You had me at "But the client remained with Staubach". Perhaps not a100% refund, but maybe a sliding scale of some sort up to say 75%. This could be a transitional way of getting to the 100% refund. I also think that there is a fair amount of truth that (some of) the residential clients would routinely screw over their trusted advisors...residential real estate is personal, commercial is business and a commerical client would present a diffent mindset and a different decision making process that is less emotional, IMHO. Great thought piece, Rob. Thanks for keeping my grey matter active.
It's no surprise that the captain of "America's Team" brought his clean and wholesome image from the field to the boardroom. My takeaway from your paper is not what you said but didn't say. The proposition made to Staubach's clients is clear, but without the word "value" it makes it harder to correlate the commercial business to residential. I assume a lot of work goes into a commercial transaction, most of it centered around math, income and expense forecasts etc. - a big job. IMO, the "value" component is at the core of this whole residential mess. On the sell-side the four P's comes to mind; put an ad in the paper, put a sign in the ground, put it in the MLS and pray (not an uncommon sales strategy for many agents). The buy-side is really where it gets tricky. As mentioned in a previous comment, the Internet changed the game - completely. How many buyers come equipped to a showing with all the numbers; taxes, room dimensions, historical sales data etc. etc.? Are these buyers now simply needing to "get in" to smell and see if the pictures online mimic reality. So, I think the valley for this comparison is pretty darn big. After all is said and done, IMHO, it seems like at the end of this adjustment it will be a battle of fees (commissions) - the value proposition for work done. It could get very ugly. I know if I was 20 or 30 years younger I would be launching a residential business catering to buyers, and yes, it would be modeled very much like how lawyers conduct their business and how they are paid. It seems pretty clear to me....but I've been wrong many (many) times before. Thanks, Brian
Rob's idea is a good conversation starter (proof is in your/our replies) but DOA in the real world. How many Billions (not millions) would have to be spent in order to create a brand as suggested? Ask a VC if they'd invest in this idea. Wait. Don't. You already know the answer.
Also, how easy would it be to come up with an objection handling technique to win the listing from the guy who's willing to give away his commission if things aren't 'satisfactory'? Pretty easy.
In a rare move I'm replying to my own comment. I was feeling guilty and wanted to explain. I don't want you to feel I was being antagonistic. FWIW, most of what I do has something to do with the time I spent at a financial firm called Kidder Peabody & Co. Kidder was a Wall Street firm and GE subsidiary. Many of my business ventures, understandings and thoughts have been the result of that experience. I believe the similarities between the real estate industry and financial industry (at least from back in the 80's, early 90's) is extraordinary - IMO, the real estate industry is the laggard with the financial industry foretelling real estate's story. I feel I have seen some of this movie before. Back in the day, the financial brokerages had two divisions on the sales side, an institutional (B2B, "commercial") and retail (B2C, "residential"). They were so different in their business practices that Kidder actually separated them by floors. The institutional salespeople were generally the smarter MBAs and the retail guys (and gals) had the bachelor degrees and their suits weren't quite as nice. The pay structure was different, the business was different, the customers were different. I see the same differences here. I'm not so sure the culture of the residential agent could even consider the proposition Roger was able to achieve for his commercial operation - at least not yet. We'll see. Thanks for the space - I feel better now! :) Thanks again, Brian
Previous generations embraced the mantra 'The Customer is Always Right,' encouraging businesses to prioritize understanding and meeting customer needs. Over time, however, this principle has morphed into an unrealistic expectation to satisfy every customer demand, regardless of how unreasonable.
Residential real estate transactions are inherently stressful, infrequent for most clients, and require coordination among many parties. Disappointments sometimes arise when client expectations don’t align with market realities.
While this standard might work in commercial settings, where relationships are built over years and reputations are essential, it doesn’t translate as well to residential real estate.
That said, every good agent I know is dedicated—often to a fault—to their clients' satisfaction, as the market already incentivizes it. Most successful agents rely on referrals from past clients to build their business, which requires consistently high standards. The real issue arises with agents who enter the field briefly, do subpar work, and leave, often damaging the reputation of the industry as they exit.
I don't know -- didn't read the lawsuit itself. But the point is that in the 31 year history of Staubach, only two clients ever triggered that clause. That's worth considering.
Nice in theory. Not practical in reality. This might have worked pre-internet, but certainly not today. Creating a brand with a USP of 'satisfaction or don't pay' is just a...bad idea.
Before the Internet, *companies* were promoted, not individual agents. A company could position themselves to match their branding.
Once the internet took off, it changed to agents. Back in the day, a home seller would hire a real estate COMPANY. Now less than 4% of home sellers hire a company.
It would be almost impossible for a RE company to create a brand as Rob has suggested. Agents don't promote their company...they promote themselves.
Besides 'above the crowd' (possibly), name another real estate company that stands out from their marketing and branding.
Lol...yeah. Maybe. Once a company creates a widget (differentiated branding), only one of two things will happen. 1) that company gets all the business or, 2) other companies copy the branding and it's an equal playing field again.
In theory, it sounds good...but the math and psychology are against it.
It's better to create a company that KEEPS 90% of the commission AFTER paying the agent and the bills. The math and psychology fit much better.
There a replay of Colorado from yesterday? I have 25 appointments this week and wasn't able to attend.
Thank you. I understand your point. I do agreee that consumers associate their REALTOR not as working for C21, for example, but the individual themselves and would follow them(assuming they like them) to whichever broker they work for. But to Rob's point below, doing something like this satisfaction guarantee could change that dynamic over time.
You had me at "But the client remained with Staubach". Perhaps not a100% refund, but maybe a sliding scale of some sort up to say 75%. This could be a transitional way of getting to the 100% refund. I also think that there is a fair amount of truth that (some of) the residential clients would routinely screw over their trusted advisors...residential real estate is personal, commercial is business and a commerical client would present a diffent mindset and a different decision making process that is less emotional, IMHO. Great thought piece, Rob. Thanks for keeping my grey matter active.
