GM Fuels New Residential Real Estate Brand

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RISMEDIA-NRRE VOL 16-3 March 2000

GM Fuels New Residential Real Estate Brand

An Interview with Mike O?Brien, President & CEO, GMAC Residential Holdings

After decades of being defined solely as an automobile financing company, GMAC revved its engines in 1985 and took off in a new direction ? home financing services. By 1998, with strategic acquisitions that included the Better Homes & Gardens Real Estate franchise network, and a number of relocation businesses, GMAC decisively moved into residential real estate.

Today, GMAC is an established presence in home buying and selling, real estate brokerage services, broker network services and relocation services. This year, more than 2.5 million customers will be served by the homeownership companies of GMAC: GMAC Real Estate, GMAC Mortgage and GMAC Global Relocation Services.

National Relocation & Real Estate recently interviewed Mike O?Brien, president & CEO of the GMAC Residential Holdings, which is made up of GMAC Home Services, GMAC Mortgage and GMAC Bank. O?Brien shared his vision for the GMAC enterprise within this rapidly changing industry.

NRRE: It seems the new GMAC Real Estate logo is growing in popularity. What is the reaction to the new brand?

MO: Response has been positive. We unveiled the GMAC Real Estate brand in October of last year to unify all our real estate professionals, both Better Homes & Gardens Real Estate network affiliates and company-owned GMAC Real Estate members, in one, strong organization dedicated to helping people realize their homeownership dreams.

We?ve found that enthusiasm for the brand continues to grow as real estate professionals come to understand the value and power of the GM name and all that comes with it. The next two years will bring ongoing transitions to GMAC Real Estate as Better Homes & Gardens network affiliates adopt the new brand and the services and resources it offers. At the same time, the national TV ad campaign we?ve just launched and our extensive e-business initiatives will increase consumer awareness of the brand.

NRRE: It seems the launch of the new brand was just the first step. How do you see your business evolving?

MO: This is a challenging and exciting time to be building a business. As technology advances, we now have the tools to streamline complex transactions, such as the purchase and sale of real estate. Any organization positioning itself to serve consumers must evolve under this new model, which provides customers with timely and reliable information, personalized service and better value. It?s all about engaging customers on their terms ? when, how and where they want to be served.

This structures the launching pad for GMAC?s homeownership services. GMAC now brings together a quality combination of real estate, relocation and mortgage professionals in what has grown into a serious national competitor.

NRRE: How do you see your relationships with your customers changing?

MO: Our new business model positions us as a facilitator of real estate and home services, providing valuable resources and access to professionals that can save our customers time and money and, equally as important, reduce their anxiety as they deal with complex, life-changing transactions.

We want customers to view us as an organization that offers a variety of solutions and choices, not only in the services we offer, but also in our channels of communication. Not every consumer wants to be served in the same way, even for the same product. We?re committed to meeting our customers wherever they choose: the phone, the Web or in person.

NRRE: How is GMAC using technology to change the business process and customer experience?

MO: We are driving several technology initiatives concurrently to reach our key target audiences: Customers, brokers and agents and employees.

For our customers, this means re-thinking the services we offer and expanding our lines of communication to include the 24/7 convenience of the Web. We recognize the enormous change in how people access in- formation for buying and selling homes. To- day?s consumers are looking for instant ac- cess to the best and most comprehensive information, guidance in making decisions and convenient ways to act on them.

In response, our family of Web sites is designed to provide timely and reliable information to help our customers make the right choices. We?re also providing tools that allow our customers to transact their business online, on their schedule when they feel comfortable and ready. For example, our GMAC Mortgage Web sites ranked second overall in online originations during the fourth quarter of 1999. We believe this is the future of the real estate business, and we?re working hard to be at the forefront of this shift. We want to lead, not follow.

Our technology initiatives to assist our brokers, agents and employees are across the board ? from building our Intranet, which provides our employees with up-to-the-minute information about our growing enterprise, to researching mobile solutions for our mortgage officers and brokers, allowing them to be more efficient and effective on the job. We are investigating any and all technologies, from cell phones to personal digital assistants (PDAs) to find ways to give our team more information and make their jobs easier.

NRRE: What advantages does being part of the GM organization provide?

MO: Because of its size and diversity, General Motors, by its very nature, represents enormous access to millions of potential customers.

