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REAL Trending Special Edition: Growth

Nov 13, 2020 6:00:00 AM

On this REAL Trending special ed, we're speaking with Greg Sexton, COO of Century 21, Tracy Hutton, CEO of Century 21 Scheetz and Jennette Phillips Todrick, broker of Century 21 Union Realty Company in Torrance, California.

 

Want to learn from the brightest minds in real estate, then you'll love our REAL Trending Special Edition podcasts, Editor of Chief of Content, Tracey Velt interviews, brokerage leaders, top agents and teams and industry experts on leadership, recruiting, marketing, and more. Subscribe today at Realtrendsinc.podbean.com.

Tracey Velt:

This is your host Tracey Velt, editor in chief of content for REAL Trends. Today, we're speaking with Greg Sexton, COO of Century 21, Tracy Hutton, CEO of Century 21 Scheetz in Indiana. They are ranked 136 by Transaction Sides in the 2020 REAL Trends, 500 brokerage rankings and serve the greater Indianapolis area since 1995.

We're also speaking with Jennette Phillips Todrick broker of Century 21 Union Realty Company in Torrance, California. Century 21 Union Realty Company is a family owned business, which has specialized in and grown with the many distinguished communities in the South Bay. So welcome for joining the REAL Trends podcast.

Tracy Hutton:

Great to be with you.

Greg Sexton:

Thank you for having us, Tracey.

Jennette Phillips:

Thank you for having me.

Tracey Velt:

Yeah, so we'll just have a conversation. I want to start with Greg and tell me a little bit about the two companies and how Century 21 has worked with them to help them grow.

Greg Sexton:

Well again, thank you Tracey, for having me. What's interesting is during this time of COVID you might've thought well, wow, from a M&A perspective, or even from a recruiting perspective, things might've slowed down. What we saw was actually the complete opposite. Companies like Tracy's and Jeanette's that are joining us today, actually experienced the other. In fact, I would say, took a look at the situation and looked for opportunities to grow.

And from Century 21 perspective, we have been laser focused on growth. And I think that when you take a look at the two companies that we're talking with today, it's really a tale of two paths of growth. And what I mean by that is mergers and acquisitions. That is something that Janette and Century 21 Union has been involved in. And then when you shift over to Tracy's company, they are laser focused on organic growth through recruiting and have done a great job there.

Greg Sexton:

Well, let's step back and talk about the merger and acquisition side of what has happened with Jeanette with union. But I think that what we've seen happening across our franchise network, and when you think about mergers and acquisitions, we're looking at it in two ways. We're doing what we call goal to goal.

Well, that's where we will take one of our franchisees that's really looking for an exit strategy and Tracey, one of the things that we find during either a downturn in the market, take it back to the 08, call it recession. We saw this same phenomenon that companies start really looking for an exit strategy. So we proactively go out to our companies, find out what is your plans for the future? What are your growth plans or are you looking for that exit strategy?

Greg Sexton:

And in this situation with a Union, they had a real opportunity and opportunity to actually double the size of their company. Maybe more than double the size of their company by taking and working with a Century 21 that really did want an exit. It was ready to get out of the business. We were able to put those two companies together. Our team really starts to get in and facilitate what does an acquisition look like?

And I think that one of the learnings that we have and have had for many, many years when it comes to mergers and acquisitions is it's not just getting the acquisition and done. It's making sure that we have the infrastructures in place. So the ones that acquisition is done, we don't have what we call breakage and breakage's where edges that you're are in the middle of this acquisition decide, "Hey, I'm going to go elsewhere."

Greg Sexton:

And I can tell you Jeanette's company did a phenomenal job of making sure that they had really done a lot of planning and execution before the actual acquisition occurred. So that's a lot of what's happened there. We also are doing a lot of M&A's and work with our companies that are not a goal to goal within the Century 21 family, but literally looking at our companies that have a real appetite for growth.

