[Inside Whissel Realty] Providing Agent Leverage Profitably with COO Chris VanderValk

I think the agent's job is illogical. You've got to be a contract writer, you've got to be an inspector, you've got to be a touring guide. You got to be good with people. You got to like all these things you got to be great at to be like the top agent.

Those are the words of today's guest. And what he was getting at is this idea that no one can be good at 100 different things.

Is that realistic?

No.

Like, does that make any sense to anyone in any other industry?

And it sets up the heart of our conversation today, which is about agent leverage. So surrounding agents with people and tools and resources to help them stay in income producing activities or dollar productive activities more often. This not only attracts better agents to your organization when you can do it well, it also provides operational efficiency and sets you up for economies of scale so that you can provide leverage and leads profitably. Our guest here on episode two inside Whissel Realty is Chief Operating officer Chris Vandervock, who not only is a super sharp person, he was. He was also very generous in sharing strategies and tactics for providing agent leverage profitably. For example, he breaks down how and why they're developing an agent advisory board internally in great detail. He also shares the development of their ace team or agent concierge experience to provide even more leverage for agents. Chris explains their shift from a CAT model to a no cap model, retaining top agents in the process. He shares how they allow the most productive agents to claw back some of the split. He also breaks down some of their favorite lead sources. That and so much more as we go inside Whissel Realty here in episode two with COO Chris Vanderbach on real estate Team os.

No matter where your business is today or where you want to take it, you'll get there faster and more profitably with an operating system. Welcome to Team os, your guide to starting growing and optimizing real estate team. Here's your host, Ethan Butte.

Chris, I'm so excited for this conversation. I appreciate you so much. You unwittingly triggered the foundational ideas that led to this inside the team approach that we're taking. So anyway, welcome.

Thanks. I'm excited. I think we talked back at what was that Unlock. And I think you're a great curator. So it's exciting to kind of go through how we built this.

Yeah, thank you. I love that language, by the way. I know you also like how I built this. I think about this in sometimes, you know, aspirational more than anything. It's the How I built this of real estate teams.

Feels like that from watching, you know, George and Billy and their team down to the solo agent episodes. It's very much reminiscent of that. I'd say.

Cool.

Well, we always start with the same question, which is what is a must have characteristic of a high performing team?

Oh, gosh. I think being critical, like critical thinking to get the right idea, critical of your own ideas, critical did you execute right? I would say hyper criticism with positivity is, I would say, is our culture.

When I hear critical, I think obviously critical thinking, as you said. But then there's also like this, this layer of what are we paying attention to? What are we keeping an eye on? So for you, when things are going really, really well, what do you think is going well and what are you looking at to know that things are going well or things are going poorly, like because there's a part of criticism or being critical in thought is knowing even what to pay attention to?

Mm, that's a really good question without trying to sound toxic because you know, you'll hear from the rest of our people. I don't think we have a bad culture. But you know, Kyle, one of his sayings that, you know, early on when we started working together, you'd always say is like, I want you to tell me like 50 things bad before you tell me one thing good. I don't know that I've ever articulated to that anyway, but I, I have a. Just not being comfortable, not being satiated with it. So critical for us is like, even when we're doing good, how do you know you're doing good? It's like there's always supporting measures like culture. Like people are positive about it, right? The numbers are going the right way, the metrics, the people are feeling the right way. Like those are the soft little touch points we look for. But ultimately something we say a lot, I was thinking on the way in here is like, guys, we suck so bad. Like we just laugh about it internally. Like, and it's cool to sit at a team meeting with eight, nine other admin that are just decision makers and go, yeah, that's really bad. Like we should fix that. And so we're just critical about not being in love or romanticizing our success or what's going right? And just like, okay, that's good. But all of our agents aren't using it or all the consumers don't even know this is available for them or we haven't even iterated on this in a while. We're just kind of resting on it. So that's kind of what I mean by critical is like, it's, it is going well in a lot of ways, but there's so much improvement, opportunity. It's kind of endless.

Yeah, I appreciate too, the idea of give me 50 negatives, even if it's only 10. It's, it's playing against a little bit of kind of the yes person default and you know, a lot of the great. Awesome. Frigging amazing. You killed it. There's so much back padding that can feel empty, that, you know, when we're actually going to get something done, we need to be like, let's be critical about this.

Yeah, I agree. I think. But we've also learned that we got to, you know, just in the same way, it's like, hey, we got to acknowledge positive things. We got to implement real systematic structure. If we're going to operate this way, where that's our natural way of thinking, we've got to be more intentional about the, you know, positive reinforcements, the good shout outs, living by our core values, things like that. Because otherwise you get in, I think, a toxic culture really quickly.

