Cameron's LIVE Coaching Call with Chantel Ray CEO of Canzel Realty

So make sure that you and the CEO continue to build that space with each other as well to do it and get out of the office and share. And then your job is to shine the spotlight on them internally and make them look good. And their job is to shine the spotlight on you internally and make you look good. I would make sure that for the next 16 months, any tough decisions, any bad decisions, any firing, any reduction of force, any cost cutting, that they're the one who says that and rolls out that messaging to, to buffer you so that you are that shining light and that good energy and that positive energy. All right, Chantal, thank you so much for doing this. Looking forward to working with you today, to coaching you a little bit today. So you agreed to have this recorded and shared on social media, which is a pretty vulnerable place for a CEO to go. Before I get you to do the update, are you normally a fairly vulnerable CEO? Do you normally.

Yes, I am. I'm very vulnerable.

Do you open up with your team as well? Do you open up with like your management team, your frontline staff, or do you stay guarded all. Or are you just pretty open book?

I'm pretty open book. Like, I think I'm almost too open book, but I am very vulnerable. That is like someone doesn't want to follow someone that's perfect. They want to follow someone that's real and that can really share, like, here's where we're going good. Here's where we're struggling. And I think I could probably, one of my biggest things, I could probably sugarcoat things a little bit more than I do. So I am almost a little bit too real sometimes.

Yeah, I'm going to talk about that. I'll go into a couple of little areas and I'll share some experience. Twenty years ago, I had a fairly similar experience where I got pretty open and vulnerable with the team and I received a little bit of feedback. And so I've got some thoughts around where we need to be as a CEO or coo when we're speaking with our teams and then even with our frontline staff and even with our board and then often even with other CEOs. Right. There's almost a weaving or curving line, but we'll get into that in our coaching. So why don't you go ahead and give me the five minute update. What's going well, what's not going well, what you're working on over the next month and any areas that you're stuck, I'm going to write down some notes and then we'll dive in from there.

What's going well is that we are growing, which is good. But what's not going well is that we're getting agents who are maybe not performing to the highest potential that they have. And right now interest rates are really high. So it's just a terrible time to be in real estate. If there's any worse time, this is like the pit. You know, we've been dealing with interest rates that were at 3% and now they're hovering at 8%. Agents in general are just in the dump. And so it's kind of getting people motivated and being like, rah, rah, rah, and let's go, let's go, let's go. The, the problem is, is that our market has been where you didn't have to work really hard. Business just kind of flocked to you, right? So you lost all of the things that you should have been doing this whole time. You're not doing all these different things that you would have normally done. Like agents were used to doing cold calling and all the things that they were in the habit of doing. Now when things were hot, business just came through the door and they lost their kind of get up and go. And that's really what's happening. And motivating people to keep going is, is a problem.

When we've had 13 years of that, right? Since the 0809 global financial market and the housing crash in 0809, it started to kind of come back around 10, 11. So we've really had 12, 13 years of this rising market where even the worst people could do well, right? What else is going well and what's not going well?

I feel like one of the things that is not going well is just hiring high, high caliber people for recruiting has been a real struggle for us because hiring real estate agents is a really, really hard thing to do. And it's really just like making another phone call, making another phone call and getting rejected. Hiring recruiters to be really top quality has been hard. And we created our model where the agents need to recruit and they're the agents that we have. Just in general, all of our competitors, only about 2% of real estate agents are going to recruit. It's creating that flywheel of getting a high number of agents. That's where we're struggling with right now is getting. Motivating the agents to spend their time to recruit other agents is what we, we ultimately want. It's like they have now money. Like if they get now money on selling a house, they Want to go ahead and do that versus recruiting an agent. It takes time to recruit an agent and so they don't want to spend their time recruiting. So it's finding that balance of us paying a high caliber recruiter versus motivating our agents to want to recruit. And they, a lot of them just say I just want to sell houses

by the way, just for anybody listening as well. Chantelle Ray runs a really strong real estate agency, a real estate brokerage. And you're based, aren't you in Texas?