We are focused on meeting the needs of consumers, and two of the basic needs that are on the top of everyone?s list are transportation and shelter. So the move into homeownership is really a natural extension for us, and it leverages the millions of customer relationships that already exist within GM and GMAC. Each month we set new highs in the number of GM related referrals we handle for the home purchase and financing.

GMAC has long been a nationally recognized leader in providing vehicle financing, and millions of consumers also know GMAC as their provider of real estate financing. Our hope is that millions more will now associate GMAC with the purchase and sale of real estate and other family relocation services.

In addition, GM nurtures a corporate culture that seeks to provide support and benefits to all employees, which has led to the creation of GM Family First. This program offers a personalized program of mortgage, real estate, moving, and other services designed exclusively for GM and subsidiary employees, both active and retired, as well as their immediate family members. This program, in turn, provides GMAC Real Estate and GMAC Mortgage professionals access to a large qualified pool of potential customers.

We are also working hard to leverage the inherent value of being a part of the GMAC family. We have forged strong working relationships between the professionals at GMAC Mortgage and GMAC Real Estate, (for example, see Spotlight on: Wardley Realtor, page 82).

NRRE: GMAC Home Services and GMAC Real Estate have been in the news often in recent months, announcing partnerships with Internet companies. How are you leveraging these relationships?

MO: This past year, we entered into strategic marketing alliances with several key Internet players to expand visibility and referrals for GMAC brokers, to expand access to GMAC Real Estate professionals for potential customers, and to generate interest in our home financing services.

In November of last year, we launched GMAC- RealEstate.com, our comprehensive Web site, which is powered by REALTOR.com? (part of the Homestore.com? family of sites) and features all of its services and tools. The site also provides customers with a referral to a local GMAC broker, information on financing options, neighborhood and school district data, crime statistics, average home cost and much more, making it a valuable and time-saving resource for potential home buyers.

Homestore.com? has developed customized Web pages for each GMAC Mortgage branch and loan officer, en- abling these local service providers access to the latest Web tools. We?ve been pleased with the opportunities this relationship has spawned in the first six months.

Another alliance is with RealEstate.com, a site with ex- cellent content for customers seeking guidance in real estate information. This site attracts millions of consumers who are in the market to purchase, sell and finance real estate and provides a mechanism for linking Web traffic into real lead generation.

NRRE: What is your vision for GMAC Residential moving forward?

MO: We are very focused on delivering information, resources and creative solutions to attract and maintain customers for life. Promoting our brand is the essence of what this is all about. We?re building on that heritage to create residential services for all home buyers and sellers. Frankly, I believe we have an abundance of growth opportunities, both in the U.S. and internationally, which should propel us for the next two to three years. It?s my vision that GMAC Real Estate, GMAC Global Relocation and GMAC Mortgage will have achieved industry leader status as measured by market share, innovation and profitability. By the end of 2002, I?m confident that the GMAC brand will be recognized equally by consumers for real estate and relocation as it is for auto finance.

NRRE: How are you implementing this vision at GMAC Home Services and what are the challenges?

DS: We?re carrying this vision throughout the organization. The most visible evidence is our new real estate brand identity. We?re putting the GMAC Real Estate name on tens of thousands of signs across America. Our advertising will reach millions of consumers as they watch TV, drive down the street and surf the Web. In addition, we’ve expanded our reach across the U.S. through our “keystone” strategy. This strategy has led to several key regional acquisitions, beginning with Carlson Real Estate and Carlson Mortgage, based in Woburn, Mass. Additional strategic acquisitions of several real estate companies in the New England region, including Norwood Real Estate, Landry, Lyons & Whyte Company, Stearns & Yerrall, Inc., Kinlin Grover Properties, Bay Village Realty, Dallamora Realtors. Most recently, Hammond Residential Real Estate has joined the GMAC family, bringing with them reported sales volume of $957 million further strengthening our position in this market.

August of last year brought the acquisition of Koenig & Strey, a $2.6 billion real estate sales organization serving downtown Chicago and its northern suburbs. The 38-year-old, family-owned firm closed over 7,200 transactions last year and was ranked as the 21st largest real estate brokerage firm in the U.S. in the 1999 REAL Trends “Big Brokers Report.”

Expansion has continued in 2000 with the addition of Pacific Union Real Estate Group, a 25-year-old, privately owned firm in San Francisco that was ranked as the 20th largest real estate brokerage firm in the U.S. in the 1999 REAL Trends “Big Brokers Report.”