And then we go to the marketplace and look at those independent real estate companies who also might be looking for an exit strategy. And so we proactively work there. So that's kind of the tale of the M&A side of it and how we were able to accomplish that with Union and the remarkable job they did. You kind of shift gears, you talk about Tracy and what she's done at Century 21 Scheetz.

Greg Sexton:

They are very, very laser focused with their management team on the recruiting aspect, and they have done a great job of getting out there into the marketplace and really telling not only the Century 21 Scheetz story, but they combine that with the kind of the Century 21.

What are the tools systems that come to place that would allow agents to take a look at their business and see that their business could actually grow by joining another company and having some additional resources. I will tell you that one of the things that I think is so important when it comes to recruiting, and this is where Tracy and many of our other companies do a good job, it's all about being able to tell the story, tell the story of your value proposition.

Greg Sexton:

I think that's actually the difference between success and failure when it comes to recruiting, because an agent for them to make the move, to leave a company that they might've been with for a long time and go to another company, they want to make sure that there's going to be an immediate growth for their business.

And so when you take a look at Sheets over the years they've grown tremendously and it's just remarkable that it wasn't on an M&A path, but more on just a sustained recruiting effort. So that's the success they've had Tracey.

Tracey Velt:

Okay. That's really interesting. I agree with you on the M&A front. I know REAL Trends has quite a few companies for sale right now, and valuations are skyrocketing.

Greg Sexton:

Absolutely.

Tracey Velt:

So definitely some opportunities out there for companies looking to expand. I'll start with Tracy with Century 21 Scheetz in Indiana. So tell me a little just briefly about your brokerage and then we'll go into how you've grown your brokerage. It sounds like it's mostly through recruiting. So just talk to me a little bit about that.

Tracy Hutton:

Sure thing. So you had mentioned that when you introduce us, our brokerage actually started as an original Century 21 franchise in the state of Indiana in 1976, not 1995, but I came along and joined the firm in 1995. So that's probably where that date came from. So I was recruited to Century 21, I was 25 years old. So now all of you know, how old I am.

25 years old and Mick Scheetz, who was the founder, had one office at the time, probably about 40 or 50 agents and a really strong office. And he hired me to start growing the corporate side of the business, the relocation side of the business. And so we dug in and carried out a vision on how we compete on that front with some of the bigger brokers in the marketplace.

Tracy Hutton:

Thank God I was young and naive and didn't know any better and just took his advice and started calling on corporations across Central Indiana, and then also corporate relocation companies. So we were able to scale our business through growing our corporate business first. My appetite got wet and said, "Hey, how do we continue to grow our footprint in Central Indiana to support this business?" So he was in a stage of his career where he felt confident in letting go some of the role to me.

I was able to really light the entrepreneurial spirit within myself or I would say he probably helped like that. We got laser focused on a vision of who we want to be, how we want to do it, how we want to be seen in our market and really not just in or within our market, but within the Century 21 brand and across the country to peers. So we knew who we wanted to be as leaders, who we wanted to be as a brokerage, how he wanted to be viewed in the community and we just built upon that.

Tracey Velt:

I actually write that down and have meetings about it brainstorm. How did you get that message across?

Tracy Hutton:

While you're always refining your message. Right? So, I wouldn't say we were that strategic about it at the beginning. I mean, it was really visionary exercise and we looked. I mean, I'm super curious about successful brokerage models across the country and even in our local market. I mean, I asked a lot of questions.

This is a lot of brokerages and really took what I thought were the best components of those brokerages and said, how do we develop it within? I don't know who said it, but it stuck with me. We're always chasing a better version of our company. And with that is also chasing a better version of ourselves and as leaders. So we never feel like we've arrived and we've never faced that identity crisis.