Hey ROB,
It's no surprise that the captain of "America's Team" brought his clean and wholesome image from the field to the boardroom. My takeaway from your paper is not what you said but didn't say. The proposition made to Staubach's clients is clear, but without the word "value" it makes it harder to correlate the commercial business to residential. I assume a lot of work goes into a commercial transaction, most of it centered around math, income and expense forecasts etc. - a big job. IMO, the "value" component is at the core of this whole residential mess. On the sell-side the four P's comes to mind; put an ad in the paper, put a sign in the ground, put it in the MLS and pray (not an uncommon sales strategy for many agents). The buy-side is really where it gets tricky. As mentioned in a previous comment, the Internet changed the game - completely. How many buyers come equipped to a showing with all the numbers; taxes, room dimensions, historical sales data etc. etc.? Are these buyers now simply needing to "get in" to smell and see if the pictures online mimic reality. So, I think the valley for this comparison is pretty darn big. After all is said and done, IMHO, it seems like at the end of this adjustment it will be a battle of fees (commissions) - the value proposition for work done. It could get very ugly. I know if I was 20 or 30 years younger I would be launching a residential business catering to buyers, and yes, it would be modeled very much like how lawyers conduct their business and how they are paid. It seems pretty clear to me....but I've been wrong many (many) times before. Thanks, Brian
Rob's idea is a good conversation starter (proof is in your/our replies) but DOA in the real world. How many Billions (not millions) would have to be spent in order to create a brand as suggested? Ask a VC if they'd invest in this idea. Wait. Don't. You already know the answer.
Also, how easy would it be to come up with an objection handling technique to win the listing from the guy who's willing to give away his commission if things aren't 'satisfactory'? Pretty easy.
Hey ROB,
In a rare move I'm replying to my own comment. I was feeling guilty and wanted to explain. I don't want you to feel I was being antagonistic. FWIW, most of what I do has something to do with the time I spent at a financial firm called Kidder Peabody & Co. Kidder was a Wall Street firm and GE subsidiary. Many of my business ventures, understandings and thoughts have been the result of that experience. I believe the similarities between the real estate industry and financial industry (at least from back in the 80's, early 90's) is extraordinary - IMO, the real estate industry is the laggard with the financial industry foretelling real estate's story. I feel I have seen some of this movie before. Back in the day, the financial brokerages had two divisions on the sales side, an institutional (B2B, "commercial") and retail (B2C, "residential"). They were so different in their business practices that Kidder actually separated them by floors. The institutional salespeople were generally the smarter MBAs and the retail guys (and gals) had the bachelor degrees and their suits weren't quite as nice. The pay structure was different, the business was different, the customers were different. I see the same differences here. I'm not so sure the culture of the residential agent could even consider the proposition Roger was able to achieve for his commercial operation - at least not yet. We'll see. Thanks for the space - I feel better now! :) Thanks again, Brian
Previous generations embraced the mantra 'The Customer is Always Right,' encouraging businesses to prioritize understanding and meeting customer needs. Over time, however, this principle has morphed into an unrealistic expectation to satisfy every customer demand, regardless of how unreasonable.
Residential real estate transactions are inherently stressful, infrequent for most clients, and require coordination among many parties. Disappointments sometimes arise when client expectations don’t align with market realities.
While this standard might work in commercial settings, where relationships are built over years and reputations are essential, it doesn’t translate as well to residential real estate.
That said, every good agent I know is dedicated—often to a fault—to their clients' satisfaction, as the market already incentivizes it. Most successful agents rely on referrals from past clients to build their business, which requires consistently high standards. The real issue arises with agents who enter the field briefly, do subpar work, and leave, often damaging the reputation of the industry as they exit.
You may very well be right!
Only the marketplace can tell us whether a satisfaction guarantee leads to better results for the brokerage or not. No risk, no reward.
“Be so good they can’t ignore you” - Steve Martin
So, the client had to sue Staubach to enforce the guarantee? Why did they wind up in court?
I don't know -- didn't read the lawsuit itself. But the point is that in the 31 year history of Staubach, only two clients ever triggered that clause. That's worth considering.
Nice in theory. Not practical in reality. This might have worked pre-internet, but certainly not today. Creating a brand with a USP of 'satisfaction or don't pay' is just a...bad idea.
You lost me regarding your comment about pre-internet. Can you explain, please?
Before the Internet, *companies* were promoted, not individual agents. A company could position themselves to match their branding.
Once the internet took off, it changed to agents. Back in the day, a home seller would hire a real estate COMPANY. Now less than 4% of home sellers hire a company.
It would be almost impossible for a RE company to create a brand as Rob has suggested. Agents don't promote their company...they promote themselves.
Besides 'above the crowd' (possibly), name another real estate company that stands out from their marketing and branding.
Maybe that’s because companies don’t have actual differentiation like a satisfaction guarantee?
Lol...yeah. Maybe. Once a company creates a widget (differentiated branding), only one of two things will happen. 1) that company gets all the business or, 2) other companies copy the branding and it's an equal playing field again.
In theory, it sounds good...but the math and psychology are against it.
It's better to create a company that KEEPS 90% of the commission AFTER paying the agent and the bills. The math and psychology fit much better.
There a replay of Colorado from yesterday? I have 25 appointments this week and wasn't able to attend.
Thank you. I understand your point. I do agreee that consumers associate their REALTOR not as working for C21, for example, but the individual themselves and would follow them(assuming they like them) to whichever broker they work for. But to Rob's point below, doing something like this satisfaction guarantee could change that dynamic over time.