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TECHNOLOGY SPEND
Strategies for evaluating your real estate brokerage platform
Introduction
The mobility and speed of todays real estate
market is due to the advances in technology tools
and products over the last 15 years. Without
paperless transaction systems, lead capturing
websites and mobile apps, items such as fax
machines, up desks and filing cabinets would still
be in hot demand.
Todays brokerage leaders clearly understand
the need for technology systems. What that
technology should cost or how to measure
its success is what many brokerages dont
understand. Read on to find out what systems
brokerages need to invest in and what those
systems should cost. Dont miss out on learning
how to make the most of new tools and products
before and after theyve launched.
KEY TAKEAWAYS
BROKERAGE PROFILE
Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Key Takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Brokerage Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Technology Spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Northeast
Systems to Invest In . . . . . . . . . . . . . . . . . . . . . . . . . . 4
West
Midwest
Southeast
West
27%
Southeast
23%
Midwest
33%
Northeast
17%
27%
23%
20%
17%
13%
3
Less
than 50
51 to
100
101 to
250
251 to
450
More
than 450
TECHNOLOGY SPEND
Systems to Invest In
Brokerage decision-makers are approached with a new or
improved version of a technology tool almost every day. The
hard part for many brokerage leaders is not in identifying
the available tools, but in deciding which products will
bring the most value to their business.
When REAL Trends surveyed brokerages across the country,
they identified company websites, CRMs, back-office
accounting, email platforms and transaction management
systems as most important business technology tools.
Back-office accounting or email platforms arent the most
glamorous tools; however, they, like others on the list, have
a defined purpose that supports the infrastructure of the
brokerage. Company websites ranked as the most important
tool among those surveyed. For in-depth insights on website
feature must-haves, review the current REAL Trends Website
Rankings.
1
5
Company
Website
Transaction
Management/
Storage
CRM/Database
Management
Most Important
Technology
Tools for
Brokerages
Email Platform
(i.e. Google for
Business, Microsoft
Exchange Server)
Back-office
Accounting
The good news about the top five systems listed is that many of
these services are offered by a variety of technology companies
in a bundled format. On average, brokerages tend to partner
with four to ten service providers when it comes to their
technology services.
TIP:
WHEN DETERMINING WHERE TO
INVEST YOUR TECHNOLOGY BUDGET,
10%
40%
40%
10%
Less than 3
4 to 6
7 to 10
11 to 15
Other 3%
Technology
11%
Phone &
Internet 6%
Personnel
Costs
35%
Office
Supplies 5%
Marketing
Advertising
11%
TIP:
IF YOURE UNSURE OF WHAT YOUR BUDGET FOR TECHNOLOGY
SHOULD BE, work backward. The firms surveyed compared their
annual technology costs to their annual gross margin. Gross margin
is the revenue that a brokerage firm has after referral fees, franchise
fees, and sales associates commissions are paid. In most cases, the
amount spent on technology services was equal to 5 percent of their
gross margin. This number fluctuated minimally from three to eight
percent and is a useful benchmark for where your technology
TIP:
CRM/Database
Management
Design-toPrint Services
Email
Marketing
Agent
Website
Lead
Generation
TIP:
DONT DISCOUNT THE IMPORTANCE OF FORMALLY
SURVEYING YOUR SALES ASSOCIATES. Find the survey method
that fits your brokerage, brand and agent base. It could be an
annual survey to the entire company or a short quarterly poll that
you post to your companys private Facebook group. Whatever you
do, dont miss out on feedback from your sales associates. Their
insights may save you from a technology investment nightmare.
100%
100%
88%
Announce in an email or
email campaign
75%
63%
Showcase product/
service at a company event
63%
50%
Increasingly brokerages are using internal focus groups and multiphase rollouts to increase the odds of a successful launch and
long-term adoption of a technology tool. One brokerage surveyed
vets its new technology through three different groups (leadership,
assistants, and select sales associates) before introducing it to the
entire office.
A rollout strategy is not complete without considering timing.
Less than 20 percent of brokerages consistently introduce new
technology during their markets slow season. For most brokerages,
this falls anywhere from October to February. Instead, a majority
of brokerages launch a product or service as soon as it is ready to
launch. When possible, integrate new technologies, especially ones
that will have a dramatic impact, during the slow season.
TIP:
AVOID AN UPHILL BATTLE WITH TECHNOLOGY ADOPTION
by first vetting products through multiple groups. You
can start with staff to test new products, but dont forget
to include some of your sales force. The more detailedoriented people, the better, because they can help you find
inefficiencies quicker. Nothing is worse than presenting a
bugged system. An agents first impression of a new system
is hard to shakegood or bad.
Design-to-Print
Services
Intranet
Lead
Routing
Mobile
App
Lead
Generation
Online Reputation
Management
7%
TIP:
BEFORE JUMPING INTO USING A TECHNOLOGY PRODUCT, stop
and evaluate the long-term goal for your brokerage and your sales
associates. To avoid the shiny object trap, know what systems
fit your business model and culture. For example, if your sales
associates rely heavily on their responsive websites, it may not be
worth investing in a mobile app platform on their behalf.
Also, dont forget the amount of time it will take to launch a new
product. Is this something that you can roll out in three months or
will it take 12 months? Can you roll out this product during the slow
season? Will this product or service have enough value for sales
associates so that they will allow it to disrupt their business? These
are just some of the questions to consider before signing the contract.
CONCLUSION
The way technology products and tools aid in the speed and
efficiency of the home buying and selling process is invaluable.
As those services continue to evolve, brokerages should not
underestimate the importance of planningnot just for the tools
themselves, but for their integration into the brokerages workflow.
Because not every product, tool or partner is a good fit for every
firm, brokerage leaders must rely on what they know. They know
the culture and work style of the people in their company, the best
way and time to introduce tools to their staff and sales force, and
the tools they need to bring efficiency or create opportunity for their
sales associates.
Backed by a solid knowledge of who they are, what they need
and a better understanding of how much to invest in technology,
brokerages may proactively approach changes to technology
systems.
11
Methodology
From May to June 2016, REAL Trends surveyed and interviewed
30 broker-owners or technology directors of real estate firms
across the country. Participating brokerage firms varied from under
50 sales associates to over 400 sales associates. Brokerages
participated from both franchise and independent firms.
12