Tracy Hutton:

And I think so often when you're running a company, you're trying to figure out what's the new best way. Right? But sometimes when you shift too drastically, like to constantly be reinventing yourself, you can have an identity crisis and then you're leaving it... Agents are wondering what's the value proposition here. It was different two years ago or five years ago. So really trying to be consistent, but also trying to evolve.

We always have known that we want to be a brokerage that has highly productive agents. We're probably not the best model for dual career or part-time agents. We just know that about ourselves and we're able to play upon that and really constantly try to elevate the experience for our agents, our customers, and our leaders within our organization.

Tracey Velt:

Okay, great. I want to get a little further into that when we talk more about recruiting, but first I want Jeanette to tell me a little bit about their growth strategy with mergers and acquisitions and geneticists with Century 21 Union Realty in California.

Jennette Phillips:

Absolutely. Thanks for having me today, Tracy. So I'm with Century 21 Union here in lovely Torrance, California. I'm about 20 minutes on a good day from LAX, about two miles from the beach. So we've got two offices here, one in Torrance and one in Rolling Hills Estates. I'm actually a third generation broker.

So you had mentioned it a little bit in the beginning. We're family owned and operated. My grandpa started out in real estate in the sixties. My dad took over in 72 and we affiliated with Century 21 in 84. I was born in 81. So it's pretty much all I know. Definitely a family generation company.

Jennette Phillips:

We really thrive on our quality service and really have built our company around a strong culture, which has really helped with the merger and acquisition part as Greg had mentioned a little bit in the beginning. This year we were able to go from 110 agents to 270 with the acquisition of another office in our area.

Tracey Velt:

Okay. Was it another Century 21 office or an independent or?

Jennette Phillips:

Yes, another Century 21 office.

Tracey Velt:

Okay. Okay, great. So what do you look for in merging your company? What worked for you with this merger specifically?

Jennette Phillips:

I think the most important thing... And I can tell you, I have learned a lot from this merge, but the most important thing is really the culture. You want to make sure that the two cultures are aligned so that when they come together, there's no clashing and everybody is excited to work together, get to know each other. We're a very family based and family oriented. So it was nice with this acquisition that when the two of us came together, we were just like one giant family.

Tracey Velt:

Tell me what was a lesson learned from this? Was there something that maybe didn't go as you expected, but turned out okay. Because you kind of learned a lesson from it and pivoted to make it work.

Jennette Phillips:

Well we started the talks for this right before COVID hit. So we were planning to get going in March and then we ran into the COVID door and they shut LA down for a couple of months.

So we had to kind of push everything back. So in that time it was nice because I was able to put a little bit more planning into place. I think the biggest thing is just when you're remodeling an office. What we did was we moved from our location into their location. It's just a nice, a bigger spot and nothing happens perfectly.

Tracey Velt:

Right.

Jennette Phillips:

Trends don't come in on time, signs don't come in on time. So it's just being okay with that and just kind of knowing that there's going to be some hiccups along the way, and just making sure that you let everybody know what's going on in the moment. So that there's no surprises for the agents, because lots of people they don't like change. So you've got to just keep them abreast of what's going on.

Tracey Velt:

What do you think is key? Have you been able to retain a good portion of those agents and what do you think is key to keeping them?

Jennette Phillips:

Yeah, our retention level is pretty high here. I think the most important part is really kind of getting ahead of the game and kind of just knowing what their needs are ahead of time, so that you're giving them those needs when it comes.

Tracey Velt:

Did you speak to each of them separately? I mean, how did you determine that?

Jennette Phillips:

Yeah, so what I did was I sat down with everybody one-on-one as many as I could, unfortunately it was during the COVID time. So we couldn't have any giant meetings. We couldn't do any huge announcements.

I was able to sit down individually with probably about 60% of the agents that we were bringing in to just kind of go over what their needs were, what their wants are, what they didn't like about their company, what they did like the most and what I can do to support them in the transition.

