The Keller Williams Model – Myth #1

Mudslinging 101 (2014 Update at Bottom)

 

What does a team leader do? Well my role is to train agents on how to overcome the challenges faced in any market. I also consult agents on specific roadblocks to unlocking their greatest potential for example call reluctance, time management or fears of rejection, success or failure (all of which I have to continually evaluate for myself daily). I also am responsible for the growth of our market center in agents, market share and most importantly profits.

 

In my appointments with potential candidates for KW Madison Crossroads, you can imagine I have heard every objection to joining our market center. Typically there are a few that continually resurface. Who do you believe supplies these objections to a KW candidate? Right… a fearful broker! Why do you believe that these objections are supplied…MONEY! Do you believe that a competing broker talks negatively about another company because they fear for YOUR career or because they fear for THEIR bottom line? The converse of that is, as a Team Leader responsible for growth and profits, do you believe it benefits my reputation to bring an agent on and have them be less productive at my firm? Would you say that I would be highly motivated to ensure that they maintain, if not drastically improve their production? So to review, you have a broker that is motivated by money to discourage you from talking with a team leader at KW motivated by helping you become more productive and profitable to meet YOUR goals….does that make sense? I’d like to address the first myth of KW, a myth that comes up quite often and even nationally.

 

Per agent productivity! Maybe at a sales meeting, maybe in a one on one, or maybe in passing you have heard this term. What does it mean? Well it means that you take the total units of an office and divide it by its total number of agents. Of the National real estate franchises, Keller Williams consistently has one of the lowest per agent productivities. I’m very honest and forthright so I’ll just throw that on the table for all to see… KW has one of THE LOWEST per agent productivities in real estate. That could be perceived as a very negative statistic if you didn’t understand that it is an integral piece of our business plan. For example, let’s say XYZ Real Estate has a per agent productivity of 12.3 units and KW has a per agent productivity of 5.9… a competing broker may say that if you join KW you will lose 50% of your production or “Clearly their education doesn’t work our agents close on average 6.4 more units each!” Let’s take a look at our business model to understand this once and for all.

 

Keller Williams has a capping commission structure, meaning that after you close (in our market) $2,400,000 in sales volume you move from a 70/30 split to 100% meaning the commissions you pay into our company has “capped”. This means that agent no longer provides revenue to the market center… do you see how this effects cash flow? Lets say that we had an office of 20 agents of which 20 were “cappers” with the seasonality of our market most of those 20 agents would “cap” by July or August… meaning we have no revenue to run our office in September through December because all of our agents are at 100%. What we then do is find 20 agents whose goals are $1,200,000 in closed volume or a “half capper” to feed those months, and finally 20 agents who do $600,000 or less in closed volume to supplement even further. I just describe our perfect and most profitable business model for a capping commission structure – 1/3 of agents Cappers +, 1/3 of agents ½ cappers and 1/3 of agents ¼ cappers. Does that mean that we are an office of low producers? Tell that to Guy Lofts who has been taking home 100% of his commissions since July of 2008 and will until February 1^st 2009. Tell that to Bill Baker who reached his cap in roughly 60 days and carrying a listing inventory nearing $50,000,000. Tell the Mullikin’s that they are not producers when their entire team capped after 5 months, leaving them at 100% commission for 7 months of the year! Explain to Judy Braund that because of per agent productivity, she is expected to under perform instead of receiving 100% commission checks until July 1^st 2009.

 

What about those that do only close a few transactions per year??? First of all they are in your company as well, I track production so you can’t tell me otherwise. Second, for most that is their goal.. they only want to do six transactions. I can’t put my high production goals on them can I? What I can do is let them know my expectation is that they can do 2 transactions or 200 in our firm and it doesn’t make a lick of difference to me. WHAT IS IMPORTANT is that when they handle the sale or purchase of the largest asset in their clients life, they are trained to a T. All of our agents regardless of production level are required to meet a minimum standard of 1 training course per week as of 08/01/2008. First of all I understand my agents goals and what they need to do to get there, second I support them in achieving them regardless of the number. It is that focus on THEIR goals that has created a loyalty, and community of trust as well as achievement. Have you ever let someone else’s goal determine yours? Probably not! So if you choose to do 100 transactions and Joe Agent chooses to do 4, how does that really effect you?

 

Our opportunity is world class, I can assure you of that. Our business model is unique, one that if run properly can reach profitability never before thought possible in a “Shifted” market. This year we are sharing roughly $38,000,000 in profits back with our agents. The more profit we create the more profit we share, because of that we all have a vested interest in your success. So you can listen to the rumors, buy into the myths, or you can stay in curiosity and profit from the truth. Learn why Keller Williams is the fasting growing real estate franchise in North America. Learn how I will serve you in reaching your goals today and for years to come.

UPDATE 06.2014 – Almost 6 years after drafting this post, kw is #1 in North America, rapidly expanding Internationally and I am still with Keller Williams Realty. If you are considering a career with kw, you owe it to yourself to contact me, find out what has changed since I wrote this and what the future holds. The best IS yet to come and I couldn’t be more excited to see how you may become part of the vision. Visit http://www.PropertyReveal.com or call my cell 561.859.1839.

 

Sincerely,

 

Brett Boettge

Team Leader | CEO

Keller Williams Realty-Madison Crossroads

608.661.7000