Yeah, okay. Give me a definition. Walk me into it. First though, give me a definition of the COO role as it is today here in the back half of 2024. But like, what was your path into it? How is. And you've been in it for several years. So talk a little bit about, like, walk us up to today and at that point then maybe give us a definition, like, what is this role?

Yeah, it's a strong question because it definitely evolved. Yet today, what does it look like is a lot less hands on, working through things, which is cool. And I've had to learn to be eyes on, hands off. And I had a coach that taught me that, saying I was like, that's a good ideal. Like, how do you get to that? And you know, I'd say over the last year, year and a half, I've really learned that. And ultimately it was just me learning, you know, I kind of related to my first dog that I had who's really well trained. Everyone loves my dog. But I was like, I had to learn how to work with this dog more than the dog had to learn how to work with me. And I think the same way in my CEO role. I already had the right people, but I had to learn how to step back and let them rise up, how to challenge them, how to expand them. And ultimately then they're driving, I'm supporting, which is what it looks like today, um, most of our projects or initiatives are, you know, I'm a breadcrumb. Everyone you'll probably hear say, I leave a lot of breadcrumbs. I have ideas. And I'll. I'll kind of manipulate those thoughts into people a little bit, and then I'll see them make it like, okay, I did not have that idea that was. That's a lot better than what I thought it was going to be. But, you know, it didn't start that way. It started out with a long to do list of, you know, I'd say at any time, 40 to 50 major initiatives that I was, like, frantically rattling through in my head. And you're just one person you can't achieve. And if you try to get everything achieved, you're gonna exhaust people or spin them too many different directions. You'll lose people, which I always knew. So I kept it a private little issues list. We have a public one that we all agree on. But I had Chris's Private World. And so over the last, I'd say, year and a half, I've learned to get rid of that and start to, okay, well, what department should this flow to? They can't be protected from this. And if they don't think it's a priority, I need to listen. And we got a dialogue. And either I haven't influenced them enough to see what I'm seeing, or I'm not seeing what they're seeing. And so I think it's been a tripulation of that development of owning everything. But before that, when I first took the role, ultimately, you know, I came in with Zillow offers for a role acquisitions manager, and it wasn't a CEO role. I got to that. We became one of the best acquisitions percentage teams for Zillow offers at the time. That didn't end so well overall as a relationship, but we had really good success there. So when we got, you know, the call that Zillow and us were not working together on Zillow offers anymore, I think we had 15, 16, 17 employees. I'm like, I don't remember what it was anymore. And everybody, we just kind of. Kyle came in, you know, tough day for him. You know, you got to tell the whole room of people, hey, this is over. And, you know, I don't think in real estate that's ever something anyone expects to do of a team. Like, you don't have that much lack of control that you just have to fail. Swoop dismissed that many people. So I went to Kyle the Next day I was like, so I kind of been secretly building a department inside the company throughout. I've convinced three other people that they have like this third tier of money that we can earn in traditional ISA department, which is where I came from originally in real estate. I was like, I think I can come back tomorrow and make money with these three people. So let me show up tomorrow and I will get a couple of us to show up and. And the rest will sort itself out. And that's kind of what happened. And he's like, he's gamer, man. He was like, yeah, okay, cool, see you tomorrow. And so we did. We showed up back tomorrow and we were on Boomtown at the time and we started being traditional ISAs for the company, cleaning it up. That led to this. What are we doing here? This is a mess. So that fast forward into yo, this CRM is not going to work for us. We got to go to something more dynamic. I knew about follow up boss shameless plug for that. That was our pivot into that quickly turned around database management for us. And overall lead flow management took it away from agents, had a backend kind of control. And I guess it got to a point where it was like, okay, there's other departments besides inside sales that need to be adjusted for inside sales to work maximally. Like from operations to outside sales. We gotta have some control shifts and I don't have the decision making power. So I ultimately presented them at a letter of resignation. And then at the top, I was like, mostly kidding, but I do want a formal ask for this position. I want the authority to do what I need to do. So we went out for drinks and dinner and talked about it and what did I want? What did he want? And fast forward. We ended up signing up for eos, which was probably one of the best decisions Kyle made. Cause for me coming into my role, I've never been a coo. I had good insight, good instincts, some good experience. Not a lot being a young guy. So EOS allowed me to basically take Sean McVeigh as an offensive coordinator. And this is the playbook. I don't have to create it. You know, Sean is a good coach. Can we just plug this program in and you'll follow me through it? And that's ultimately what my team did with me. And I didn't have to be the one that set the meeting cadence, the, you know, the accountability structure for projects and a lot of that. It was all kind of packaged in a box and so allowed me to focus on my strengths of Leading people versus systematizing, all these different nuances of being a great executive. And so it started there and now has ended up at me really I think being a lot more hands off.