Jennette Phillips:

And that was probably the most important part was just kind of getting to know them. We're not... What's the word I'm looking for. I don't run it like commercial base. We're very family oriented. We're very, hands-on. I mean, I can tell you the name of every one of my agents kids.

Tracey Velt:

Okay. Which is great.

Jennette Phillips:

So it's important to really know the people that you're working with so that they it's the culture that we bring.

Tracey Velt:

Yeah. And one of Steve Murray famous sayings is if you think your agents get to know them even better and relationships are everything. And especially in recruiting. And that's what I want to talk to both of you about. We'll start with Tracy. Tell me a little bit about your recruiting program and with retention program.

Tracy Hutton:

Well, I think if we're all honest, the number one concern of every brokerage is how do you recruit the best and then make sure that you're retaining and helping agents grow. Right? Or else you can bring them in the front door and they can go out the back door. I believe that and I'll share this with every single one of our sales managers or the members of our growth team, that when you are recruiting experienced agents, there's a tremendous amount of responsibility that goes along with it.

And it is just not about getting someone to say yes, and pick up their business and move it over to your brokerage. You have to dig deep and make sure that the move makes sense for them. And that you can either help drive simplicity and efficiency and support into their business where they're not getting it, which allows them to either be better balanced or to focus on other areas of their business or the servicing of their customers.

Tracy Hutton:

Or you have to be able to show them how you can help them make more money and making more money is not just always about, hey, the better commission splits, the better plans, it's about can we help this agent grow. Be a better agent tomorrow than they are today? So we take it seriously. And you know what? There are a lot of agents that we say no to, and it's not that no because maybe they don't fit our culture, but also it's no, can we help them get to where they want to go? And so it does go with a great amount of responsibility.

Also, with new agent recruiting, we've always been known as a great training ground. I think Century 21 in general has been known as a great place to start your career. And so I look around at a lot of our top producers and a lot of them have been with us since the day they got their real estate license and we do a great job of encouraging people to get into this business.

Tracy Hutton:

The industry does. Right? Come on you can make a lot of money in real estate, but we know that the top performers are the ones that are constantly developing their skills and evolving as agents. We have to make sure that we're able to help them develop those skills. So we take recruiting extremely serious along with retention.

We're more goal oriented. We measure everything. Sometimes I'm accused of measuring things too much, but when you know the numbers, you know the goals you're hitting or not, you know how to sit back and adjust where needed.

Tracey Velt:

What are you using to measure those?

Tracy Hutton:

Per person productivity? We have new initiatives that are kicking off. How long does it take for new agents that join our company to get a transaction under their belt. We know that quicker agents can do transactions and work with the client, the more likely they are to stay in the business.

People used to tell agents, "Hey, you know what be prepared. It could take you six months to do a transaction." That's not a good message to send. Right? How do we get people up, productive and producing so they can have long-term sustainable careers. So we measure per person productivity at all levels every month.

Tracey Velt:

What program are you... I guess I meant what program are you using for that? Like technology.

Tracy Hutton:

Wait, when we have our own back office system that we use. So in Century 21 provides Century 21 Union Realty provides a dash platform, which is a robust reporting system with on-time reporting.

Tracey Velt:

Okay. And Greg, do you want to speak to that a little bit about measuring your productivity?

Greg Sexton:

Yeah. In fact, one of the things that I wanted to mention along those lines of making sure that the agents can grow. Just yesterday, we finalized some of our numbers on the training that Tracy's talking about is can we take an agent from another company, bring them into our culture, our company, and grow their business? In the study that we missed what we found is those agents that didn't engage in the Century 21 training and Tracy's company is very, very diligent about making sure that the agents are trained.

Those agents that take the train are receiving 21% more listings than those agents that don't take training. They just kind of do their business but do not engage in training. And also we found that those agents engaging in training are 22% more unclone as opposed to those ages to go to training.

