Recruiting Calls: What We Learned from 2018
One of the best things about making recruiting calls for brokerages all over the country is we gather a ton of valuable data.
And as we paused the program over the holidays, it gave us the chance to analyze the data from the more than 90,000 calls we made last year.
Here are the three biggest things we learned from our analysis.
Learning #1 – More Isn’t Better
A strong real estate market makes it easier for new brokerages to open and for existing brokerages to expand.
A strong real estate market also makes it easier for brokerages to experiment with new business models.
So over the last few years, we’ve seen a marked increase in both the number of brokerages opened and in the variety of the business models they operate.
And you might think more brokerage options would lead more agents to explore those options.
But that wasn’t the case last year.
Not only did fewer agents explore their options in 2018 versus 2017, but they also told us for the first time they didn’t want to consider a switch because there were too many options.
There’s a saying in sales that, “the confused mind does not buy”.
The market was strong for most of last year. Agents were making money.
So rather than try to wade into the confusing array of brokerage options, they chose to stay put instead.
Learning #2 – Market Shifts Matter
2018 was the first year in almost a decade we saw markets shift.
For some of our clients, the shift was a barely noticeable slowdown.
But for other clients, the market went off a cliff.
And it was clear as we examined the numbers that our success rate increased the most in those markets where the shift was greater.
One possible explanation is agents had fewer deals in process and, therefore, more time to explore their options.
Another possible explanation is the shift created uncertainty that led agents to seek out brokerages they felt would help them weather the storm.
My guess is it’s a combination of both.
But regardless of the reason, market shifts make recruiting easier.
Learning #3 – Location is Critical
One of the best indicators of interest during our calls is whether an agent asks us the location of the office.
And if we give agents locations they don’t feel are close enough to them, it’s the end of the conversation.
Even the agents who tell us they rarely go into the office still want a physical location close to them.
So as you’re putting together your prospect list or considering opening another location, just know most agents won’t join an office more than about 15 to 20 minutes away.
And in areas where there are distinct markets, most agents won’t consider an office that’s out of their market, regardless of distance.
P.S. - Whenever I share our learning about office location, I’m inevitably asked about companies that don’t have physical offices (like eXp).
Producing agents are sensitive to location. Nonproducing agents* are less sensitive.
eXp, as an example, primarily attracts high producing teams and nonproducing individuals.
The high producing teams that join eXp often lease office space of their own.
So although they choose to join a virtual company, they also see the value in having a brick-and-mortar location.
It’s possible in the future producing agents will care less about location.
But for right now, brokerages without physical office space will find recruiting producing agents difficult.
*I define nonproducing agents as those who do fewer than four deals per year.