Consumer-centric focus and innovation position Coldwell Banker for future growth
By Maria Patterson
This time last year, Coldwell Banker began celebrating a milestone that most companies can only dream of: 100 years in business. Today, equipped with a host of innovative marketing programs, technology advancements and-not to mention-a new forward-thinking COO, Coldwell Banker is well on its way to continuing its upward journey. In this exclusive roundtable interview, Coldwell Banker's leadership team-Jim Gillespie, president and CEO; Sherry Chris, COO; and Charlie Young, senior vice president of marketing-explain how the company is aggressively launching its next hundred years.
Maria Patterson: Last year was a celebratory one for Coldwell Banker. What significance did the company's 100th anniversary hold for you both personally and as an organization?
Jim Gillespie: It was an absolutely fabulous year. I traveled nationally last year and all our affiliates had the same pride in our heritage. It reminded people of what Coldwell and Banker did to set themselves apart. It reminded people that we're young, vibrant and on the cutting edge. The final results are in for our Habitat initiative to build 100 homes last year, and we wound up raising $6.2 million and were the second-largest Habitat for Humanity homebuilder in the nation with 132 homes. This is the greatest community give-back in the history of real estate. What is so important is that we enter our second century knowing our greatest years are ahead of us. That is why the theme of our International Business Conference this month is "The Future Is Ours."
Charlie Young: The 100th anniversary gave us an opportunity to focus on where we're going in the future. Coldwell Banker has been a real estate leader for years, yet our industry is enjoying rapid technological advancements that are giving consumers more upfront control than ever. All industries go through change, basically on an S curve-there are the early adapters, then the masses come to bear, and ultimately, business starts to flatten out, then there's high growth and then you flatten out again. We're at a point where the industry is changing so rapidly and there are so many new players that we're at the top of one of those S curves and the bottom of another.
MP: As Coldwell Banker enters its second century, how do you plan on evolving the company to succeed in a rather different real estate environment?
CY: It starts with the consumer and making sure we understand what's driving them in today's real estate world. We are in the Internet age. That's why we're focusing on ColdwellBanker.com. We need to directly wage the battle for the first point of contact with the consumer and make sure we're educating our sales associates on what the consumer is looking for. Our sales associates need to learn how to facilitate the new real estate process and how to participate in the consumer's upfront information gathering process. They need to be ready to dive in during those two weeks when the consumer is actually ready to connect with an agent and buy a home (see "Marketing Prowess" sidebar).
JG: For each one of our companies, we can provide a Business Booster template where we can go in and work with them on a business plan. For select companies, we also do an operational review. We bring in a team and spend two-to-five days on-site taking a hard look at their financials, education, marketing-and report back our findings to them. We also do mini-operational reviews-called Profit Max Reviews-by phone and/or online interviews.
Sherry Chris: This year, we're having our second Merger and Acquisition academy for broker/owners. We believe the industry will continue to consolidate and because of that we're teaching our brokers how to merge with and acquire companies and identify candidates in this two-and-a-half-day seminar that we've put together.
We're also scheduling a succession planning workshop for broker/owners. We're very aware of the fact that the average age of the broker/owner is over 50, so succession-planning and having an exit strategy is important.
We believe strongly in making our technology and training available in different ways. We've developed a number of new courses so that agents can go online and learn at their leisure. We have a series of courses that are short and to the point-understanding podcasting for example. We even have Jim Gillespie on YouTube!
MP: As the competitive landscape continues to grow and diversify, how do you plan on retaining and growing your market share?
SC: As a newcomer to the brand, I'm really impressed with the amount of thought that goes into the online spend versus the traditional marketing spend at Coldwell Banker. It's exciting to see that there is a very comprehensive plan in place to shift marketing dollars from traditional to online. In my experience, our competitors are very far behind in this area.
CY: Our online media strategy is a very strategic decision to fish where the fish are. We are blocking out some key strategic areas on the Web. We have a big paid-search campaign, we are working with HGTV.com's "Designed to Sell," and the Coldwell Banker home-search engine has been integrated into the CBS News site. We spend about 30% of our media dollars in online media. In 2006, this represented a double-digit increase from 2005.
SC: When you look at brokerages across the country, on average they're spending between 5-15% online.