Greg Sexton:

So I think that's part of that story that I mentioned before when it comes to recruiting anyone from a retention perspective. But when you think about recruiting, if you can really paint that picture when you're talking to agents about joining your company and being able to show them, "Hey, if you come to work at our company, this is the type of production that you can increase on it."

And Tracy talks about per person productivity. We absolutely stay laser focused on that. We believe that our job is to make sure that every agent does more transactions. That should be our goal as a franchise owner. And it should be a goal of your listeners on here is as they manage their agents. How do I help to do one more transaction? And that's kind of just how we zero it down when we do our training.

Tracey Velt:

Okay, great. And Jeanette let's, I want to talk to you a little bit about your recruiting and retention program. It sounds like you're very relationship oriented as well. So tell me a little bit about what you're doing.

Jennette Phillips:

Yeah. To piggyback a little bit off of what Greg said. We've really built a culture around enabling agents to succeed at a higher rate than the national average. And then in turn, our reputation around town has been this is the place where I want to work. That's the place where I want to be. What are they doing there that's different? That's allowing so much higher than other agents in the area. So that's kind of been our biggest recruiting program.

Tracey Velt:

Okay. Tell me about your retention program. What are you doing to keep those relationships going? Do you have any special events or training or anything that you're doing?

Jennette Phillips:

So we do coaching with all of our agents. That's kind of what separates us in our area from everyone else. One-on-one, I've got a full-time manager, productivity manager as well, and they handle the coaching with the agents. So it's one-on-one, once a week and they get a half hour. So they're really in tune with what that agent's doing, what they've been producing the previous week, what they're doing the next week. It also kind of keeps us on track with where they're going and where they're at.

And then it just really getting to know your agents, seeing the expectations of what they want before they even see the expectations that they have. So that you're ahead of the game. So that I know ahead of time already, oh this person is upset about this, or they might be thinking of leaving, let me sit down and talk to them or how can I fix something? I think in our merge, we took on 170 additional agents and we only lost three.

Tracey Velt:

My next question, I want to stay with Jeanette and talk about your aha moment. Was there a moment when you realized you needed to change the way you or your brokerage is doing things in order to scale and grow or get creative with your business plan? What would that aha moment be for you?

Jennette Phillips:

So my aha moment was when my dad passed away. They have that saying, if you always do what you've always done, you'll always get what you've always got. We've always had a strong, successful company. When he passed away it was like people coming in like vultures calling. She can't do it.

They're not going to make it. You need to come work for me. So my aha moment was no we're going to grow. I'm going to take over and I'm going to take you out. That was kind of my aha moment.

Tracey Velt:

That's great.

Tracy Hutton:

I love it.

Tracey Velt:

So, Tracy, what about you? What was your aha moment in business?

Tracy Hutton:

I would tell you I have aha moments all the time. I think one of the biggest aha moments, so was when you start scaling your brokerage and you go from one office to two offices, to four offices, to eight offices. How you continue to carry out your vision through other leaders and how you have to constantly be focused on developing, not just agents, you've got to be developing a leadership team and the leaders with them.

So that was the biggest challenge. You can run yourself, ragged, opening, and scaling your business. If you're just focused on opening other offices and attracting agents. I knew, "Hey, I better figure out how to continue to grow as a leader myself but also how do I pour that into the future leaders of our organization?"

Tracey Velt:

Yeah, definitely. Greg, tell me a little bit about your aha moment in leadership.

Greg Sexton:

I will tell you, Tracey, what has been remarkable to me from an aha moment is really where we are today. If we go back to March, the fact that we have actually grown the real estate transactions across the country, like we have, and we've seen the industry really not rebound, but just skyrocket. That's a bit of an aha moment that I don't think any of us would have thought as we sit here in November now, if we had looked back to March.

So that's been great. I think that when we look at that, it allows us to look at opportunities. And what I mean by opportunities is I think it's important for all of the brokers that are listening and thinking about their growth and their marketplace to consider there are people probably in your market now that are looking for an exit strategy.

