Realty Times - Establishing Strategic Relationships To Grow The One-Stop-Shop Concept

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Establishing Strategic Relationships To Grow The One-Stop-Shop Concept

by Ed Krafchow

Engaging in strategic alliances with ancillary businesses can be a prudent way to expand a broker's business, both vertically and horizontally. However, choosing alliances that will support your organization's vision and culture are imperative to lasting autonomy and sustained growth.

I have learned this first hand over the years, adding and sometimes dismantling my fair share of strategic alliances.

I won't go through the permutations that have gotten me to the place where I am now confident in the formula to finding the right strategic alliances; rather, I hope to share some insights that will help keep this industry alive, vibrant and progressively evolving for the broker, the agent, and ultimately the consumer.

When choosing business strategic alliances, top criteria should include:

The strength of their brand and the strength of yours – are they good for each other?

The company's footprint – does it match yours or will it end up kicking you in the head?

The people – do they share a common culture, work ethic and values?

Willingness to be flexible – no two businesses will fit together seamlessly. There will be learning curves and adaptation.

Ability and willingness to support growth – isn't growth the reason for the relationship? The two companies must simultaneously support this mutual goal.

In painstakingly following this criterion, Prudential California Realty (PCR) found an ideal partner for providing expanded financial services in JP Morgan Chase. Solidifying the alliance and forming THEHOMELOANGROUP, A CHASE affiliate, has allowed PCR and CHASE to mutually support each other in growth and the pursuit of market share. The entire process, from issuing the Request for Proposal (RFP) to 10 potential partners, to the launch of the new operation on September 29, 2003, was done in a blistering 10 months.

What did we learn from the process that I can now share with you?

Use the RFP/RFI (Request for Information) process. This allows brokers to formalize their approach, especially when dealing with large entities where things can get complex. The RFP gives you control of the process, allows you to clearly state your expectations, and gives potential suitors questions to which they can provide meaningful responses.

Brokers cannot underestimate the value they bring to supply chain. We touch thousands of consumers during one of the largest single purchases they will ever make. Seek to engage only those strategic alliances which bring similar value in ways you could not significantly achieve on your own.

There is a great danger to over guarding your "territory" rather than open-mindedly exploring new ones. Case in Point: the myth that banks want to buy the real estate business. More accurately, real estate and banking are logical partners, and together, can provide a one-stop-shop benefit that will service them both well into the future.

Consolidation is the prominent trend in the real estate business. To guard from becoming acquired or obsolete, brokers must shore up their assets, expand their businesses, and provide more avenues of value for the consumer.

Think in terms of five, 10, 20 years from now. The business of real estate will evolve. Will you evolve with it?

Ed Krafchow is President of the tri-state consortium of Prudential California Realty (PCR), Prudential Nevada Realty (PNR) and Prudential Texas Properties (PTP). A dynamic leader, Krafchow is known for his personal commitment to agent training, motivation and inspiration, and for integrating technology into daily operations. Krafchow has quadrupled the company's transactions and sales volume in the past 10 years to more than $10 billion in annual sales volume, ranking the company 8th in the nation for sales. A frequent national speaker on several industry-related topics and a former lecturer at UCLA and UC Berkeley, Krafchow has been identified by the California Association of Realtors as one of California's top brokers and recognized as a technological leader by the Employee Relocation Council.

Published: January 7, 2004

Use of this article without permission is a violation of federal copyright laws.

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