No, we. Well we're actually in 20 states. So we've made our business basically a cloud based brokerage. We still have the Regis co working spaces so we rent spaces from co working. So what we did originally we were here in Virginia. We opened up seven locations. Then we decided to go to Charlotte, North Carolina and, and I realized if I wanted to grow, there is no way we could just corporately open it up another, find a lease, build it out, you know, make everything look pretty. That was going to be a very slow growth. So what we decided is to do is to make virtual real estate companies. We spent about $2 million on technology. The agent does not need to come in the office at all, but if they want to. Regis has 3,000 locations across, across the country. So what we do is we say if you want to work in an office, you can, but you'll do it at a co working space. Instead of us having to build out these offices every time we wanted to grow and that allowed us to go to. We're now in 20 states.

What are the top three markets for you? If we think about the Pareto principle, what are the top three markets in terms of revenue and then maybe even in terms of the number of agents that you have.

Florida, Texas and Virginia.

And that would be by both. Would it be the number of agents and revenue?

Yes.

How many agents would you have in Florida, Texas and Virginia each?

Several hundred total.

And are you, are you open to disclosing what your revenue and your EBITDA is or do you want to keep any of that under wraps?

Because I don't know it off the top of my head.

Are you profitable?

Yes, we're now getting really profitable because we've cut so many expenses.

How often do the Regis co working spaces get used?

Believe it or not, they don't get used very much at all.

That was my guess.

Actually we have it for people who want to use it, but honestly, almost everyone prefers to work at home.

First off, Regis locations are very much what our parents use now what we use it's they're very much the spaces if you've ever walked into a number of them. They're not the places that gen Y and Gen X, mostly Gen Y. They're not the places that gen Y want to go hang out. What, what are the age of your real estate agents?

Most of them are between the ages of 30 and 50.

That's really crossing between Gen X and Gen Y because I'm the oldest gen X at 57, I'll be 58 this month. The youngest gen X would be around 40 years old and then the youngest, the oldest gen Y would be about 39 maybe, maybe as high as like 40, 41. So that that age group doesn't want to go to Regis. What they want to go to is co location spaces, co working spaces. They want to go to the hipster co working places that are filled with gen y on their MacBooks, drinking lattes, dressed casually with great energy and a cool buzz. If they're going to go work from anywhere, that's where they're going to go. I've been living on the road for the last two little over two years and the last place that I would ever want to go would be a Regis. Even though I would come, it would certainly come to mind very quickly. But what I would be looking for in colocation spaces are the cool modern open glass walls, beanbag chairs, funky little boardroom spaces, cool spaces to make calls with, but filled with a bunch of hipster Gen Y people running their own businesses. Are you on month to month with these reguses or do you just pay up per use with them?

Yeah, we are on month to month for sure. But here's the thing, a lot of the reguses now the ones that we're in, they're actually really nice. Like we have a couple places we know it's called Gather. It's really fun and like that. But believe it or not, some of these regus have really scaled up because Regis, they bought something called spaces and they bought something else. So actually they've leveled up the game big time.

So here's what I would recommend though even in terms of cutting some of your opex then is maybe going where you don't have anything on the month to month with any of these reguses and you just have a per use and your, your agents just do a submission and you pay it instead of having them set up as a fixed operating expense. Just tell agents if you ever want to go into a colocation space, Regis or otherwise just send us a monthly bill and we'll pay them. You'll probably.

We have that in certain areas. Certain areas we, because of the licensing we have to have like a small office that we pay because of that, the state law. So like we have states, we have to have some kind of location that we hang the licenses at Sense. But the others that we don't like, we have certain places like Albany, New York. There's no good regis there. So we've done this where you can reimburse. We'll reimburse up to a certain amount. If you want to go to those co workings.

That makes sense. You've got a space to hang up your registration so that you're legit in that state. And that's why in the monthly that makes sense. But you're not leasing out five rooms that no one's going to.

No.