Yeah, it's good. I, first of all I love the way that this started which is I know how we can make some more money tomorrow. Like I have an ear for that. Yeah, I'm willing to have that conversation. Talk about EOs. Is that when did you like formally commit to it? How long was that kind of in the background? What was the motivation? Did you self implement or did you hire a facilitator? Just break that down a little bit for folks who aren't as familiar or maybe dabbled but never committed, which is obviously not going to be successful with a system.

Yeah, yeah. I wish I could recall exactly it was Kyle's idea ultimately I'm guessing from his EO forum. I think he's in a kind of entrepreneur forum. I think he heard about it and knew about it and it was, you know, Kyle's really good at aggregate and a lot of ideas. He's got a lot of fingers out there in the different communities and and so I think ultimately he brought the idea up. I looked at a little bit and it was just, it made sense, you know it made sense. Like I just thought it was like oh, it's the pressure. I can't even describe the pressure relief of like I know I'll be successful at this. Like I just have a lot of conviction in myself. But to know there's something already proven. So Kyle had heard from other people not self implementing is the way to go. He interviewed three or four different people. He ultimately selected our implementer. We had our first session and Kyle and I had privately at the time discussed me being in the role. We um, but we really didn't tell anybody. Um, and I don't think that was super intentional. Uh, it just some things just kind of work out. I think we were just both let's feel this EOS thing out. So our day one we met with the integrator or the implementer and so we had to do the A chart. That was one of the first exercises to get obviously get your masterclass overview. What's traction? What does this look like? What are all the systems? We're gonna go through day one but it was a full two day breakout of like let's get soft launch of what EOS is and one of the first exercises in the A chart is deciding key roles of the A chart like your head of operations Your head of sales, you have an integrator, a visionary. And so we had to name people. And so it was a democratic process for the integrator, which ultimately was named by, I think everyone in the group, except maybe one person at the table, like 12 of us at the time. Very wide leadership for the size of the company we had early on is basically Kyle. And then a lot of people reporting to Kyle, but everyone named me, which was a really humbling, cool experience. And it aligned with what Kyle and I had talked about privately. And from there it was on. We had, we had an implementer from EOS doing, I would say, our first three, two and a half, three years. Don't quote me exactly, but somewhere in there, just in the last year and a half, it came to be okay. I saw some fundamental flaws of project scoping. And ultimately we were at a point where we had enough traction without it, but we were, we were moving too quickly through discussing key big problems. And so ultimately, you know, where the implementer was really strong is in the early days, keeping us on track to accomplish a lot. As we got traction together. It was very obvious of, okay, we need to like, go a little bit deeper to solve real problems and maybe this person is pushing us along too fast. And we all kind of had that sense. We'd made mentions of it. And so eventually I said Kyle. And he agreed. Like, let's, let's have you run this. I'm gonna run it. And so I ran a little bit differently. And what we saw from that is, yeah, we went deeper on a lot of conversations, we didn't go as wide. And that was scary at first. Cause you've been going deep, deep, or you've been going wide, wide, wide. And going on one or two subjects the whole time was like, are we getting anything done? And then fast forward to where we're at today. You know, we just shipped like our agent advisory board from concept badge design for socials and everything external to infrastructure. How do we run it? How do we promote it? How do we incentivize other people to want this? We, we did all that in like three and a half weeks, which for us, that stuff like that took us three months because rocks were three months. So I'd say that's the involvement for us. But we could not have got to this point without a implementer. I'd say, at least with me as the initial integrator.

Yeah, really good. I hear that a lot too, is some people. Can some people take off and fly on their own, Other people Just have someone come in for that quarterly meeting and other people keep, you know, close advisement and structure all along. There's a lot in there. I really appreciate that. Talk a little bit about that agent advisory board. Like what was the spark for the idea? What were you trying to get done with it? Because it sounds like it's something that's dawning at the moment.

It is. It's very new.