JG: The other tremendous advantage we have is a distribution system that's second to none. Fifteen years ago, a technological advance would have given a company an advantage for two or three years, but that is not true today. What we have now are new market players who turn up every day and provide our industry with sometimes terrific innovations.
SC: We recognize the importance of training our associates not to be afraid of new entrants to the business and to look at some of them as partners, rather than threats. Our agents are craving more information and knowledge on things like how to put listings on YouTube.
JG: We are close to the affiliated companies, know the pulse of our company and know what needs to happen at a grass-roots level.
MP: What do you see as Coldwell Banker's biggest strengths?
JG: The quality of our people in the field-our sales managers and owners, the quality and dedication of the people who work for Coldwell Banker. We're a very unique company in terms of the tenure and longevity of the people who are with us. Our senior vice presidents average over 30 years in the business and with Coldwell Banker, our consultants average over 12 with Coldwell Banker and more than 20 years in real estate. When you put that together with our integrity it's a very powerful combination.
CY: A keen understanding of our various constituencies and what their needs are. Whether it is a consumer, a sales associate who operates under the Coldwell Banker brand, or our broker/owners, we work hard to understand what their needs are and evolve rapidly in the marketplace. Our understanding of the consumer sets us apart.
SC: I have always been impressed by Coldwell Banker. Now I know why. The level of professionalism and how our broker/owners and executive team members carry themselves is amazing. There is this feeling of confidence here. In a very positive way, we all know we're with the best company.
MP: Now that the red-hot market of recent years has subsided, how is Coldwell Banker preparing its brokers to survive and prosper in a more balanced market?
JG: We have some of the most innovative training programs in the industry. For example, our FastStart and our eFastStart programs has proved to be effective. Attendees have increased their transaction sides by 100 and 133%, respectively. Boost, a virtual program, is for more experienced sales associates who are facing challenges in their markets. Along with on-site courses, there is a whole cadre of educational classes on the Web, 24-7, on the Coldwell Banker University site.
We also have educational programs designed for management. We've partnered with the Wharton School at the University of Pennsylvania to offer a one-week class that focuses on profitability, negotations, recruiting and coaching. We also offer another series called Profitable Branch Manage-ment, which uses such innovative tools as podcasts, virtual learning, blogs and the creation of performance-based Wikis.
SC: Coldwell Banker is a systems-oriented company. We survey our brokers and agents regularly to get their feedback on how we create courses and enhance them.
CY: We're launching Coldwell Banker Works-a comprehensive marketing program for sales associates, office managers and brokers that takes all of the Coldwell Banker tools, systems and marketing programs and integrates them with education to raise awareness for all we have to offer. We'll launch the basic foundation of the program through our new intranet site.
MP: What is Coldwell Banker about? How does your message as a brand stand apart in the marketplace?
JG: What we're all about is serving our customers and making sure our customers are better off with us than without us. We want to provide them with the tools, referrals and expertise to succeed.
SC: We're a well-oiled machine with a huge human element.
MP: Jim, tell us a bit about how you built the team?
JG: I would like to take credit for building the team, but it's a shared process. As I recruit and hire people, I look for those who are dedicated to the same thing that I'm dedicated to.
SC: What separates Coldwell Banker is the tremendous support we get from our outstanding staff. Every person is world-class here-everyone is dedicated to the affiliated companies and also to Jim. They work for him as the CEO and adore him as a leader. Our broker/owners and agents are really fortunate to have this team in place.
MP: How will you continue to leverage the rich history of Coldwell Banker while keeping the company at the forefront of innovation?
CY: It's all about being true to the spirit of innovation. Coldwell Banker started in 1906 from the ashes of the San Francisco earthquake with the thought of doing what was right for the customer. That's the seed that's driven everything over the years and will continue to be the foundation for what we do in the future. We're driven to make sure that we're the only ones defining who we are.
JG: The theme of our business conference says it all: "The future is ours." We are 100 years young. The next century will be ours, just like the last one was. RE
It Starts at the Top
Joining Coldwell Banker as chief operating officer in December 2006, real estate industry veteran Sherry Chris brings a wealth of experience and diversified knowledge to the company's senior management team.
"Everything that I have done career-wise up to this point has prepared me for this opportunity," says Chris. "It's a thrill to be at this company that is so well organized-it runs like a well-oiled machine."
"When I had an opening for a COO, to be able to get someone with Sherry's background and her credentials was tremendous," says Coldwell Banker Real Estate Corporation President & CEO Jim Gillespie. "It says a lot for our brand to be able to attract someone of that caliber."
