Who are your clients? Ummm, your clients, dummy!

Whenever I am at an industry conference, I’ll hear a real estate broker make the observation that a broker’s real “client” is the “agent.”  That is, although individual real estate agents have buyers or sellers who are clients, a broker’s clients are actually the agents: the broker provides services to the agents, who then treat the clients, but the broker’s main role is maintaining that client relationship with the agents. The theory is that the broker does not actually have a relationship with the buyers and sellers, but only with the agent.

This is one of those observations that always seems clever when people say it, kind of a counter-intuitive perspective that is presented as a flash of insight.  Except, of course, that it’s become pretty much of  a cliche, given that I hear it at every conference.

More importantly, it’s wrong.  If you’re a real estate broker, your agents are not your clients. Your clients are your clients.  Your agents are your agents.  That’s why we call some of those people “clients” and some of them “agents.”  

And even more importantly, I think that it’s gone from counter-intuitive clever insight all the way through to cliche and now all the way to a pernicious system of real estate brokerage that elevates the agent above the client in the broker’s perspective.

Put it this way: a great real estate broker provides outstanding client service to buyers and sellers.  The main delivery system for those services is through the individual agents, so the broker does have a significant obligation to empower those agents with tools, technology, and training to provide that client service. And, of course, the broker has to provide a reasonable compensation system to incentivize agents to stay with the broker and do lots and lots of deals.  

But you cannot always serve two masters.  Too many brokers, I think, including me, sometimes elevate the agent at the expense of the client. Here’s an easy example: do you provide dedicated parking at your offices to your agents, or your buyers and sellers?  At our offices, where possible, we have dedicated parking spots in front of the entrance for clients. Why? Because we want to make it easy for clients to be able to park at the offices.  That’s a good client service.  But I know lots of brokers who leave those spots open for agents to park in, because the “agent is the client.”

Of course, this is sort of a cross-industry standard, because you can go to most businesses in the country and find dedicated parking for staff or important employees, but not for clients.  And if you go to any mall in the country at 9AM, you’ll find the first ten rows of parking taken up by employees of stores in the mall, who will squat on those choice parking spots all day long.  

But it’s not just simple things like parking spots.  For example, many brokers, including ours, provides for “call coordinating” of sign calls and online inquiries, which go first to the listing agent.  This can be considered a good client service for the seller, who is probably best served if an inquiry is delivered to a listing agent who has a tremendous incentive to try to sell that listing.  It also can be considered good customer (not yet client) service to the potential buyer making the inquiry, since the inquiry is directed to an agent who really knows the property.

But in a lot of cases, this is actually bad customer service for the potential buyer, made in the spirit of the listing agent being the client of the broker.  Although sometimes online inquiries are made about a particular property, at other times the inquiry is spurred by that property, but the customer would be better served by talking to an agent who is sitting in front of a computer and can dedicate as much time as necessary to fielding that call.  Instead, the inquiry goes to a listing agent, who is likely out in the field, with clients, or otherwise distracted and occupied.  It’s a good service to the listing agent, good for the seller, not necessarily good for the person making the call.

This is not to criticize call coordinating, but simply to give an example that treating the agent as a client is not always in the best interests of the buyer or seller who are the actual clients of the company. This one’s a close call, but only if you actually think that people who call into your company deserve the best treatment possible. If you actually think that your agents are your clients, then it’s an easy call.

Finally, while I understand the impulse to treat agents, particularly productive agents that drive the bottom line, as the clients of the broker, I don’t see why service to agents should come at the expense of the client.  The idea that you have to choose between treating your agents/employees as clients, or your buyers/sellers as clients, is a false choice that sends us down the wrong path.  I don’t think you can have a great client service company without providing great tools, training, and technology for your employees (or in real estate, your agents).  

Inded, other industries do just fine in adopting client-centric approaches that actually empower employees and treat employees fairly without adopting a “employees are the client” standard that we hear bandied about in real estate. For example, Zappos is one of the gold standard companies in providing great client service, but Zappos also has a legendarily empowering employee culture. In fact, the great client experience wouldn’t exist without that employee culture.

A great real estate company should be able to recognize that the buyers and sellers are the clients, and provide amazing services to those clients through an empowered, trained, and motivated workforce.

What’s the Best Way to Build Marketshare? Make Your Clients Happy.

I was asked to speak on a panel this week at the RIS Social Media Summit in New York, with several other brokers about how to generate marketshare in a competitive market. It was a great panel, moderated by the peerless Allan Dalton of RIS Media and Top 5 In Real Estate, and I tried to make the argument that the best way to generate greater marketshare is to do something simple: provide a better experience for your clients.

My point was to try to get away from the three traditional methods of building marketshare, all of which were adequately covered by other panelists: (1) build a bigger army by recruiting or acquisition; (2) build a better army through agent development and training; and (3) generate more clients directly through company initiatives and programs.

And it’s not as if my company hasn’t been doing those things.  We’ve had some of the biggest acquisitions in our history in the last year, and a few of the most productive recruiting results (we just recruited one of the top agents in Orange County this week).  Moreover, we’ve run a few really innovative programs to attract clients, including the Home Buyer Tax Credit site we put up in January. As a result, our marketshare has gone up, probably by about 20% across the region.

Nevertheless, though, I think that the strongest way to build marketshare is simply by doing a better job for your clients, which requires a focus on actually improving the client experience and agent competence. I’ve been beating this drum for over a year, in my own company and on this blog, but I’m amazed to the extent that the training industry in real estate simply ignores the fundamental issue of client experience.  Training is all about lead generation, and not what you do when you actually attract a client.

That seems backward to me.  If you do a great job with that client, that client is going to work with you again in the future.  That might not do much in the next few years, since most clients wait 6-7 years between transactions, but in the meantime that client is going to refer you business.  And write about you online. And be a great reference.  All those things will do more to generate new business (and marketshare) than a fancy personal ad campaign or a prospecting plan.

I firmly believe that the best companies in the next ten years are going to emerge because they simply do a better job for their clients.  But I don’t see anyone scampering to take that hill right now.