So in terms of the vulnerability and strength, I'm going to go back and start with that right away. Be very careful and mindful. It's more mindful, it's not careful. Be mindful that the CEO's job is to be the chief energizing officer. So your job is to throw positive energy and positive momentum into the group. To kind of stir the Kool Aid and being vulnerable while it's really good because it'll build trust, it'll build relationship. And you're right, nobody wants to work for a leader who knows everything. You don't want to go into the team and say, I'm super overwhelmed today. They need to see a CEO that's got their shit together. You can't walk into them and say I'm really scared about the economy or the markets right now. That destroys confidence for 45 days. Yes, it builds trust and it builds confidence that you tell the truth. But the energy that you pull out of the group because of doing it can really be detrimental. So I, I had this happen to me 20 years ago at 1-800-got junk. I pulled our team together for our daily huddle and I decided in full vulnerability to talk about how stressed I was and how frustrated and worried I was. And I thought I was just being open and honest and vulnerable. And what happened with them is it made them all nervous for three weeks. And then my second in command, Tressa Reese, came to me and she's like, dude, you just scared the fuck out of all of us. Are you okay? Like, we need to know you got your shit together. I'm like, God, you're so right. Like, but I needed to know where, where is my Safe place that I can be open and vulnerable. So I found that it was with the leadership team. With a CEO, it's often, I would even say not so much with your whole leadership team, but just with your CEO. If you and your CEO can kind of be like a husband and wife in a traditional marriage where you just need to be able to say, I'm scared, I'm worried, I'm frustrated. But you don't tell the kids that. The kids need to think that mommy and daddy have their shit together. They need to know that, oh, mommy says, well, I'm struggling with something today. But they need to know that that's not a daily occurrence for you over the course of a month. And I think as entrepreneurs, when we go through the. Because we're in a bit of a wartime situation, I'll bet that we will not see interest rates drop by even a quarter of a point until at least the first quarter of 2025. I think we're locked and loaded for 16 months with higher interest rates potentially even going another full point over the next 16 months. And my gut is we're not going to see even a quarter point drop. So I think we're going to be in a tough time for 16 months. But your employees need to feel like Chantelle's got her sh. Chantelle's driven. So vulnerability can be, no, I'm not good at it. But the fear and worry and nervousness part, you need to compartmentalize and find a group to share that with. So that can be group coaching where you're with a group of other CEOs. Like I have a group coaching model where CEOs talk and it's only them talking with me. That's a good format to share all vulnerability with. A one on one coaching relationship with your spouse. If you're in a forum group, like an entrepreneur's organization forum or ypo forum or a Vistage tech group, where you're in a group of other CEOs. Be careful because loose lips sink ships. Vulnerability is good. It's kind of like debt is good until it's not. Debt was great until last year when all of a sudden interest rates doubled and people went, oh, shit, I had a variable rate in, you know, loan. All of a sudden that debt's not good anymore. Vulnerability is not good when you share it with a group of other CEOs and one of them decides, not because they're trying to hurt you, but let's say Bob hears you talking about how worried you are about the market and Interest rates. And it's hard to find good people. And you share that in a group of seven CEOs, one day over lunch or in a forum. It's hard for people to keep secrets because they care about you and they want to help you. So what happens is Bob believes that group. And Bob talks to two of his friends, Hey, I know you're in real estate. I've got this woman that is in our group and I'm trying to help her with stuff. She's a little worried and scared about her industry. And all of a sudden your fear and vulnerability is now leaking out into the market. So you've got to be cautious with being too open and too vulnerable. And I think it's a good one for you to be mindful of going forward.

Yeah, I think that's great advice. And we, I do have that relationship with my CEO. We are very much like a tight knit husband and wife. There's a lot of things that we just keep between us, which is really.