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But we interviewed, you know, I want to say 14 different agents out of our. I think we're at 115 right now. Don't quote me. It's always we have about a 35% churn any given time. Like we very standardized. We try to keep people coming in, keep them coming out. Um, and so interviewing, you know, those people, it was really eye opening for us. But why did we do it? Um, ultimately Kyle's not in production, you know, hasn't been. He'll do a deal here and there, but is he's a wealth of knowledge. You know, I sat down with Kyle, you know, end of last year and kind of talking about the direction of where I'm going here and where the company's going. And just, you know, one thing I take for granted probably is Kyle and I run very autonomously. We don't meet a ton. We're very in sync. One of our first things we did with our implementer was this alignment test and it's blind. You both kind of fill it out and he's moderating it. And I think we scored like 9.7 out of 10 on alignment on every single thing. So it was like. And it's like what keeps you up at Night, like, what's. What worries you? And it's like, I think gave him a piece that, oh, Chris gets me as a fiduciary. Like, he knows what I need. Now it's my decision to execute against that, and I do. But I think that gives him a lot of peace. So, you know, when we talk about his other aspirations and expanding our, you know, overall, our network of what we're trying to do, how do we free up Kyle's time? And right now, Kyle's our strongest deal. Dr. Our director of sales, Rachel is brilliant, but she doesn't have a lot of transactional knowledge. It's not something I. You'll see a trend with a lot of our leaders. Like, I don't think people have a certain box. They have to be, you know, checking in order to be in a certain role. I think people are dynamic and they can learn anything. And I look for characteristics and traits more than experience ultimately. So Rachel does. That's one of her bigger flaws is she doesn't have a lot of transactional knowledge, but she's a brilliant real estate coach. So if she's our senior leader of sales but doesn't know transactional stuff, we do have a weakness. We have to admit that down to Katie, our trainer. Not a ton of transactional knowledge, but a brilliant educator, really empathic, strong connection with newer agents and even our senior agents. So. But transactional frequency, not a lot. Kyle's not in production. Shannon has, out of all of our leadership, probably the most transactional experience as a director of operations. And then, you know me, I'm not in production. I haven't been for years. So how good are we really to our agent group? Like, at some point, are we. Are we qualified as these new NAR changes? Like, are we close enough to the pulse of what's happening? And the answer is, we look around like, let's be for real. We're not. Like, we don't know. And at some point, we risk being absolutely tone deaf to our audience. And so I think it's important we come to this point of, like, and we reject. I should add that we reject it. Well, speak to me. Like, I didn't want a lot of agent feedback early. You know, something in Kyle did that was probably one of our few conflicts we had is like, get a lot of agent feedback. Get a lot of. And I was like, I kind of want to stay siloed. Like, I know what we need to do first. And agents are going to, like some of these changes we have to make at first but if they see it through, I'm confident they're going to like this is agent facing, consumer facing. We're going to build good things for the people that want to be here. Some people are going to be enriched into the old ways and yeah, sure they're going to find a way to they overly benefited and it's not equitable for everyone. So yeah, they might have a little rub. So I didn't want a lot of feedback early as we evolved it's like, okay, now we're at this point of we can't grow without being in tune. We don't know everything, let's accept that. And so what we looked for in these as this agent advisory board is we wanted deal doctoring to be facilitated five days a week. It's currently held one day a week and it's only by Kyle. Kyle wants to do other things. He's at this point of can't exit, you know, fully even if he wanted to because he is very dependent upon for that deal doctoring nuance. So how do we achieve releasing him? That's a conversation I had from him, you know, late last year of just give you more freedom. How do we give our agents better deal structure and deal doctoring? Not through Rachel, not through me, not through Chen. So like that's group. How do we make sure ideas we want to roll out are actually going to benefit them? Especially around we're a very compliant group. We, you know, there's not a lot of individuality to our processes and ways of doing things that we're not a brokerage people think that because of how big we are. But we are very swim one direction type of company. Sure there's sprouts and things you can do off that. So if we're going to be that hard and fast on our policies of how we want you to operate and what the whistle way is, I have to have your input a little bit and that's if you have the right people, it's going to be on a lot of it. And so we wanted to get the right people and that was through nuance of deals. Do they have whistles back? Do they have the agents back? Can they dialogue with someone and actually not escalate them and understand where they're coming from so we can have eyes and ears on the floor. And so yeah, it was a two day process, 30 minute, very rigid interviews, not a lot of dialogue, very bored style from the military if you will. And yeah, I think we got our best five, six people.

Cool.

What's Their motivation or incentive. And what does participation look like? Just snapshot. High level.

