While National Brands Misfire - Upstart Real Estate Network Grabs Market Share

What is the purpose of creating a brand? Maybe a better question is what would happen in our modern economy if brands didn't exist? That is, what if all products and services simply were called by their generic name? Kleenex was Tissue. Pepsi was Cola Drink. Ritz-Carlton was Hotel. Big Mac was Hamburger Sandwich. In all of these cases, from a consumer's perspective there would be no differentiation from one product to another in their respective product categories. Even if one product offering was far superior to its competitors, there would be no way for the consumers to identify which product it was simply by looking at the package. And thus, the function of branding is to help with the point-of-purchase decision making process of the consumer.

The branding of a product or service is created by utilizing marketing, advertising and public relations to convey a higher value of one product over another to the product's target market. The more skilled and diligent these disciplines are consistently applied over time, the better the brand awareness for the product or service becomes. So, as the producer of a product or provider of a service, the purpose of branding is to create a perceived value in the minds of consumers that will make them think of and purchase your product or service instead of that of a competitor. When product or service offerings are plentiful and perceived to be nearly identical by consumers, then using branding to win this battle in the minds of consumers becomes critical.

To illustrate how this works, here are some examples:

Q. What is Domino's Pizza's BRAND?

A. If you said the red, white & blue Domino's pizza box, you'd be wrong. That is part of their MARKETING IMAGE, but not the BRAND. For that you need to look at the value to the consumer. What is their need that Domino's fulfills? The answer is that your family is hungry and you don't have time to cook. So, Domino's promises to feed them in under 30-minutes. THAT is their BRAND! Remember "Delivered to your door in under 30-minutes, or it's FREE"?

Here's a another:

Q. What is LensCrafter's Brand?

A. If you said "Eye glasses in about an hour", you'd be correct! See, you're catching on.

How about:

Q: What is McDonald's Brand?

A. You may have thought of a few negative opinions of their menu offerings, but in the end you'll agree that their brand is a fast and consistent meal that meets your expectations anywhere you go in the world. Yes, that's a little tougher, but they have made more people into millionaires than any other company based on the brand of offering consistency.

Now, let's apply all of this to real estate:

Q: What is Realty Executives' Brand?

A. Hmmmmmm? You know, I'm not really sure, either. I don't mean to be coy, nor disrespect the fine agents at Realty Executives, but I've been in this business for 15 years and I can honestly say that I don't have a clue what their value proposition to the public is.

Q. Coldwell Banker's? Century 21's? Keller Williams'? Prudential's?

A. Again, I don't really know. If a buyer wants to buy a home, or a seller wants to sell a home, what is it about any of these brands that connects with the consumer to make one stand out over another?

How about this one:

Q. What is RE/MAX's brand?

A. Ah, you say, THE BALLOON! One of the most recognized logos in the world. Great answer, but wrong again. The famous balloon logo is also a MARKETING IMAGE, not a BRAND.

Well, what about "Above the Crowd", or "Outstanding Agents, Outstanding Results" you say? Aren't they all part of the brand? The answer is yes and no. RE/MAX has a lot of great agents, but so do the other brands that I mentioned above. They also have a lot of them. If you are an agent in any medium to large city, there could be hundreds or even thousands of great agents working at these companies and they are all fighting over the same market share. Even if a consumer believes that RE/MAX has "Outstanding Agents", as one of their agents you could still find yourself in competition with hundreds of your own colleagues. In the consumer's mind, they still don't know who to hire because all agents sound the same. They all are claiming to be #1. Somewhere the RE/MAX brand became more about the agents themselves than the consumers they serve. The very name stems from "REal estate MAXimums" which stands for maximizing an agent's commissions and nothing to do with the consumer, so it really doesn't address the need of helping the consumer in the point-of-purchase decision making process.

So, as an agent, how do you create a perceived value in the minds of consumers that will make them think of and purchase your service instead of that of a competitor? How do you use a brand to stand out from your competition?

Is the answer in the red hat that you wear? The Hummer that you drive? The family pooch in your photo? The pumpkins and flags that you give your farm area on the holidays? None of that is a brand; it's a personal image. Confusing a BRAND with a PERSONAL IMAGE is the single biggest mistake that agents make in their marketing. Advertising a personal image will create a memory in a target market. Advertising a brand will connect at a deeper level with your target market because the brand fulfills a need. A successful brand will win the battle in a consumer's mind every time over a personal image.

Where the big companies mentioned above have missed the mark, a national upstart company out of Newport Beach, CA seems to have gotten this right. The Professional Realty Council (PRC) gives its network of PRC Council Members a consumer-centric brand to secure a place in the minds of buyers and sellers. You may have not heard of PRC, but you will soon. They are the first company on a national level to require background and credential checks of all of their agents. Consumers have a natural distrust of real estate agents because as I demonstrated above, they can't tell the difference between them. Often it's too late when they realize that the agent they hired is inexperienced or negligent. PRC solves this problem by only accepting applications of REALTORS who pass their minimum required standards, pass a background check, and have significant area and industry knowledge. Their brand reflects that "You can hire any agent and take your chances, or hire a PRC Council Member and buy or sell with confidence." This brand resonates with a consumer because it meets a need: they want a qualified agent that they can trust.

In this economy, consumers also want to know that they are getting a good value. Home builders and relocation companies for many years have offered incentive packages to their buyers and sellers if they use their preferred vendors. The transactional savings these 'managed accounts' create are passed along to the consumer in the form of a benefit package. Because PRC offers a similar benefits package to its nationally relocating clients, every agent in their network is able to offer the same "National Benefits for the Local Move" to all of their local clients - even if they are simply moving across the street. Again, a need of a consumer is fulfilled by the PRC brand. This creates value and demand for the services of their member agents.

The Gallup Poll conducted a study for the Better Business Bureau in April 2008 of what consumers want from a business they buy from. The top four answers were:

72% - Deliver on their promise

70% - Stand behind their advertising

67% - Increased Disclosure

66% - Certify products are inspected and safe

PRC realized that there is a natural hesitancy for buyers to make an offer on a home that they know very little about. They are suspicious of the seller and fear the unknown condition of the home. This is often reflected in low offers, difficult negotiations, extensive and costly repair requests, and often lower net proceeds to the sellers and lower net commissions to the agents involved in the transactions. Therefore, PRC offers consumers the PRC Certified Home that pre-inspects and warrants their Council Member's listings prior to placing them on the market. A buyer can purchase a typical home and take their chances, or buy a PRC Certified Home and enjoy piece of mind. Again, the PRC brand fulfills a need of the consumer and leads to a happier transaction for everyone involved.

Lastly, because PRC only certifies enough agents to serve their market areas, there is virtually never competition between agents. In fact, PRC only allows 1 agent to be certified per 5,000 households. This works out to about 1 per zip code, or about 30,000 agents nationwide. Again, by keeping the supply of agents exclusive to their communities, they each experience higher demand and enjoy greater market share.

It is very difficult and expensive for a single agent to create this kind of consumer-centric brand on their own. Yes, they can get a background check and offer incentives on their own. They can even pre-inspect a home. However, they lack the story and 3rd-party credibility that a national company like PRC can use to substantiate value and trust in the minds of consumers. It's not just about what services you offer, but the perceived value that will make a buyer or seller think of and purchase your services instead of that of a competitor. PRC acts as an advocate of the consumer, therefore their endorsement helps their certified member agents stand apart from their competitors and gain market share in the communities they serve.

For more information about PRC, please visit www.PRCStandards.net