The Big Lie
The BIG LIE is a falsehood that real estate brokers tell their agents and consumers.
This lie is so pervasive and so long-standing that many real estate agents have accepted it as truth and continue to spread the lie themselves. The vast majority of agents that spread this lie do not even know that it is a lie. They just trust the source.
Some agents know better. Most of the agents that know better are top producers. They figured out the truth about the big lie in the real world. That fact should tell you a lot.
What is even more disturbing is that the one national brand that acknowledges the big lie in a couple marketing documents still perpetuates the big lie in their actions. Their signage demotes the agent and promotes their brand. This is duplicitous.
There is significant evidence to back up the assertion that the real estate brokerage brand matters to the consumer in their hiring decision is in fact a lie. The facts are that the brokerage company’s brand is actually not a factor that consumers take into consideration when selecting a real estate agent. The reason resides in how their minds process brands to begin with and how that relates to the residential real estate brokerage industry.
The National Association of REALTORS Profile of Home Buyers and Sellers, (a research study done every year and the numbers are similar year to year), revealed that only 4 percent of the time did buyers choose their real estate agent by a specific real estate company or brand. But big box brokerage firms keep pouring millions into national television ads including the new Berkshire Company (the old Prudential). These companies claim that advertising their brand all over the place will sway the consumer when it comes to hiring an agent.
NAR’s research directly contradicts these claims.
“If you look at the reasons that ARE considered the ‘most important’ when choosing a REALTOR®, 97 percent have absolutely NOTHING to do with brand or company. They are ALL ‘individual agent characteristic’ in nature.” Michael McClure, President and CEO of Professional One Real Estate and Professional One Franchising, LLC
Any real estate agent worth their salt knows that the money is in the listings. So what about home sellers? So maybe the big box advertisements and claims are really just targeting sellers so they list with their agents. Hmm. Let’s take a look at the data.
In these same surveys, the Profile of Home Buyers and Sellers surveys done by the National Association of REALTORS, only 3 percent of sellers cited an agent’s affiliation with a particular firm as the important factor when choosing their agent.
Hence the big lie.
So what accounts for the other 97%? Obviously the agent him-herself.
Sometimes these surveys reveal 4-5% but the point remains the same. Hundreds of millions of dollars are spent every year to perpetuate this lie even though the companies that are spending the money know it’s a lie. Why would they do a crazy thing like that?
To recruit more agents.
They pitch agents that “brand” matters hoping that the agent will want to work for a great “brand” and that their great “brand” will help the agent get business. We now know this is false.
What is ironic about this big lie is that a significant portion of the agent’s commissions goes to pay for all these expensive ads that have the effect of recruiting more agents, who are in fact more competition for the agent. Funny, huh? This is what we call a vicious circle.
Think about this for a moment. Your commissions are being used to increase your competition in your local market place. So now we know the truth, which is that it is the agent’s personal brand that matters. Once you see through the big lie, what should you, the individual agent do about it?
In the bestselling book entitled “The World Is Flat”, author Thomas L. Friedman’s analyzes globalization, which leads to a view of the world as much more of a level playing field in terms of commerce, where all competitors have an equal opportunity. This is largely due to the Internet. This phenomenon applies directly to real estate sales where a local agent can create a presence in a number of ways that have an impact on generating business. The individual can win, even against a global conglomerate. The reason is real estate is hyper local.
The truth is obvious. The business of selling homes is dominantly a people business done locally. Consumers don’t hire Coldwell Banker, RE/MAX, or Keller Williams. While technically they contract with a local brokerage company, the consumer never meets national representatives of these firms. They rarely even meet the officers of the local real estate company. In their minds they hire the individual agent.
They make their hiring decision in a very personal way while we are lead to believe otherwise in the propaganda. The way that consumers actually behave in the real world is often very interesting and enlightening. An example is that they usually think categories first and then brands.
Categories first, then brands
“Honey, I know your buddies are coming over for the game tonight, what do you want to do about dinner?”
“Uh, how about pizza?”
“Great idea, I don’t feel like cooking anyway. Do you want order from Toppers or Pizza Hut”?
Sounds like a conversation in any home across the USA, does it not? So what happened in this example as it relates to brands? If you think about it for a moment, I think you will find yourself processing information like this all the time.
Consumers think categories first and then brands. First pizza; then Toppers or Pizza Hut. It breaks down as follows:
- We need dinner.
- What category of food do we feel like having? Pizza
- Ok pizza. Which brand?
It is also important to know that consumers notoriously have very limited mindshare for brand choices, usually just a few per category, in some cases just one or two.
Consider this conversation:
“Honey, I know your buddies are coming over for the game tonight, what do you want to do about dinner?”
“Uh, how about pizza?”
“Great idea, I don’t feel like cooking anyway. Do you want frozen pizza, which in that case we can buy Tony’s, Tombstone, Amy’s Cheese Pizza, Red Baron, Totinas, Costco, Trader Joe Giottos, California Pizza Kitchen, Newman’s Own, Freschetta, or DiGiorno? In the case of delivery, do you want Toppers, Pizza Hut, Dominoes, Papa John, Little Caesar, Round Table, Rosatis, Ameci, Big Al, Roma…
Honey oh my god, you’re killing me. Just order from Toppers.
