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How To Improve Your

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

Where and how much you


should spend on technology

Best way to implement


and track the success of
new technology

How to plan for success


today and tomorrow

BROKERAGE PROFILE
Table of Contents

Brokerages from all over the country participated in the


following study. They varied in size from under 50 sales
associates to over 450 sales associates with a combined

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

average sales volume of 1.25 billion dollars for 2015.

Key Takeaways . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Brokerage Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Technology Spend . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Northeast

Systems to Invest In . . . . . . . . . . . . . . . . . . . . . . . . . . 4

West

Determining Your Technology Spend . . . . . . . . . . . . . . 6

Midwest

Who Pays for What? . . . . . . . . . . . . . . . . . . . . . . . . 7


Make Sense of the Cents . . . . . . . . . . . . . . . . . . . . . . . 8

Southeast

Measuring System Success . . . . . . . . . . . . . . . . . . . . 8


One Step Forward; Two Steps Back . . . . . . . . . . . . . . 9
Providing the Right Tools . . . . . . . . . . . . . . . . . . . . . 10
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
About the Sponsor: Moxi Works . . . . . . . . . . . . . . . . . 11

West

27%

Southeast

23%

Midwest

33%

Northeast

17%

About REAL Trends . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Participating Brokerages by the Number of Sales Associates

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.

Number of Technology Service Providers


Used by Brokerages

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

Combining systems into fewer platforms means greater clarity


in tracking a lead from initial outreach to closing, and the
potential for overall lower costs. Integration between those
platforms improves the user experience for sales associates
and leadership alike. Moxi Works is an example of an open
platform that provides several tools and integrates a wide
variety of others.
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first consider the tools that have the greatest


impact on your brokerages productivity. This
eliminates the stress of deciding what systems
to invest in and makes it easier to turn down
vendors who may have a cool product that isnt
functionally critical for your business at that
moment. Consider partnering with technology
providers that provide multiple tools a plus, but
dont overlook their ability to customize your
solution. You want to ensure that you are only
paying for the tools you need.

Determining Your Technology Spend


Technology costs can add up quickly considering the
multiple systems and services used by brokerages in their
day-to-day operations. To complicate matters, similar
systems can differ in functionality and features, making a
side-by-side comparison a challenge.
Company websites ranked as the most expensive
technology tool for the brokerages surveyed. The variety
of front-end and back-end features available for brokerage
websites makes it difficult to calculate an average monthly
spend. In the survey, brokerages reported spending
anywhere from $500 to $18,000 a month for their website.
Unsurprisingly, as the number of features increased,
so did the cost of the website. Commonly provided
features include database/lead management, back-end
communication networks (intranets) and email marketing
platforms.
Brokerages may not spend the same amount of money
across the board on any one technology service; however,
on average, 11 percent of their monthly costs are from
technology services. For firms that employ developers or
programmers, personnel costs averaged 5 percent higher
with technology costs averaging 5 percent lower.

Average Monthly Expenses


of a Brokerage

Other 3%

Technology
11%

Phone &
Internet 6%

Personnel
Costs
35%

Office
Supplies 5%
Marketing
Advertising
11%

Lease & Utilities


21%
Legal & Professional
Services 8%

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

expenses should be.

Who Pays for What?


There is a way to expand your technology offerings without
incurring all of the costs. Several brokerages across the country
share the technology costs with their sales associates. This is
done through a monthly fee that all sales associates pay or a cost
paid only by participating sales associates for specific products.
Monthly technology fees range from $25 to $200 and depend on
the services provided. Either approach is effective, and provides
the service or tool at a better price than either party could
accomplish individually.
Lead generation tools, agent websites, email marketing platforms
and design-to-print services ranked as the systems that brokerages
are more likely to share costs on with their sales associates. Unlike the
other systems listed where a monthly fee is applied, lead generation
costs are generally shared through referral fees collected by the
brokerage from the sales associate once the lead closes.

41% 31% 27% 26% 10%


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When considering the structure of how to share costs for services,


determine how valuable the service is to the sales associate and
the brokerage. The more valuable a tool is to a sales associates
business, the more accessible it should be to them. Also, if you can,
combine multiple tools into one, fixed monthly cost. As long as the
brokerage does a good job of explaining the benefits included with
that cost, it simplifies the expense for both parties.

TIP:
CRM/Database
Management

Design-toPrint Services

Email
Marketing

Agent
Website

Lead
Generation

Percentage of Brokerages that Split Costs with


Sales Associates on Specific Technology Services

Customer Relationship Management (CRMs) systems offer valuable


way for brokerages and sales professionals to maintain existing
customer relationships and manage leads. However, many CRMs
arent one-size-fits-all models. To circumvent this issue, several
brokerages offer more than one CRM solution for their sales force.
It may mean more work for the broker-owner to analyze the overall
flow of business, but it allows for greater agent adoption and buy-in.

REAL ESTATE PROFESSIONALS ARE DRAWN TO TEAMS OR


BROKERAGES because of their ability to provide them with
viable leads. Consistently evaluate the lead generation tools your
brokerage is using, and identify which source is producing the
highest quality leads. Quality wins over quantity and strengthens
recruiting and retention efforts. Collecting a referral fee at the end
of a transaction is just one way to share the cost on leads. Further,
differentiate yourself from the competition by diversifying how you
share costs on lead generation tools.