And I think what you need them to now do is also to be able to tell you where you're screwing up and tell you where you're saying the wrong thing. And say, like, you need to almost go to them and say, hey, can you just keep an eye on me over the next three months and let me know if I'm ever showing weakness or fear or insecurity that's hurting the energy of the group, or can you just call me on my shit? Do it privately. Do it one on one. Do it over coffee or when we go for our walks or whatever. You want them to be comfortable in saying that? The emperor's new suit, right? You know the story of the emperor's new suit? You need them to say, hey, you're naked. Right up in parade in front of all the employees. The employees going, wow, nice new suit, right? Brian and I, when we were building 1-800-God junk, even had a room at the office that no one knew existed. It was this small storage room over by the freight elevator. And for a period of 18 months, we would duck into that room and sit down and go, holy, what the hell? Are we going to make it or are we going bankrupt? I'm worried our CFO is scared. And then we'd walk out of the room pretending we had our shit together for the rest of the week. But we needed to have our space. So make sure that you and the CEO continue to build that space with each other as well, to do it and get out of the office and share and Then your job is to shine the spotlight on them internally and make them look good. And their job is to shine the spotlight on you internally and make you look good. I would make sure that for the next 16 months, any tough decisions, any bad decisions, any firing, any reduction of force, any cost cutting, that they're the one who says that and rolls out that messaging to buffer you so that you are that shining light and that good energy and that positive energy.

Yeah, I agree with that. One of the things that I focused on last year, the problem with me is I'm such a big thinker and Heather is too. So we kept building systems and processes for a hundred thousand plus agents. We were paying money for systems and processes for 100,000 plus agents. And it's like we need to have systems and processes for 10,000 agents instead of a hundred thousand. And we were spending so much money and building everything for that hundred thousand. And so last year we were not profitable because we were focused on that. This year we said stop right away. And now we have gotten so skinny. I'm just so proud of both of us. Like, we're just like, we don't need that. That's like if we need this and we took all of our processes and built it for 10,000 agents, and so now we are so much more profitable and all we're focused on is profit first. Profit first. Now I have that energy back.

Well, then what I would be focusing on, even ahead of profit, is your employee engagement. Really? Really making sure that all the employees and all the agents are super happy, super engaged, good communication. If you obsess about them being happy, revenue and profit will follow. So you have to care about their feelings, their worries, their insecurities, all the that's happening at home with them. Like as an example, right now, every single one of us, you, me, our friends Heather, your frontline employees, every one of us is struggling with something, whether it's a health issue, a debt issue, financial worries, the market, our mom and dad, a divorce, a cancer. If we care about our employees more than anybody else, if we care about all their personal stuff more than anybody else, they'll go through brick walls to try to build the company. Because all of a sudden they feel this incredible connection to us as humans where they don't feel that in their normal lives. So the way that you're going to get your agents really performing is by actually really caring about all aspects of their life. And that doesn't mean their dog's name and their birthday. It's really knowing what's going on with them and it's getting your management team, your leadership team, your regional managers to actually really give a shit about people. I think we can often care so much about systems and processes that thinking that that will drive scale. What really drives scale more than anything is super engaged, happy employees. What really drives profitability more than anything isn't systems. It's also super engaged, happy employees.

We really like. If you look at our systems and processes, they are dialed in. I it's funny because I showed a friend of mine who owns a Cold Stone Creamery and I showed him our back end and I looked at his back end from Cold Stone Creamery who has how many offices. He's like, your systems and processes are 20 times better than ours are. And I mean no, no disrespect, but Cold Stone Creamery, whoever the CEO is, better get coaching from Cameron Harrell right now because your processes are not good. That's what I will say. You need to reach out to him.