Yeah that was. So that's what they give. What they get back is Kyle handoffs from a sphere. We badge them both for all of our presentations. Internal and slack, Gmail signatures, all that Agent advisory board very badge so that anything they're dialoguing with your consumers or anything external facing, it's very symbolic. Obviously, you know, it's a good ego play for them. It's a lot of our agents or any agents, they want to be recognized for their merits and so we did that. Oh also highly expectations driven team. So we locked them into platinum status for the year which means effectively the most rewards and the least amount of responsibilities that you have to adhere to, whether that be prospecting time, showing up for the meetings. We know you're going to show up. So let's not play this game of measuring what you're doing. Just stay locked in. And then this is an annual thing so we're doing it for our first five months right now. And then we have a holiday Christmas party, then our award ceremony family comes to that. So we're really excited to announce our 2025 applicants in Canada and actually electees at the Christmas party this year. So we'll do another round of interviews late November, early December for our official full year. So these guys have a little bit of a trial run and we'll figure some things out, we'll change some things, add more value and ship it.

Cool.

Love it. I didn't expect to ask that question, but you know, when we were chatting yesterday, I was like, oh, I want to know more about that.

Yeah, that's cool. We're really excited about it. Right. For many reasons. Like I said, the ability to just be fast. You know, I think that's something that.

And like the legit in this case, pure voice of the customer. Which you know, to your point, you did a nice job describing it. Like we just don't have that anymore.

We're in touch with it, but we.

Don'T have the literal voice constantly. And this is going to close that gap. Talk a little bit about, I mean I'm going to ask something very, very large and then you take it wherever you want. But it's, you know, in my mind the goal is to run a profitable organization that's growing in general and you know that sometimes you're trading off profitability for growth. Ideally you have both at the same time. Yeah, there are a number of key levers, but one of them that I think about in particular for the team model is. Well, I think of two actually. One is kind of where are we generating our opportunities and how. And then the other one is kind of what is the split fee service structure for agents and how nuanced is it so that we can have brand new people join us and be productive and we can have very experienced people either stay with us or even come join us and stay with us. So that's very, very large. But I'd love for you to speak either to kind of lead sources and how we make sure we're generating and closing opportunities in a way that is net benefit for the organization and for the agents and or how are you structuring kind of splits fee services to make it valuable for the agent to be here from a service side and cost effective for you as the provider of these ranges of services. For example, this beautiful media space that we're in that agents can use.

So anyway, two big directions.

You get to pick which one you want to go with.

I'm going to try to naturally, if you know me, I'll try to answer both at the same time if I can.

I'll bring you back together.

