Sherry Chris shared how brokerages can diversify revenue streams and navigate agent preferences in an increasingly virtual world during an Inman Connect Now session Tuesday.
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Equipping your team members with the best technology means nothing if they don’t use it.
After making sure the team is adopting technology brokers have invested in, it’s a good time to look into diversifying revenue streams.
Those were key messages from Sherry Chris, president and CEO of Realogy Expansion Brands during her discussion on the leading pressure points and opportunities facing brokerages in 2022.
Chris said brokers big and small need to equip their teams with the best possible technology, but also to make sure that it’s being adopted and used by agents.
“The technology piece is important, but even more important is what are your adoption rates looking like?” she asked. “There doesn’t have to be 100 tools, but the tools that agents will use and use effectively.”
Chris spoke with Kendall Bonner, broker/owner of RE/MAX Capital Realty at a virtual Connect Now session on Tuesday.
In addition to stressing the importance of the adoption of technology above all, Chris gave insights into how brokerages of all sizes can pave their way to “extreme growth and profitability,” and the moves they should make to stay nimble in a post-COVID world.
Diversify revenue streams
Now is a good time to invest profits back into your business, Chris said. One way to do it is by investing in ancillary services to diversify revenue streams.
That could include bringing in broker-generated leads, or by providing mortgage and title and even relocation revenue, Chris said. That would insulate brokerages from downturns in the market while also making it more valuable in the long run.
“It creates a more valuable company overall,” she said. “If there becomes a time that you want to sell, your company is valuable because you have diversified your revenue streams.”
That applies to brokers of all sizes who can lean on mortgage and title partnerships or marketing relationships they can create. They’ll first have to make a calculated risk for what she said was a “huge potential upside” to diversification.
“A business that survives solely on gross commission income is a business that has growth opportunity,” she said, “but not the potential for extreme growth and profitability.”
Maintain ‘deep’ relationships
In a world that’s grown increasingly virtual amid a pandemic and the growing power of technology, Chris stressed the importance of maintaining relationships among all parties.
That goes for brokers’ relationships with their agents but also agents with their clients.
“Brokers, make sure that you wrap your arms around your agents, and you know them and you know what some of the personal challenges they may be going through and business challenges,” Chris said.
“To agents, wrap your arms around the end consumer,” she added. “We’re all feeling a little lonely right now, and consumers are also in the same boat.”
Clients can find properties online using any number of tools available to them, but it’s the “deep” relationship between agent and client that will get transactions closed and customers over the finish line.
All-virtual or brick and mortar? Why not both?
On the debate over the need for office space in an increasingly digital world, Chris suggested a third, hybrid approach that fits the company culture brokers want to facilitate.
“You have to look at what the makeup of your company is, what your culture is,” she said. “Not worry about whether you should be closing down offices or opening up large spaces.”
Chris cited examples of brokerages opening up new offices but with shared space rather than overhead dedicated to individual agents.
When opening new space, she suggested getting agents committed first before opening a brick and mortar office.
“You meet with groups of agents and say, ‘There’s a prototype, this is what we’re doing, you’ll be in first, can I get a commitment from you?’” Chris said. “By the time you open the office, you’ve got a core group of let’s say 20, 30, 40 agents that are ready to hit the ground running.”
Email Taylor Anderson