So what I would almost do is stop working on any systems for the next 12 months. Only focus on happy people. Happy people, happy people. If you have super happy agents, they're going to recruit other agents. If you have super happy agents, life gets easy. If you fire all the grumpy agents, fire all the negative agents, really become a super empathetic, happy leader. Everything happens really easily. Heather needs to be the leash to the Chantal Dragon or she needs to be the brakes to the Chantal gas. It's dangerous and trust me, I've been there. I was similar to Heather where I was like, yeah, let's I was a very growth figured out as we go. Drive hard, second in command. What Brian needed was a balance to that and we were almost like nitroglycerin. We got the company to the 100 million, but we almost imploded because we kept going, growing too quickly. So Heather needs to start learning how to be a quick start, but also how to slow it down to say what's the who, what, when, where, why and how for all of these ideas? What's the ROI off of these ideas, putting these systems in place? What's the pain in the ass factor of each of these systems or ideas? How many people and how much time and how much money is it going to take to put these in place? And then what's the real ROI this year on employee engagement, customer engagement or profitability? And then deciding is it still a good idea or do we kill it? If it's still a good idea, do we start it now or do we keep it on a list and maybe started next quarter or the quarter after that? Because you're never going to have a shortage of ideas, right? As entrepreneurs, we're always going to see ideas, we're always going to see systems, we're always going to see opportunities. The key is to decide when to put them in place. And true leadership starts becoming about saying no more often than we say yes.

That is really, really good. I feel like what you said to me right there is we need to stop focusing on systems and processes. They're so dialed in. We don't need any better systems and processes. The one thing we need to do is focus on caring about people. We might need to figure out a process to care about people. Like, figure out what that process is.

Here's. Here's another thing. You never have to figure anything out. Someone has already figured it out. So as two of my friends, Dan Hardy or Dan Sullivan and Ben Hardy, wrote a book called who not how. You don't need to figure out the Process to make people happy. You and Heather and probably all of your management team need to read the book the Dream Manager by Matthew Kelly. Just put the systems from the book the Dream Manager in place and you win. The other thing that I would do as part of your system for happy employees or high employee net Promoter score. Are you familiar with the concept of net Promoter score?

I'm not.

So the Net Promoter score is a survey typically used on the customer side of the business. And you would ask all of your customers, usually every six months on a scale of one to 10, how enthusiastically would you recommend our company to a friend? And then what I do on the thank you page is I say, what's one thing we can do to have you give us an even higher rating the next time we ask the question and I start taking all their ideas and putting them in place. The way that the number is calculated, you take the percentage of people that give you a 9 or a 10, those are your promoters, and you subtract the percentage of people that give you a 1 through 6. Those are your detractors. You end up with a result of somewhere between negative 100% and positive 100%. According to net promoter score, World class is greater than 50%. But that still means that 75% of the companies are worse than you. And you're still in that top 25%, that top quartile. You want to be more world class. So really you need to get your customer net promoter score at 80 or 90%. Or higher. You also want to do the same question with your employees. On a scale of 1 to 10, how enthusiastically would you recommend this as a place to work? And take the percentage and subtract the percentage you're looking to get an employee net promoter score at at least positive 80 or higher. And it never, it comes down to listening to what they want and then putting those things in place.

So let me explain to you something that is very unique to my company where we have real estate agents. When we first started the company, what we did is our target was customers and we had agents. So for example, our mission statement that we had before, which we still have, we have an agent mission statement and we have a client mission statement. So our client mission statement was to glorify God by putting our clients interest above our own. Which meant if it was better for you as a client to rent, which we don't do property management, I'm going to do what's in your best interest. I don't care if I don't get a dollar from it. I'm going to look at you and go, Cameron, guess what? You don't need to sell this property. It's better for you to rent it. I'm going to refer you to our property management company. I'm not making a dollar on it, but I don't care. You'll refer me business. And that's what our mission statement was. Our agent mission statement is to build a lasting career where agents have ownership and income through revenue share and create a life worth living and are able to retire with a legacy of wealth and wisdom. So that's what our agent mission statement and then our vision statement as a company is to change the lives of the communities we serve through abundant giving. Because I believe if all we care about is just making another dollar, making another dollar. It's like, I don't know if you've heard this game that they have out there now. It's called Cookie Clicker. All you do, I, I, my son was playing it the other day, I was like what are you doing? He's like it's called Cookie Clicker. And I'm like do you go up down? Do you like win anything? He's like no, you just click as many cookies as you can and then you have a hundred cookies and 200 cookies. And I'm like this is insane. I can't even believe they make a game like this. And I was thinking, you know what, that's what most people in life do. All they care about is getting another Cookie making more money. And for me, that's not what our vision is.