Yeah, no, honestly, before you said the word value, that's already where I was going to. So something we say internally is we have to make this so valuable people can't leave, period. Like that's the simplicity of it. And so what I fundamentally believe is that, and I've said this for about, you know, two years now to our internal staff and you know, over the last year we've shared that more than agencies, agents are going, and this is before the NAR stuff, agents are going to do more transactions. I used to say in 2024 and I'll say 2025 for the same amount of money. It's inevitable. Commission compression, consolidation, competition, it's happening. And I didn't always know the NAR thing was going to do commission compression, but you already saw it happening. And so data does that, technology does that, gives consumer more access, it resets the table. So if that's going to happen, and I know the avatar of the agent gets in the industry regardless of our best agent or a new Keller Williams agent, brand new off the street, they want as much time as possible, they want to make as much money as possible and they want to have as little accountability as possible. That is the avatar that we hire for this. And so I just, if I look at that, how do I provide that and focus on the margins separately? We have to be an organization that gives Leverage. Gary Keller's book, that's still not gonna ever be old or outdated. You know, listings, leverage, leads, you know, the whole thing. Leverage is a big part. Leads. We've always focused as brokerages. Teamer, just teams whatever. We gotta give leads, but you also have leverage and they're equal. And I think a lot of Gary Keller's book, you know, millionaire real estate, it's not. A lot of books are good from the late 90s, are still highly relevant in the technological world we live in today. So I say, how do we provide leverage instead of leads over time? Like, what if we switched? And so we've done that. We built an ace team agent concierge experience. We write offers for agents. We run CRM stuff. They call in post appointment, we fill out their disposition form. Gives us better data. Less bothering agents to do stuff we need them to do for us. So how do we just do it for you? We'll call you right after the appointment. We'll take the full intake. And our question always is, okay, what can we do more? Can we match deals internally by calling? We have all the access with our ISAs. What if the ISA department looked differently? What if it's just actually matchmaking internal deals and scheduling showings like Zillow does for our agents rather than asking them to go prospect? So how do we have time back? How do we offer value and then the margin split profitability conversation second, that's how we operate with our agents ultimately. Now, internally, what do we focus on is margin. Margin is something I think people underappreciate the power of even, you know, I'll use, you know, as a listing agent. You know, you'll go to a client and say it's a 6% listing fee and they just want to jump right to 5. And most agents like 5 is good. 5 is great. Why not 5.75? Most people don't even realize that quarter percent of margin, what it does to their actual gross profit throughout the year, you know, and how that ultimately affects the bottom line. So we're really careful with our margin management. But also we understand lifetime value of our customer, which is our agent. You know, I heard George talk about retention a lot in his episode. And, you know, it's, you know, I've been lucky enough to have a good relationship or not George, but Billy, good relationship with Billy. And that's something that always stuck out to me as we talked about through going from a CAT model, which was ultimately inspired by them three, four years ago, to a no cap model and how do we still achieve retention? But we can't give everything to agents on value if we have caps because at some point I tell our agents is very open, they like sure Adrian, if you had a cap at 35 or 45, whatever is going to be once you make that you're a really good agent, I have no reason to invest a dollar into you. I'm a venture capitalist. I should not invest a dollar in you. Like logically we should agree I should not invest in you Ethan. Like it wouldn't make sense but if we share in all dollars, some are in a higher split because I created the lead, some are on a lower split to me because you created the lead. But if we mutually share in the dollars, I always have the pressure to keep adding value to increase your top line. And I, I like that. That's a good pressure to have. It's better than I have to. I really like Ethan. I have to cut them off because I should go recruit new agents and give them get them up to 40,000 and look at a headcount per 40,000. I have my middle group that pays me 30,000. My lower group pays me 15,000 a year because they're not performing. That's my financials and coming from brokerage financials I say it worked but it keeps you having to always add width versus quality and that's not good for the consumer. So how do we keep our best people not cutting off our team leads, only working theirs. So we introduced a self gen split adjustment that used to be by volume. We learned quickly that's problematic based back to margins. So we, you know, just five months ago, four months ago was like okay, we either got to get rid of this program or we got to turn it to something else. And ultimately we decided changing it to GCI and going with the buyer broker agreements that really is beneficial timing for us. And so as agents get up to annually, I'm sorry, lifetime GCI tiers, they claw back 5% at each tier up to 8020 split for self gen for us. And then if you do in a single year you get up to what used to be 20 million in volume. I think it's 600,000 GCI right now. You get 95.5 on self gen split the rest of the year. And so we create this bounty system on an annual basis and a lifetime value of maximizing an 8020 split and that's, you know, it allows them to claw back. I don't know a lot of people that offer anything like that while also keeping them focused on because one thing we lost in the old model is our best agents, once they got their cap, they wouldn't work team gen leads anymore. And so our partners like Zillow or our paid leads in house that we have our pay per click, all those things we're getting worked by our newest greenest agents. Well, no business do you want that happening? You're like, you know, like you don't want your, if you're a mechanic, shop your Porsche clients coming in and getting a brand new mechanic. Like I don't think that customer would like that. So if we're have a brand that people know and consumers know, we can't give it to our greenest agents all the time. So we worked to create a commission structure that kept, you know, Adrian and Carly, who you'll meet through this, you know, series. How do we get them on our best lead sources and still want to work them? And ultimately the self gen split program without CAPS is how we achieve that.

Cool. How hard was moving off caps?

Hmm. I would say because I'm sure it was hard. I think it was harder for Kyle than me, you know, and you know, I'm sure he'll, he'll tell that story, but he had a coach at one point that convinced him to go to caps. And he's an econ guy, he's brilliant math guy. People probably don't know, they see him as a social media guy. But Kyle's really mathematically savvy. And so it wasn't a lot of convincing. As much as Kyle loves the people, that was our argument early on. It was like, okay, Kyle, here's the two things. We got to stop investing so much into people we get nothing back out of because the financial structure doesn't make sense. Or we switch it and we do it in the name of what I just explained of we're going to offer the value you're wanting to offer, but you can't toe the line in between or else we're going to lose money. Like at some point if we scale, the math doesn't make sense. And so I was like, we just have to run into it. And so, you know, Kyle's been through similar situations previous as brokerage. And so we both knew the number one goal we had was no walkout, no agents leaving, and we accomplished that. So we grandfathered all of our previous people in and we said, okay, this isn't the due for these people to pay. They helped us get to this point. We're still a top team at the time. You know, in regards to what we were trying to accomplish. And so it's like, let's create this legacy group. They're locked in. Will they probably work or flex leads?

