Does a Relocation Director still serve a purpose in this new world?
As lead generation becomes automated, agents are given more ways to refer directly to one another, and budgets tighten, the role the Relocation Director and their staff play may come into question. As brokers look to trim expenses, they often look at salaries first. If a department's business is down 20%, a broker may question whether they could maintain the existing business with fewer staff to save money. Relocation Directors had better be prepared to justify their existence.
In the past, relationships with relocation companies were established, and the relocation department sat back and managed those referrals as they poured in. Networks and their brands fed the brokerage's incoming broker-to-broker referrals. There was not a huge amount of business development being done. Relationship building, yes. Business development, no. These are two very different things.
Things are changing. Internet leads have taken a lot of business that was formerly generated by agent referrals. Lump sum programs have allowed the transferees to just wing and find their own brokers and service providers. RMCs business is down significantly as corporations continue to allow remote work and tighten budgets. It doesn’t appear that business will return to its glory days.
Internet leads are often delivered directly to agents without oversight. Continuously improving software to manage referrals trims down the staff time needed to manage them. Lead matching technology to agents based on a variety of metrics has proven to be almost as successful as human intervention.
What value do you bring exactly?
The Relocation department leadership and staff roles should be evolving if you want to remain relevant in your company. Most importantly, you must show your value to leadership and industry partners. We tend just to handle things and move on. Maybe it’s time to let leadership know exactly what a day in your life is like. I was guilty of it during my tenure as a director. I just handled things and made money, but I never really educated leadership on what my intricate role was in a smoothly running department. Therefore, when they laid all of us off, I think the leadership at the corporate headquarters actually thought they would maintain all of that business. As they say, don’t assume anything. Most people don’t know what you do to maintain and grow your department.
Problem solver – You capably smooth the feathers of a flustered top-producing agent who has just been told that they have to pay a 41% referral fee on a client they have sold three houses to. Problem-solving can be a huge time drain. Focus on repeat situations and try to change behavior through education to avoid the same issues over and over again.
Act as a company ambassador on the national stage – Build relationships and maintain sources of business that help your company stand out from the crowd.
Account management – You ensure that one flubbed referral doesn’t cost your company the entire account by doing what it takes to make it right.
Agent Team management—Managing the relocation team isn’t a set-it-and-forget-it affair. It should be a living, breathing thing that adds and removes agents based on performance and skill set.
Fiscal responsibility – Most departments aren’t run as a non-profit and certainly not as a cost center. Determining where to spend the budget is critical. Will an RMC event glean the most reward or an industry conference? The demand for an RD's presence is high, and you could literally attend one out-of-town event a month if the budget allowed. You must continue to navigate the rising referral fee situation to ensure profitability.
Local expertise – The power of the local broker is becoming more relevant. As some of the large national brokerages operate with big service centers, remote workers, and a small local presence, brokers who live and work in their market have an opportunity to show why local matters. Your local expertise is your superpower. You are entrenched in your community and can build face-to-face relationships with potential sources of business, such as affinity accounts.
Support leadership – You assist with recruiting and retention by running a thriving department. The revenue offsets non-revenue-producing departments. The service you provide helps agents make more money and creates value-added services to support your brokerage.
Streamline the processes – RMCs are short-staffed too. They don’t have time to wrangle thousands of individual agents. Your ability to funnel referrals and oversee the referral process, ensure the updates are done, transactions are compliant, and referral fees are paid is a very valuable benefit. The system can spit out updates, but when no one responds, it takes a human to determine the path forward for that referral.
So, what would the world look like without Relocation Directors?
Chaos. Even though the business is evolving, it is still a people business that needs to have human oversight. RDs set the tone for the way the relocation business and the department are perceived internally and externally. They drive the mission and the vision. Automation and AI can only do so much. It can’t problem-solve and build relationships. While building relationships is critical in our business, you must have the services and performance to back it up. It’s great that your contact ‘likes’ your Facebook photos of your dog, but are you sure that will translate to business? That stuff is good for maintaining the business you have, but it takes a much bigger strategy to build the business.
What RDs need to also take on by looking for ways to:
Create new avenues of revenue outside of the traditional sources – Get out of your comfort zone and start doing some local biz dev. There are so many small and medium-sized companies or organizations that do a few relocations a year or have a ton of local employees or members perfect for a rewards program.
Be more efficient – Repurpose some of your staff to focus on working with the agents to generate more out-of-area referrals or to increase your conversion rates. Spend less time focused on communication that wastes your time and keep it focused on high-reward outcomes. Use AI to your benefit and help you create communication as needed.
Manage the narrative – Do your clients know what you and your agents do for them? Do they really? As evidenced by the outcome of the most recent commission trial, the real estate industry overall does a really poor job of letting clients know the value we bring. Do you think a corporation has any idea what a nightmare it is every time a preferred referral situation arises? Or how dramatically does it impact your bottom line whenever an RMC raises their referral fee by just 1%? Or when a difficult transferee wants to cancel a listing because they have priced it too high, it won’t sell, and they won’t reduce it? We must do a better job of pulling back the curtain, which means getting the message out to the RMCs and the corporations. Don’t forget to constantly reinforce what you bring to the table to your leadership.
Get out of the weeds and back out into the world – Unsubscribe from emails that don’t move you forward or save them for weekend reading. Say no to requests that may not generate more exposure or revenue opportunities. Automate what you can. Be selective and do things that support your initiatives, not others. Time block and focus on activities that glean results. Talk to your agents and your leaders about your challenges and theirs. Stay visible so they know you are out there working for them. Know your worth and show your worth!
So, what now?
The long-term impact of the lawsuit litigation is still unknown, but there is not likely to be one way that agents will get paid, which means referral fees may also be based on different variables. Without proper consumer education (which takes time), we will be at the consumer's mercy to decide how they want to compensate agents until we settle into a norm. However, corporations can make their own decisions regarding corporate referrals since they are typically footing the bill. Be prepared for everyone to have an opinion. There will be confusion and misinformation. You will be the ones to carefully guide the RMCs and the corporations, along with all industry providers, through the landmine of commission decoupling and what it means in your local market and state. Get ready; it’s your time to shine. Game on!
“Your value doesn’t decrease based on someone else’s inability to see your worth.” ~Zig Ziglar, American motivational speaker, salesman, and author