That's not what makes your agents fulfilled and happy. It's not what makes your employees. So that's where if you really obsess about their happiness, what you'll learn on that net promoter score survey is they want better communication with their boss. They want some more training. They want somebody to help them. They want someone to teach them how to use the CRM because they're overwhelmed. They want someone to teach them how to use technology and AI. They want the company to organize some monthly speakers for them. They want to be put into a mastermind community where they can learn. They want someone to care about their relationship with their mom or help them with their parents who are struggling and moving into an old age home. It never has anything to do with just make more money. But that's. But you guys as a company need to change. There something else that I want you to be mindful of is that you're at a size company now. How many total agents and employees roughly do you have?

Yeah. Several hundred.

You're at a stage now where your business has to become a little bit culty. And I want you to start thinking about without going too far, right, without becoming Nexium or without becoming the Moonies or Jim Jones. We want to start putting in place things in your system that are a little bit culty. And culture is not the free massages and the free perks. It's the obsession with core values. It's driving towards a vivid vision. It's celebrating core values, celebrating your bhag, talking about core purpose and vision and mission statements. It's really getting rid of the negative grumpy agents and only bringing in the good kind of agents. It's putting in place anything that would be like mlm, like, like the branding and marketing. I want you to start thinking of you and Heather starting to study and think about things that cults do and how do you bring those into your business without going too far? And that's where franchisors do a really good job. You know, at 1-800-got-JUNK, we were the number two company in Canada to work for. We were very culty but we didn't go too far. You know, we didn't pull people away from their families. We didn't have them give up their income to work for us for free. But because we thought about the culture of the organization is so important versus system, System systems.

Give me some practical things that you guys did to make you culty.

Everything we did had a branded term on it. You know, we didn't have our monthly meeting or our team meeting. We had our war meeting. We had our GGOB meeting. We had our daily huddle meeting. We had our. The rooms were named after people. So we had Corzan Corner. We had the Right way, we had the garage. We all handed out branded clothing to everybody. Everybody on, on day one got coffee cups and water mugs with our company logo. But then at the end of their first month, they got branded fleece jackets that they could all wear so we would spend money on stuff. So people were all wandering around with this branded clothing all the time. We celebrated lots. Like, we really worked at celebrating core values and thanking people, living core values and calling out people. So almost like if you went to a, to a pep rally or an mlm, if you went to like an Amway meeting, it's like, come on, these are our diamond people. This is our. So we had the president's club and we had our Diamond Club and we had our, the awards, internal awards for different. For culture. It was all those things. We had branded sayings everywhere in our physical offices. What are your top five? Who's doing what by when? Focus, faith and effort. Like on the back of washing doors, when you were walking out to the rest of the office, it said, what are your top five like? To get people focused again, brief execute debrief above every single whiteboard right now for our CEO alliance, we have zoom backgrounds for every single member. And those zoom backgrounds show if you're a first year member, second year member, third year member. And then they also some of them have a little gold seal that said I invested in my leaders. Those are for the members that have at least five of their managers going through the invest in your leaders course. So there's like these little culty sashes or ribbons that cults give out. You know, the Ruby Club or the Diamond Club. Build those things into your program. Very kind of Mary Kay cosmetics. Because at the end of the day, employees fall into the Maslow's hierarchy of needs. Maslow's hierarchy of needs talks about the whole the five layers, right? And the top layer is self actualization. The bottom layer is just food and water and shelter. But the middle layers are friendships and family and safety and security and self esteem. Well, those three layers are culty. When you give out awards, that hits on Maslow's hierarchy. When they have friends. When you get to agents get to know each other. When the agents are working from home, that's okay, but you put them into accountability groups of five so that every month they're meeting with five other agents from all over North America. And you're stirring the Kool Aid. Do you have book clubs? You kind of bring in the Oprah s factor into the business. And that's where culture will really drive results. I'm going to give you a recruiting tool that's really interesting. What does a normal agent or an average agent. What will they earn in their first 12 months with you?