MAKE SENSE OF THE CENTS


Measuring System Success
Calculating the return on investment (ROI) for technology services
isnt widely practiced by broker-owners for one simple reason, its
hard to figure out. For those who do track their ROI, its largely
based on the product usage. Google Analytics and website
registrations can help when it comes to websites. For other
technology tools like intranets, transaction management systems
and mobile apps, brokerages rely on basic methods for assessing
product usage, also known as agent adoption.

3 Most Common Ways to Track Agent Adoption


How frequently an agent uses the product or service
over a time period

To accurately determine the value of a product or tool, brokerages


must assess the sales associates sense of value for the product.
The best way to measure value is through user feedback. Informal
verbal feedback is common, but can fluctuate from day-to-day
and user-to-user. Anonymous surveys give broker-owners the most
valuable feedback about the technology services they provide;
however, this extra step requires more planning, time and
interaction with agents.
Some brokers reported measuring the success of their technology
systems based on their production levels or their ability to retain
sales associates. When taking this approach, a broker-owner must
factor in market conditions and competitor offerings. Otherwise,
this method can be misleading in evaluating the success of a
technology platform or tool.

If an agent uses the product or service on a consistent


basis
Based on an agents sense of value of the product or
service
Tracking agent adoption through login activity is the most common
way to gauge interaction with a tool, but can be flawed if assistants or
team members login on behalf of the sales force. Platforms that dont
indicate what features or functions people log in for are also limiting.
For example, in a multi-level platform, users may log in to update
leads, schedule email campaigns or make a change to their website.
Single sign-on (SSO) is a must for simplicity, but a good platform
should measure and report various activity as part of the product.
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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.

One Step Forward; Two Steps Back


Ensuring the adoption of a technology tool starts months before
sales associates have access to it. No matter how great a product
or service, its still a disruption to business. The amount of strategic
planning behind the launch of a new tool can help reduce the amount
of distraction and boost overall usage.
Announcing new technology services during company meetings and
offering in-person training for sales associates ranked as the most
popular methods for rolling out new technology services; however,
no single method is used as a stand-alone solution. Each brokerage
surveyed used a combination of communication and training strategies
to reach their sales associate base.

Percentage of Brokerages that Use these Rollout Strategies

100%

Announce during company


meetings

100%

Offer in-person training of the


product/service

88%

Announce in an email or
email campaign

75%

Announce through a company


communication tool

63%

Showcase product/
service at a company event

63%

Offer virtual training


of the product/service

50%

Launch a contest centered on


learning/using the product/service

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.

Providing the Right Tools


Its easy to get caught up in implementing a new service because
the competition is doing it, or because it is the latest buzz in the
industry. Brokerages can cut through the noise and determine a
specific mix of products to offer, fully paid for by them or not, by
looking at what services benefit where their business is at today
and where it headed.
Online reputation management is by far the least provided service by
real estate brokerages, but it is also the newest tool. Online reviews
of sales associates and brokerages will grow as time goes on, as will
the need to monitor an agents online presence. This is a tool that is
worth investing in now.
On the other hand, providing a company intranet system is still done
by 93 percent of brokerages. As the number of group texting, chat
and cloud storage platforms grows, the use of intranets in brokerages
could decrease. A change like this wouldnt happen overnight,
and may not be an issue for platforms with integration options, but
its something brokerages should look at when considering their
infrastructure five years from now.

45% 24% 17% 15% 7%


10

Design-to-Print
Services

Intranet

Lead
Routing

Mobile
App

Lead
Generation

Online Reputation
Management

Percentage of Brokerages that Dont Provide


these Specific Technology Services

7%

Planning for a technology change isnt always possible. A vendor may


go out of business or there could be a sudden loss of personnel.
However, the majority of brokerages who make a change to their technology do so voluntarily. Switching website providers, changing lead
sources or adding new features to a CRM are all proactive decisions.
From those surveyed, approximately 80 percent of brokerages
decide to make changes to their technology on an as-needed basis.
As needed implies that the decision is made either proactively or
reactively. When possible, brokerages should avoid a reactive
approach to technology product changes.

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.

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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.

About the Sponsor: Moxi Works


Moxi Works is a residential
brokerage services company
that makes agents significantly
more productive and brokerages more profitable by helping them
effectively run their businesses.

Moxi Works integrated platform is centered on a sphere-based


selling process that drastically increases agents repeat and referral
business, while lowering overall technology, training and support
costs for the brokerage. With Moxi Works, brokerages are able
to make their agents lives simpler and their businesses more
successful.

About REAL Trends


REAL Trends is a privately-held publishing, consulting and
communications company specializing in the residential
brokerage and housing industries. REAL Trends provides
a wide range of advisory services to a clientele of local,
regional and national real estate organizations. REAL
Trends areas of expertise include operational analysis,
valuations, merger and acquisition advisory services,
compensation analysis, consumer and business research,
strategic planning and technology and digital marketing
consulting services. REAL Trends is The Trusted Source
for news, analysis, and information on the residential
brokerage industry since 1987. Visit REAL Trends at
www.realtrends.com.

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