No.

Will they probably work new emerging lead sources on team Gen when they cap? No. If we believe this is a valuable business, we'll be able to recruit out of this problem and this group will become a minority percentage of who works here and we'll recruit out of it. And that's what we did. So I would say not to downplay it. It was really easy because we didn't have to fight our key people. It was like it was kind of like an NDA at the time because we didn't. You know, people don't want to feel like they got the short end of the stick because when they joined it's like, hey, we're gonna offer a lot of value to these new people that come in. Just shut up. Like just don't talk about it and let them, you know, just let them vote. If they stay and they keep participating here and they work these leads and they start making money, you know, Adrian's at 600, he's on the new system. He's at 600 some thousand GCI. He's number one in our company by a lot. And then Carly, she's number three, I think. Same thing, same story. And they don't care about splits the same way we were dealing with before. And so we proved that we have a mutually beneficial, highly accountable to us adding value model. And I think that's a good pressure to operate with.

Yeah, that's really good. I mean, it's the sweet spot, you know, it's what's fair for everybody, that we can continue growing together.

Equitable.

Yeah, yeah, absolutely. Talk about lead sources, you know, how do you vet them? Like, I'm sure people are probably reaching out to you and like, wait, what's idea? How over time have you vetted kind of the. I think of it in a way as like diversified portfolio. You can either invest your own time and money, you can contract out that that time through self gen online lead gen. There are obviously a bunch of different partners you can engage. Some of them are pay us up front per opportunity, some are paper impressions, some are pay it close. How do you vet, you know, which ones are working for us, which ones aren't? Why? How?

Yeah, so this is probably an interesting, I guess, answer for but open houses, right?

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Traditionally on team model those aren't our lead source but in the model I just explained we sell on the same side of the table with our agent. So yeah sure do I get less margin on an open house lead with no upfront cost. How's that different than flex? So for me empowering my agents to do more business helps with retention, helps build their brand which and proxy helps our brand a Zillow customer, a realtor.com customer, OpCity customer, all those they've proven they want to go through a technology platform to find it and that's okay. We help those people at scale they're some of our favorite lead sources but from a focus is helping our agents with those open house leads is it solves a lot of problems simultaneously and by fixing our commission structure I can go and we recruited a director of marketing out of a different industry and one of his main scopes and you know he's only two and a half months in over time is how do we bolster self gen business for our agents and we know the cost per lead of pay per click and Facebook. We got those numbers dialed in. There's still a non committal lead that I have to take through my inside sales department, have two to three handoffs, get to my agent and hope that agent has a great you know experience with them and also they're making less money on it. So are they going to act differently? I would hope not but also I know if they're working their business they operate a little differently. So you know one of our favorite things to focus on is helping agents with their self gen specific specifically open houses. We know the conversion is really high. We all know the stat for, you know, most consumers work, you know, what is it, 71% or something like that, work with the first agent they meet in person. So if we can get from raw lead to contact made, which is ultimately in our contact center, 22 attempts to appointments set to appointment met, all at the first thing. Right. Why do we complicate it up here with all those different lead sources? So we work them all ultimately, but that's our favorite to focus on and offer leverage for because I feel like you're really it shoots and ladders, you're skipping a lot of steps of the process with no cost up front, similar to a portal. So that I would say if you ask me in Chicago, where I started my real estate career, I'd say that's the dumbest idea ever. But it really works well here in this market. And when I came in, the company was doing about 40% of business in open houses and it was pretty hard to ignore from the data for me. So how do we double down not to expand upon it for, you know, giving value to everybody else? We like PPC. We work with realty.com that's probably my favorite lead source. Ultimately we get seller leads, high quantity from them and buyer leads. We ultimately bought the whole San Diego county into Riverside, South Riverside, Temecula area, monthly. We've had it for two years, two plus years. And it's a really solid lead source for us from a team gen. Now over time, now that we have, you know, more of a traditional marketing department, more controls on the, on the gears as we've become more established, you know, I think PPC always makes sense. One of our goals this year is to be, you know, about a third of our leads generated coming to organic landing pages, our branded landing pages, not so much organic because we're willing to contribute paid, but ultimately we want people landing and knowing whissel realty, our value offers are, you know, usps and then our inside sales team working those leads into conversion versus realty.com or a forced registration, Facebook maybe. But ultimately we want people coming in because of our buy before you sell and our cash offer programs and other more productized offerings. And then obviously the bell of the ball flex. We love being a flex team. Ultimately it's great for senior performers, it's great for new agents. We give a lot of control on that. And we talked, you know, obviously offline yesterday. But you just can't argue with the math of eyeballs. Like I every Uber I take, I ask where people search for homes. Just I'M curious and I want to make sure I'm not blind by my own thoughts. And everybody says Zillow. Like, no one says Movoto. No one says Op City. No one says realtor.com surprisingly, it's Redfin or Zillow's. Literally all I hear them. It's like 10 to 1 Zillow, so. And no one says whistlerealty.com never heard it. So I'm just honest with that. Is like, yeah, we want to build more brand, but also if there's a strong consumer brand where our consumers are already shopping, let them shop there and help them convert. Make the margins work for you and the agents. And we do. And it's a scale play. But that's. I would say my favorite source for growth would. I would say for agent growth to revenue growth would be Dell Flex.