That's where I'm saying, when we first started the company, we provided leads for people. We spent about $60,000 a month minimum on marketing and advertising that brought in leads, and then we disperse those leads out to agents. What we decided is that method will not scale. That's a great method if you want to stay small. That method will not grow to a national company. So I have two biggest competitors. One is Keller Williams, and one is expensive. You cannot give leads to agents because what happens is as soon as you start holding them accountable for the leads, they're like, screw you. I don't want this anymore. That lead was bad. I'm busy now. I'm working with my own leads. They let the leads drop. And so if you hold them accountable in any way, they're like, peace out, Cub Scout. I'm out of here. It brought in agents like crazy because they were like, oh, you got to go there because they provide leads. But it just as fast they went out the back door because they would say as soon as you held them accountable, they didn't want it. They became an independent contractor for one reason, which is they want to do their own thing. That's what it is.

If they're following your systems, what should they earn in their first 12 months?

So the average agent in general sells approximately three homes a year. Our agents are averaging about three, six houses a year, which is almost double.

Let's say that their first year they're selling three houses. What are they going to earn?

I would say if you figured the average commission is around $10,000, I would say they're probably taking home around $24,000 a year if they sold three houses.

Okay, so let's say that in their first year, they're going to earn 25,000, because it's for. For sake of math, it's going to be easy. The bonus that I want you to consider putting in place, and this is for any agent in your system right now, is if they recruit an agent who comes and work for you, they're Going to get a $15,000 recruiting bonus, but it's going to be paid $3,000 a year for five years. As long as they're still with you and as long as this new agent is still with you. And it's paid out at month 12, month 24 month 36 month 48, month 60.

But we have a revenue share calculator where it's all already laying out and it's already in the system. If they hire an agent with us, with our firm, they make a percentage of everything they make.

So let's say that they're recruiting an agent who's going to be underneath them in their downline, which is perfect. It's an mlm.

This is the Rev share calculator. So this shows how much they could make if they recruited 25 agents.

I just want to look at one. If they're recruiting one agent who sells three houses a year in their first year, how much money are they going to make up that agent?

They would make about $4,200 off that agent. This is based on if they sold about eight houses.

Okay, so I'm saying that this is. That's why this model isn't working that well for you, is it's not rich enough for them. Remember, the model that I'm saying is they're going to earn 3,000 a year for five years. So they're going to earn 15,000 over the course of five years.

Let's say they just hired five agents.

Just do it on one. It's easier to compare apples to apples one to one. If they hire one agent, you're saying that if that agent selling eight houses a year, they're going to earn 42.

They make 10% of the company dollar. They would make 42 hundred dollars in a year. That's if they sold about somewhere between six and eight a year. So they'd make half of that if.

Here's the thing. You told me that the good agents are selling about 6. So this model is already feeling out of stretch for them. Two parts. If you don't want to change this model. I like the calculator. It makes sense. It's good. You guys need to then spend a lot more time teaching agents how this works, having them be able to teach others how this works. Like they need to be able to share this with mom and dad and explain it with certainty. They can't explain it if they can't see it. And if they don't think it's attainable, it's not going to motivate them to refer to you. You create a model that's easy for them to explain and they can refer it, whether it's this model or my model or anybody's model. The key is do they think it's attainable? Right? Which is why I said if they're only selling three houses a year, they all think that's attainable. But if, if this model is set

up, well, they make, it basically moves up. So they, they make 10% of the company. Dollar on every transaction moves up to 25% and then it moves down. But they MLM model where they can make it based.

Here's, here's why it's not working. Here's why this model is not incentivizing them. It's because they in their mind think a first year agent's only going to sell three houses. So they think they're only going to earn twelve hundred dollars to recruit them. It's not worth their time or energy to try to sell their friend for 1200 bucks. But if they were able to make three or four or five grand in the first year, recruiting the person, all of a sudden, if they recruit three or four people, they're making more money off their downline than they are. Like does it feel like it's attainable? And part of it is can they make enough money at it? I think for you guys you can share more if it's paid out, because it's only being paid out if both people are still with the company. I think we often get worried about these models that are so valuable, but we forget that if, if the value is there and nobody's quitting and everybody's referring their friends, there's so much goddamn money to share because our training cost goes down, our retention goes up, our recruiting cost goes down, our happiness goes up. The fact that people are just more productive at their end of their second and third year, there's just so much darn money to go around. I think the key is to make sure that the model really is set up so that it's very profitable for them, so that it's very, very easy for them to understand and so that they can think about it on a one person basis with numbers that they can see being reasonable. Like three or four houses in the first year.