According to Chris, the timing was right at Coldwell Banker Real Estate Corporation for bringing in expertise from outside of the brand. With a rich history of executive posts at companies such as Royal LePage, Real Living and, most recently, Prudential California/Nevada/Texas Realty, Chris brings a fresh perspective to the company.
"Because I have been with other organizations and have really studied the real estate market, I bring an interesting perspective from the whole country," says Chris. "Most recently, being in Northern California where a lot of technology initiatives begin, I had the opportunity to work with up-and-coming technology companies to see how some of these interesting ideas actually become successful business models. One of the things I feel very strongly about in this industry is strategically partnering with the right companies. I hope to be able to bring some of my contacts and ideas to the Coldwell Banker brand."
It's no surprise, therefore, that Chris will pay close attention to Coldwell Banker's technology initiatives. "One of my interests lies in the future of the business as it relates to technology and the importance of what I call a balanced approach," she explains. "The real estate model of the future will partner the relationship end of the business with the efficiencies of technology."
That said, upon her arrival, Chris was "pleasantly surprised" at how technologically advanced Coldwell Banker was in both their philosophy and the actual tools they provide to consumers and agents. "When you think of Coldwell Banker, you think of a brand that has a tremendous heritage, but I see now where we have a tremendous opportunity in the future because of the people here and the technology we're creating," says Chris.
"It's a bit of challenge, though," she adds. "We don't want to take away what the consumer feels Coldwell Banker stands for-that's very important. We want to enhance that with what we believe Coldwell Banker and the real estate business itself will stand for in the future."
By this time next year, Chris hopes to have taken some of the company's innovative marketing ideas (see sidebar, "Marketing Prowess") out to Coldwell Banker brokers to show them first-hand how these tools can help them be more profitable and productive.
Taking a big-picture look at the industry, Chris believes that, "We're in the very early stages of some very interesting changes." One of the most significant? Transparency.
"Access to information will continue to grow and the consumer will have more information offered to them on properties. They will know more than ever," Chris explains. "The agent's role will continue to shift to that of consultant, negotiator and partner in the transaction."
Bottom line, says Chris, agents who embrace this evolving role will succeed. "Agents are standing up and saying, ‘Tell me more; train me how to do this; I want to learn how to interact with my clients.' I think our agents are ready."
To leverage both the power of its rich history along with its progressive training and technological programs, Coldwell Banker devotes a keen eye to building a diverse and robust marketing strategy. At the helm, Senior Vice President of Marketing Charlie Young.
"The rate of change in real estate marketing is so dramatic and gets faster and faster," says Young, who believes changes in the technology arena are happening in two key areas: data and how consumers are gaining access to information.
"The biggest, number-one change affecting real estate marketing today is the role of the consumer," he explains. "Those of us that are going to succeed are the ones that best understand the needs of consumers."
According to Young, today's real estate transaction process has an upfront component that involves the dreaming and information gathering consumers undergo, and a secondary, "in-market" component, where consumers act quickly to choose an agent and make a decision. While the upfront portion of the process can last for months or years, the in-market component lasts only about two weeks (according to the California Association of Realtors 2006 Internet Usage Study).
For real estate companies to succeed, says Young, they must reach consumers during the upfront, "infotainment" stage, where consumers are dabbling, yet gathering information. If a connection is made during this phase, the real estate professional stands a much better chance of getting the business during the brief, in-market phase.
To that end, Coldwell Banker has geared its marketing strategies toward catching and keeping the interests of consumers. "You have to be relevant to the consumer," Young explains.
This concept is certainly not a stretch for Coldwell Banker who was the first to launch a national real estate Web site in 1995. While that first site was more about the actual process of finding a home and connecting with an agent, today's coldwellbanker.com has expanded its relevance with other consumer interests, such as satellite mapping, neighborhood amenities, custom videos and home-valuation data.
Down the pike, says Young, Coldwell Banker will be experimenting with user-generated content allowing sellers to post content, photos and videos about their listings to the site.
According to Young, "We're at one of the fastest-moving points in history-our history provides us with all the confidence in the world that we're going to be able to move with that change and pop out on top. The brokers and the sales associate populations are looking for guidance and leadership in times of great change and it's our job to make it easier for them to navigate and produce in this market."