Seems a bit ridiculous right? People are not data regurgitation machines. You want a pizza? Yes maybe you have tried many but you automatically filter the list down in your memory to your favorites most of the time and go with it. Done, decision made, and lets get back to the game.
How this does relate to real estate, a much more important decision making scenario than what to eat tonight? Even though the decision as to which real estate agent to hire to list, market and sell their home, consumers handle the decision in a very similar way.
Let’s visit our couple once more.
“OK, I’m ready, let’s downsize. With the kids gone, we don’t need this size house anymore. Let’s finally put the house on the market.”
“So do you want me to set up a meeting with the real estate agent?”
“Yeah let’s do it. What about, what was her name, Jill Wade? … Or that other guy, Rob something, Fletcher I think? I want to talk to both of them.
The category is real estate agent. The brand is Jill or Rob. Consumers think of the agent as a person, not as a national brand. Yes, they may know who Jill or Rob were affiliated with in the past, but having us believe (in national ads and other nonsense) that consumers think “Forget Jill and Rob, that new commercial on TV with the balloon was amazing, let’s hire that company” is as disingenuous as it is nonsensical, just as it would be for a home owner to say something like “call that company with the multi-level recruiting program”.
While national branding is very important in many areas of consumer behavior, hiring a real estate agent is just not one of them and year after year the data supports this assertion. We also know that consumers usually only have room in their minds for one or two real estate agents so if you are not one of them; you are not getting the call.
In summary, the agent is the real brand and that brand must be “top of mind” with consumers to get the business. Mind share is key and the takeaway is that to be a successful agent, you need to know how to brand yourself and how to market your personal brand.
It is because of these realities that our company will continue its efforts to support agent-branding success via our economic model and our “Powered by THRIVE” initiative. With us, you can actually have “Powered by THRIVE” on your business card that show cases your brand such as The Jill Wade Group or the Jill Wade Team or a tag line such as Jill Wade Sells Westlake.
There is more evidence to support the assertions in this whitepaper. This further proof should further clarify how you might want to consider strategizing your branding, marketing plans and brokerage affiliation. Think about the top producers that you know.
Maybe there is a super star in your office. Maybe you read about one of them. Maybe you saw one of them on a reality show our just heard about them through the grapevine. Does a name come to mind? If so, pause for a moment and think about how you processed this. Was it their name that was prominent in your thoughts? Maybe you know which brokerage firm they were with or maybe not. Even if you did know, some of them may have switched firms. It happens with no impact on their success or personal branding. Why? They know about the big lie.
Here is what can be printed on your business card with our firm: “Jill Wade” in big bold letters. In the lower right it can say “Powered by THRIVE”. The broker’s name speaks directly to reality. The brokerage firm supports your brand. We are your support system. You are the brand. We power you, not the other way around. You are the star; we are in the background where we should be. Does that make sense?
If you are brand new in the business, there is nothing wrong with having your business card have a THRIVE California or California Estates logo on it. You may not have created much of a brand yet. If that is your situation, you should at least start thinking about what your brand is and what it means. We can coach you to start that process. It’s creative and its fun. Think about what your value proposition is and what makes you different. More on this topic later.
The purveyors of the big lie perpetuate it by keeping a significant percentage of your hard earned commissions year after year, and or by charging you high monthly fees and or by nickel and diming you to death including Keller Williams, RE/MAX, Berkshire Hathaway, Sotheby’s, Coldwell Banker, Century 21 and the list goes on and on. These are all fine companies run by good people but you should make important decisions with the blinders off.
Our approach to solving the big lie problem cannot reside in just creating a BRE sanctioned name like Powered by THRIVE. No, that idea would just be fluff; more broker hyperbole unless we backed it up economically.
Agents can create and market their own brand in powerful ways now through blogs, a video channel, photo sharing, social and other networking strategies and much more. We train agents how to build their brand, not ours. THRIVE’s 100% commission plan now provides agents with the money they need to build their brand.
Our solution is three-fold.
- Tell the truth about branding to our agents
- Train and coach agents how to generate more business (12 week course and personal coaching and mentoring)
- Back up brand building with action.
What I mean by action is money. Even if the difference between our commission plan and the plans of major brokerage companies only amounted to $25,000 a year in your bottom-line, and in some cases it is much more, over a 20 year real estate career, it can add up to over $1,300,000. Yes, you did read that number correctly, one million three hundred thousand dollars out of your pocket. We can send you the spreadsheet or you see online it at Join.Thrive.US.
100% Commission Structure
You need money to build your brand so we are a 100% commission plan company with transaction fees at each closing starting at just $375. Our agents keep more of their commission instead of financing ad campaigns for brokers (or giving away commissions to other agents in the form multi-level marketing).
The truth is simple. It was staring back at you every time you looked in the mirror. You are the star of the show. Our job is to empower you and help you build your brand.
Thanks for reading. All the best.
Founder of THRIVE California, California Estates and Powered by THRIVE
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