One of the things we say, it's kind of like now and later money is like the now money is the commission they make. And then they also are setting up a retirement like you said. They have this plan that we already have in place. But maybe adding Like a just even a cash bonus of $250 or something like that they can get right away.

250 doesn't work. Remember, my bonus wasn't paid out day one. My bonus was 12 months, 24, 36. But it was big enough that it was like, holy, if I recruit three people, I'm going to make nine grand this year and nine grand next year. And they're not going to want that person to leave because now they know they're making money off them for five years, become their best friend. So you build in this little like a coaching and an accountability group and you build in the MLM systems. You take this and I would hire a couple people to work for you who have worked for Amway, who have worked for whatever the freaking brands are. Hire those kind of regional managers who can bring in those culty training retention systems and who can train people on how to go recruit more. I would go and grab 10 of your best agents and say, hey, go grab 10 of your best agents over zoom and say, hey, I need to talk to you about something. This model isn't working. What could we do with this recruiting model and this bonus model so that half of our agents would be like, holy, let me go get people. So people would stay, you know, what do we do? And ask them. It's kind of like when you were a kid and you did this as well. When you were four years old, you wrote a letter to Santa, you walked out of the mailbox with your mom, you put it in the mailbox, and then six weeks later you look under the tree. It's like, holy, Santa read my letter. It's like, no, Chantel, your mom read your letter, but mom just bought you the three things that were on your letter to Santa. If we ask our agents, create a plan that really works for you, that incentivizes you that all the other agents are going to want to use. It's going to really drive recruiting and retention and they'll tell us what the plan is. Put that plan in place. Are you still doing any marketing? You said you were spending about 60,000amonth on marketing and yeah, we are.

But again, it's to attract agents. So what we used to do is we spent all this money on marketing for buyers and sellers. We've now made a shift and now we're spending the marketing on Facebook and Instagram for agents only. We've just changed who our target was. We used to target buyers and sellers, then had agents work those leads. We had this major shift where now we're just targeting real estate agents. It's their job to find the buyers and sellers.

So here's a different approach to consider as well, is if you were to take that marketing budget of looking for more agents and you were to turn that marketing budget into a better bonus program, a better kind of commission structure, and you were going to take some of that money and you were in turn into a better training program for your agents. So you were really going to show them the love, you are really going to give them the skills, you're really going to give them the confidence, you're really going to give them a bonus program that worked. Could you get even higher results than spending that money on marketing for agents?

What we did is we followed A company called EXP is our biggest competitor. EXP is a $2 billion company. What we did is we basically did exactly what they did, but added about 3 or 4 billion more benefits that they have. So we basically, like, if you think about Uber and Lyft, we're Lyft and they're Uber. And we basically replicated what they did, but we also added three or four things that are major, major pluses to our company. For example, at EXP, the $2 billion company, they have one broker for the entire state, which we've recruited so many agents from EXP because they're like, I can't get a hold of this guy. He doesn't even know our contracts. So we said, okay, we're going to provide local brokers. So we've really emulated another company that is very, very successful already, and they're doing very, very well. But they also are a publicly traded company and they lost millions and millions of. They've lost totals of billions of dollars for the first 10 years. The miraculous thing about us is we've been able to see stay profitable. Not huge, huge profits, but we've been able to still remain profitable with not going public.

I think you've got to be also learning from outside of your industry as well. I call it Ideas having Sex. That if you can take ideas from what EXP is doing and ideas from what a couple technology companies are doing and ideas from what a title company is doing,