Part of our challenge has been to lead the industry with pro-active relocation solutions. The economic forces that affect business today often point toward relocation, for an entire company or individual divisions. GMAC’s response to the changing workplace has been to create a first-class Global Relocation Division, comprised of the resources and experienced professionals, such as Jim Simon leading the division and Mike Schell ? offering the international presence with Windham Interna- tional. Their team takes a complex, multi-level transition and makes it a positive, stress-free process ? for an individual employee or an entire family. This team also provides innovative solutions to companies seeking direction in relocation management.

You know, in to- day?s fast-paced and rapidly changing so- ciety, consumers are looking for a comfort level with the people with whom they are doing bus- iness, and businesses that provide multiple services and solutions to make their lives less complex. We?re offering our customers continuity and a comprehensive set of services that lets them know they will get what they need quickly and efficiently.

Being part of the GM family also ensures that we are on the front end of the technology wave, bringing technology solutions and tools directly to our brokers and agents. This, along with our commitment to offering comprehensive services and the best people, puts us in a strong position to be successful moving forward.

NRRE: The GMAC Real Estate network seems to continue to grow and expand, building on that new brand identity. How is the transition going, and how are you managing it?

AS: It?s true, GMAC Real Estate is now more than 1,450 offices and 25,000 agents strong. The transition of the brand has been really positive ? 60 percent of our network is currently in the transition process. We?ve got a great team in place, led by Ray Sculfort, executive vice president of Franchise Development, to make transition as seamless as possible. His franchise service managers are interacting closely with the members to assist in the process, and address their concerns. The response back has been enthusiastic.

One of the key ways we?re helping our members make the transition is our current advertising campaign. Beginning in March, we launched the largest multimedia campaign ever for this network. The campaign is designed specifically to raise consumer awareness for both the GMAC Real Estate and the BH&G Real Estate brands. As part of our national television blitz, we are the presenting sponsor of Discovery Channel?s Eco-Challenge, and because we have all the creative materials, we?re very excited about our 2000 ad campaign. We also have a strong presence on the Internet with our site, GMACREALESTATE.com, powered by REALTOR.com, a recognized leader in our business. Our constant review of technologically sound resources to assist our agents will continue to provide solutions to help them grow their business.

As GMAC Real Estate, we will bring to our membership and their customers a stronger, more complete package of services. Those services range from technology and marketing to comprehensive group health care for our franchise brokers and agents. We have the resources and power of one of the world?s largest and most successful financial services companies ? GMAC ? combined with our home-and-family expertise, I feel confident that we will be a premier provider in the real estate industry.

NRRE: The growth of your organization in the last year through acquisitions has been robust. How are you integrating these companies into one team?

JS: GMAC Global Relocation?s culture draws heavily on an innovative, entrepreneurial heritage that harnesses the strength of some of the relocation industry?s finest independent third-party service providers. The unique mixture of corporate and entrepreneurial elements found at GMAC Global Relocation is manifested in a dy- namic culture that includes:

? Relocation consultants with caseloads two-thirds the size of competitors?, empowering them to provide better service and to more frequently sell transferee homes on the open market (instead of sending them to inventory), saving clients millions in home sale costs annually.

? A deep talent pool that includes individuals from acquired companies, as well as key professionals that have been added. As a team, they have infused the operations with enthusiasm and expertise, and have fueled a smooth integration effort.

? A new way of working with clients based on the model of a “think tank” of consulting talent, dedicated to open and frequent communication. This team approach creates service-driven and flexible mobility programs designed for the convenience and cost savings of our clients, as well as state-of-the-art technological tools. With more and more corporations choosing to outsource relocation management services, GMAC Global Relocation not only delivers relocation services but has become a trusted partner for supporting clients? closely held cultures and deepest-seated values.

We strive to go beyond the move, to become a valued member of the team with our clients. Maggie Ryan, senior. Vice president of operations, leads the team in developing services and resources that take this commitment to the next level. She is implementing a proactive approach to identifying potential service breaks, working with a team of over 20 service professionals in our Customer Advocate Center. This team is solely dedicated to providing real time problem resolution for our customers. We have just launched a new online community for the spouses and partners of expatriates, offering a supportive forum, cultural information and job resources. The results of these initiatives include 99% client retention and 97% transferee satisfaction. In addition, we have a very low turnover rate ? our professionals are among the most experienced and tenured in the industry.


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