Over the past few years, we've learned a lot about building profitable brokerages and adding revenue streams.
The real estate industry is changing fast, and I mean really fast. Every day there's a new company vying to remove Realtors from transactions with fancy new technology … and they're failing miserably.
Agents are doing more transactions than ever actually.
It turns out that the people do value another human being who knows more about navigating the real estate transaction process than they do.
Now the one thing that these companies have succeeded in doing is monetizing off of the backs of Realtors & Brokers in any way they can.
What has happened is that Realtors are spending more money than ever to run their business. In the end this leads to Brokerages being squeezed and are the ones making less money and having to find ways to monetize to provide more value to their agents.
Revenue Streams
Most brokerages usually only have 1-2 revenue streams. The 1st being monthly agent dues and the 2nd being commissions from agent splits.
Now two is definitely on the low end of a healthy amount of revenue streams for the average business but what about the brokerages that only have one of these two revenue streams?
For example, if you only make money when an agent closes a deal than your income is directly tied to your agents success. This means that your success is essentially out of your hands…
Let's dive right into my top 5 favorite revenue streams that every broker in 2017 should be implementing.
1. Affiliate Programs
If I asked you to add up all of the money your agents spent altogether on business cards, signs, flyers, web apps, CRMs, websites and everything else they used to run their business, it'd probably be a pretty high number right?
What if I told you that you're leaving roughly about 8-10% of that money on the table in the form of affiliate commissions.
If you're not familiar with “affiliate commissions”, it's simply where a business agrees to pay a commission (usually around 8% but sometimes as high as 20%) based on the sale price for a referred sale.
So in the online world a referred sale simply means, when someone clicks on your link & makes a purchase.
As an experienced Broker and past Realtor, you probably know which companies are best to use for specific products or services, and it was probably through trial and error that you found that great company that you still do business with.
Well, that's the value that you provide and the reason affiliates work so well.
Start checking with your trusted vendors to see if they offer affiliate programs (if they don't, you might want to find another vendor) and start putting up your links on your brokerage website.
When new agents sign up or your current agents need something, you can point them to your trusted vendors page that has all of your links and you can start earning commissions on your agents purchases.
FYI – Most subscription based services offer affiliate commissions for the life of the customer and usually pay 10-20%. That means recurring revenue for as long as your agent is a client.
2. Preferred Vendor Program
If you've owned your brokerage for a little while, you've probably had vendors come in trying to get your agent's business. Or sometimes they just want to come in and leave a stack of dead trees that no one will touch.
A Preferred Vendor Program is so easy to implement and what you'll notice is that most vendors are actually happy to pay!
Setting up your program is not hard at all and comes in handy when you have a random vendor show up asking if he can leave a stack of flyers in your office.
Now you'll be able to say, “Actually we have a Preferred Vendor Program that you can apply for if you're interested.”
Then hand them a flyer with what the program includes, the cost and the terms.
3. Sell Training Courses
Depending on your brokerage's business model, selling courses to your agents may or may not be in your best interests.
For example, if your agents are already paying a monthly fee and/or hefty split then I would recommend treading lightly in the area because the last thing you want is your agents feeling like they're being nickel and dimed.
However, since your success is tied to theirs, offering free courses would not only help them close more deals but it would be a great value proposition to add to your offerings to help attract & recruit more agents.
There are a couple of ways to go about offering courses to your agents.
Option 1: Build it yourself
You can build your own website and password protect your courses using a platform like WordPress (SquareSpace doesn't offer a membership solution) and link to your videos on your private YouTube channel. If you wanted to accept payments you could use PayPal or Stripe pretty easily.
Option 2: Online Course Builder
The best solution for creating & hosting online training courses and classes. Best of all, it's all branded and white-labeled to look like it's your course.
The bottom line is that agents are spending money in record numbers on training and educational content, and if you don't provide it to them, they'll just get it somewhere else.
4. Sell Marketing Materials
For every agent that wants to do everything themselves including marketing & graphic design, there are at least 2 other agents who would gladly pay and do pay to outsource some of their workload.
Offering your agents professionally done marketing materials is not hard to do at all if you're resourceful and have the right tools.
Now, I know what you're saying, “Adam, I don't know anything about graphic design!” or “I can't afford to hire a designer!”.
Don't worry, I'm not telling you to do it yourself or hire additional employees.
First, figure out what offerings you want to provide and create a menu. Start simple and small.
Here are a few examples of what you could offer:
- Business cards
- Yard signs
- Flyers, brochures, etc.
- Open house materials, etc.
What you're going to do is use Upwork.com to find a freelancer that will create and design the materials only when an agent makes an order or request.
There is really no wrong way to go about offering Marketing Materials to your agents. The value that you will provide is that you have researched, curated and built a relationship with a graphic design freelancer that consistently delivers great results.
Many agents have wasted a lot of money on unsatisfactory results from a marketing or design company that didn't deliver.
5. Agent Courier Service
Agent are busy, too busy usually.
Help out your agents and buy them some time by hiring a part-time or contract labor courier.
The courier can install signs, pickup signs, swap out riders, pick up or install lockboxes, replenish flyers, drop off earnest money and executed contracts.
The possibilities are limitless and chances are you probably already use a courier service frequently and are paying a pretty penny.
This is also another great value add to your value propositions as a brokerage because your agents will have access to an in-house courier as reduced rates.
I can pretty confidently bet that you or someone in your office knows a young person who would love a job driving around running errands.
So at the next office meeting, ask your agents if they would use and find value in having an in-house courier.
Wrapping up
So there are my top 5 favorite new revenue strategies for real estate brokerages but before you go, I want to make one thing abundantly clear.
This is about adding value to your agents and not just finding ways to nickel and dime them.
This is about adding value to your agents and not just finding ways to nickel and dime them.
So talk to you agents, ask questions and see where they need help and are struggling. Try to find ways to add value to their business and lives where you can create win-win scenarios.
If you've tried any of these strategies and they are working or not working, leave a comment below and let us know about your experience!
Thanks for reading!
