Real estate brokerage operations carry razor-thin margins. Especially with recent market conditions, brokers are struggling to cut costs. The unfortunate result is that many brokerages are ending up embracing mediocrity.
Brokerages are settling for less because they think the bare-bones free (or “freemium”) tech they provide their agents is “just good enough.” Unfortunately, it’s not.
As Henry Ford warned, “Mediocrity is the worst enemy of prosperity.”
Frugal or foolish?
Many brokerages are assessing their technology suites and cutting back. Some may think they are cutting fat when, in fact, they are cutting muscle and bone.
Real estate tech companies are scrambling to find a way to retain clients as brokerages look to slash expenses. In response, some tech providers deliver a basic free version—often using a freemium model, where agents pay more for the functionality they need. This is one way brokers can seemingly avoid the impression of taking tech away from their agents.
But make no mistake: Agents are the ones who will suffer the most from this wrong move.
No free lunch
It won’t happen overnight, but soon, brokerages will discover when they cut the wrong costs that “there ain’t no such thing as a free lunch.”
Brokerages may be missing how important having the right technology—particularly tech that supports agent marketing—is for retaining the best agents.
1000watt recently asked 400-plus agents nationwide who left for another brokerage in the last two years why they moved. More than one in four left for better technology, and one in three exited for better marketing support. These motivators significantly outranked a better split or comp plan, training or culture.
Clearly, the cost of deploying “free” tech has significant hidden costs.
Combating mediocrity
The one area in which broker/owners have control over mediocrity is with their real estate technology. Advances in AI now available to real estate agents are raising their game: using these new tech tools can significantly boost productivity.
Unfortunately, you won’t find the best new tech in a freemium tech offering. It is dangerous to simply “check the box” when delivering the right tools that today’s modern agents need.
Becoming less competitive
Beyond retention, free technology can negatively impact a brokerage’s market competitiveness and reduce the ability to differentiate. With fewer listings, competition is more intense than ever, and agents must be empowered with the tools to differentiate themselves in their local markets and find new ways to capture more business.
Reducing the quality of the technology a brokerage provides has the opposite effect. Now, more than ever, brokerages need to increase their competitive advantages as agents are telling us that great tech and better marketing support are what they need.
Remember: Free costs you money and does the opposite of why you are cutting costs as it narrows your margins, negatively impacting your brokerage.
For more information, visit https://www.deltamediagroup.com.
