REAL Trends spoke with Ryan Gorman, CEO of Coldwell Banker about his new role and upcoming trends.
Tracey Velt: Thanks for speaking with REAL Trends. Let’s start the interview with a little bit about your new dual role as CEO of both Coldwell Banker’s company-owned firms (NRT) and Coldwell Banker. How do you plan to bridge the gap between them?
Ryan Gorman: Fortunately, we have the thesis that the two groups can mutually benefit and as soon as we started testing that thesis by announcing the plan and working with affiliates and owned brokerage leaders, it proved itself really rapidly. We've already started the common learning, accelerating the learning that was taking place, surfacing some common opportunities and coming up with common ways to solve those. The teams working together are getting a ton of energy out of it.
Tracey Velt: Okay, great. So why don't we talk about some of the initiatives for 2020 that you have for Coldwell Banker going forward? Some of the growth initiatives.
Ryan Gorman: Sure. 2020 is going to be all about execution and improvement. We delivered an enormous payload of products and services and rapid change in 2019, so in 2020 we're going to be focused on the success of our agents through deep engagement with everything that we have rolled out. It's truly all going to be about results. The statement we're using internally is that we're focused on delivering on our promises.
Tracey Velt: Tell me a bit about what some of those promises are. I know you've been rolling out quite a bit of technology through Realogy, so tell me a little bit about that.
Ryan Gorman: Sure. A lot of what we've offered is not purely technology but rather technology married with service. For example, listing concierge is a product that we’ve rolled out to not just automate but also augment the listing marketing activities of agents on the owned brokerage side, and we'll be dipping our toe into the affiliate side of that as well in the near term.
Tracey Velt: That us into some of your ideas about where the industry is heading in 2020. One of the things that you had mentioned was a return to realism. Obviously. technology is something that used to differentiate brokerages, but everybody will eventually catch up to each other. It sounds to me like your return to realism is a little bit about that. So tell me a little bit about that.
Ryan Gorman: I think it's already starting to show up in general. I think consumers, agents and even people outside of our industry, are tired of unfulfilled promises of pseudo tech companies. I think the debunking of that “WeWork” alternative reality feels like a bit of a tipping point.
Consumers and industry professionals are refocusing on what matters, and it turns out, that what matters today looks a lot like what has always mattered in terms of expertise, experience and follow-through, execution, and sustainability—sustainable business models. I think this coming year, both consumers and agents are going to look much harder at anyone who's trying to turn their head, sort of that siren song of too good to be true. I think everyone's going to be much more skeptical of that now. We're all looking at the offers we receive from vendors or other companies and we're checking references and asking others if they've seen the promised results.
Tracey Velt: Tell me a little bit about that. I mean, everybody uses the phrase “back to basics,” but it is a back to basics moment in real estate. So yes, I would love to hear a little bit more about your thoughts on that.
Ryan Gorman: I completely agree. I've been using some cheeky phrases internally based upon the promises that we all heard, you'd think by now, robots are folding our laundry and artificial intelligence is convincing kids to clean their rooms and these things are just not happening. It turns out that good technology can make good work a little bit more efficient, which is terrific. But it still comes back to a return to quality, and that's quality across the board. From a consumer perspective, it's quality in terms of commute time, family-friendly neighborhoods, everyone moving to tiny home communities like what it looks like on TV. The quality of the space of the homes, slightly more modest yet increasingly functional, and home size and layouts that work for families.
The quality of advisers in the home buying and selling process—those who actually have experience in all kinds of markets and know the inventory really well and the markets they serve. When it comes to agents serving their clients, it comes back to having authentic relationships, following up in a genuine way. Leveraging technology that helps them be able to stay connected to those who have a mutual desire to stay connected so that they can serve them down the road.
Tracey Velt: Right. Definitely. That brings us to the next trend, which is you talked about a prediction of the industry kind of splitting in two. So, talk to me about what you call the industry bifurcation of full-service brokerages versus the skinny bundle brokerages.
Ryan Gorman: Sure. I think competition in the sector is already becoming somewhat bifurcated with, for instance, new market entrants, having to choose between that discount pricing approach or a premium offering. At the top of any cycle, you have a few folks who come in and promise to offer both, which is a recipe for massive losses and requires some level of magic to actually deliver. But I think the bifurcation will continue. I believe discounters will continue to be part of the market and consumers and agents alike, are going to have to decide whether they want that DIY model or that “do for me” model. But I think some players who have real scale and savvy, they'll be able to communicate their value. Those who focus on value rather than price, they'll be able to communicate their value to offer it in a way that makes it clear that it's maybe a bit of a false choice between price and value. Agents and consumers will be able to get the value they deserve in a full-service model.
I think communicating value is way harder than communicating the price, which is why that bifurcation becomes deeper with those discounters, but I think those who nail that communication, I think it really pays off. It pays off for the service provider and I think it pays off for those who are listening closely enough to be able to differentiate value from price and receive that full value in their service. So I think there's a real place for that value. But I do think it's harder and harder to cut through the noise with the communication of it.
Tracey Velt: Yeah, definitely. So what do you see as some other trends going into 2020 for brokerages specifically?
Ryan Gorman: I think those who succeed in 2020 will be very aware of who they want to be. For instance, in the Steve Murray version, they will have decided between pursuing scale or pursuing a niche, and they'll have decided between premium or discount status, and have already aligned their entire organization to very efficiently pursue that goal. Candidly, I don't think that describes most brokerages. I think it will be increasingly difficult, especially for smaller brokerages where leadership or ownership doesn’t have true clarity about who they're trying to be and the market that they're trying to pursue.
Tracey Velt: Okay, great. Anything else that you can think of that would be useful for brokers, or trends that they should be aware of?
Ryan Gorman: It might feel like a little bit of reiteration, but if you look at the top agents, year after year on any list, in any market, there's relatively little change in those lists. That’s not because there aren’t great agents coming into the business, but because what works tends to work across market cycles, and market segments. The best obviously invest in themselves to evolve, but they consistently follow up. They deliver great service, they prioritize excellence and ethics over any individual transaction. For every agent out there and every broker out there, I think there's a lot of lessons to be learned in that. Having our heads turned by shiny objects is natural for humans. But now more than ever, we really need to be focused on having a sustainable advantage—whom we choose to partner, what flag we choose to fly, and how we choose to invest every hour of our day.
Tracey Velt: Great. Thank you so much for talking to REAL Trends today.
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