers by addressing their needs, technology companies sometimes pander to the comfort zone and outdated perspectives of agents. They build products that feel good to agents, but don’t necessarily address the needs of enterprise-level brokerages to create consistent brand messaging and listing distribution control.

Some technology companies are slow to offer ever-evolving features and functionality to help brokers keep up with the aggressive competition from third party sites online. Brokers are thus put at a disadvantage because technology companies are not looking out for their best interest and doing the hard work to keep their websites and marketing tools cutting edge. Just about none of the website providers today conduct regular consumer research to help brokers keep their websites relevant and engaging. This is a really dangerous way to operate a business that is designed to help brokers address the needs of their clients.

We can’t ignore brokers in this conversation either. Many complain about the policies that are put in place by their MLSs, yet some of their own agents may be serving on the committees that are putting forth policies that are in direct conflict with company strategy and approach.

Brokers would love to see more consolidation, for example but sometimes their own agents fight them on it and they allow it. I heard of a case recently where a broker with large market share in an area was fighting to consolidate two small associations upon the retirement of one of the Executive Officers. The broker discussed the opportunity with their agents and was shot down. The agents wanted to hold on to their little local association because it felt good – not because it was good for the brokerage or even the industry, for that matter. The broker stopped fighting them on it – he had more important issues to contend with like securing more listings and closing more properties. He gave up on pushing further consolidation for fear that if he pushed it he would lose an agent or two over it. Agent retention got in the way of positive progress in the industry yet again. Wouldn’t it make more sense for associations to step up and make consolidation happen without creating broker conflict with their own agents?

While I want all of us to take a serious look at the issues Craig outlined, I think we may even need to take a deeper look at one of the fundamental problems. If we continue to focus on agents at the expense of brokers and the buying public we are going to continue to erode our ability to evolve as an industry. The more in-fighting we create the higher chances are that the industry as we know it will go away.

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