Greg Sexton:

And you mentioned Tracy, to be they call them how you all are doing many evaluations right now. We're seeing the same thing. So I think a lot of this, the great learning that we have is right now is a great time to start the conversations with those in your marketplace.

They might be considering an extra strategy now, or maybe in the near future, because I believe that we're in a very unique business and the worst place to be is kind of in that mid size range. I think you either got a plan to really grow and get really big or really, really small. Maybe even boutique size. And that's okay if that's what you desire to be as boutique size. It's fine. But being in that middle area, very, very difficult to be.

Greg Sexton:

I think that the reason why is one of the main drivers for that is technology costs and what the agents need and what the consumer needs now it's constantly changing. And so in order to be able to sustain and be able to be relevant in your marketplace, I believe you've got to get big.

And one of the great ways of doing that is through M&As and through the recruitment that Tracy has done, where you stay focused on that. But what I love about our business is there are constantly opportunities to grow, but it just takes starting that conversation. I think that it will lead to grow for many of your listeners.

Tracey Velt:

Yeah, definitely.

Tracey Velt:

Now let's take a quick break to hear some exciting news from REAL Trends and our sponsors.

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Tracey Velt:

Now back to our podcast.

Tracey Velt:

All right. My final question is really, if you could offer other brokers advice when growing their businesses, what would it be? We'll start with Jeanette on that.

Jennette Phillips:

It's going to sound cliche, but just be relentless. I mean, you've really got to anticipate the needs of the people around you and see what their expectations are from your staff and your agents just before it happens. So that you're ahead of the game and you hold onto that retention. You've got to get out there. You've got to talk to people and don't be afraid to fail because with failure there's growth.

Tracey Velt:

Yeah, definitely. I love how you got that relentless in there too. So Tracy, tell me what advice do you have for other brokers wanting to grow their business?

Tracy Hutton:

Well I think the number one most important thing is you have to have unbelievable relationships, not only within your own brokerage, but you have to have them with your competitors. And I tell our agents all the time, how you serve your clients is super important, but how you facilitate transactions with cooperating brokers in the marketplace is a relationship that's never going to go away.

I feel that same way on the brokerage side. I have tremendous respect for the competitors in our market, even though we have different business practices, we have different business models. I respect what they're doing. I can learn a lot from them, whether they're larger than us or smaller than us or newer into the business. And those relationships pay off longterm.

Tracy Hutton:

If you have someone that's looking to exit the business, it provides... You might come top of mind if someone that they want to do business with because of how you've worked with them, whether it's transactions that may have not gone great with agents within your company or how you've served your industry. You've got to stay focused on the relationship side of the business.

Tracey Velt:

Yeah. So important. I mean, especially with the pandemic and unrest right now. Just letting people know you're there for them is so important right now. Definitely. Greg, I'm going to let you get the last word. What advice do you have for brokers wanting to grow their businesses?

Jennette Phillips:

I think it goes back to the comment I made a minute ago, and that is growth is not optional. I truly believe that if you're going to stay relevant in this industry and you've got to grow. What the advice would be is to constantly be looking around, holding yourself and your management team accountable, to knowing what's going on in your marketplace, to see where you can expand your business.

The great thing about growth in our industry. You can come in multiple ways, mergers and acquisitions, recruiting per person productivity, helping your agents to are more and more transactions. That's the fun part about our industry, but you have to stay focused on it from a leader and from managing the leaders of your company. And if you will focus on that, you will see that you can generate those conversations that will bring opportunities to your doorstep. That's what makes the whole growth aspect of our business fun.

Tracey Velt:

Well, thank you three for joining me. This has been very educational and a great discussion. So I appreciate you taking the time to speak with REAL Trends and great job.

Jennette Phillips:

Thanks, Tracey.

Greg Sexton:

Thanks for having us Tracey.

Tracy Hutton:

Thanks, Tracey.

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