Cool. Thank you for all of that great breakdown. You covered a lot of ground, like, in one smooth path.

I told you I was gonna try to do both. Yeah.

Well done. So you mentioned earlier that you had your own kind of to do list or project list. It was 30, 40, 50 deep. When you're thinking about we're in the back half of 2024. When you're looking at the year ahead. I know that you're following the EOS model, so there's a lot of structure to it, but what are a few things that are on your. I really want to raise this conversation or. This has been backblazing, Bernard. You know, as we've been setting our quarterly rocks, it's time to finally, you know, advance this one forward. Like, what are you looking forward to over the next, you know, 12, 18 months? In terms of. These are a few things that are next for us.

Yeah. Iteration of our ACE team. I'd say that's a really good idea.

Remind me the acronym again.

Yeah. Agent Concierge. And so that team does all the things we used to yell at our agents to do and just ask them gently to do it or says, I'll do it for you. Will you just talk to me so I can get this information from you? Not many operations in the world operate with bad data or no data on what's happening in the funnel. Like, I couldn't name one. So we can't operate without that data of what happened in the appointment. Did we go like Zillow's badgering us for it? We don't let our agents do any of that data reporting directly to Zillow or for that matter, any other lead source, including internal. It's just not going to work. We. I accepted it. So getting that better and offering more value such as offer writing, creating custom listing and buyer presentations per client, integrating that with our marketing team. Really excited to offer more value. That said, that has to be our pressure. The other is ISA support for our agents directly changing the face of our ISA department from a lead gen source for team gen leads into agents don't want to work leads. They want appointments. We all know it. Zillow proved it. They got proven right, right, right, right. Everybody followed from a lead referral model. So how do we just say go sit an open house. We'll take care of the rest. Don't call the leads, please. Like, we'll just do it. We'll do that. Oh, you want to buy leads? Cool. We'll work them. We'll put them right into our top line. Obviously, there's a lot of complexity around duplicate leads and who really owns it and if it already was in the system. And so there's a lot of nuanced things to figure out there, especially when there's legal contracts with each portal, things like that. But that's a big goal that we have is ultimately some of our top agents that, you know, they're making, you know, high six figure. I look at their account and I'm like, oh my gosh, they could use an assistant or they could actually let me expand on that a little bit. Like the ace thing, the whole reason that exists and same thing. ISA I think the agent's job is illogical on its face. Like what it's always been of. Like, you've got to be a contract writer, you've got to be an inspector, you've got to be a touring guide. You got to be good with people. You got to like all these things you got to be great at to be like the top agent, like Kyle Whissel, Kris Lindahl, like George. Like, you got to have all these characteristics. Is that realistic?

No.

Like, does that make any sense to anyone in any other industry? Yeah. And so the notion that they fail at most of those, they get a lot of bad raps for. But it's kind of a hilarious expectation to me. So. And they got to be a good business leader. So most agents. Let's go back to mrea, you you say, hey, you know, you gotta get an assistant. It's your first hire. It's like everyone knows that. I think I'm pretty good at hiring people. I failed way more than I've succeeded with hiring people fast to fire.

I've Heard that so many times from very early stage teams. Again, that agent who's looking to have like essentially a two, three, four person operation, hire someone, they leave. Hire someone, they leave. Hire someone, they leave.

My best producer by encouraging them. Why would I do that? And so I had a director of sales at the time about two and a half years ago, and she was really adamant. I have a staffing agency for VAS and she's like, we just need to place one for every agent. And I was like, I don't hate the idea, but I hate the idea. I like what it provides for them. But like, we can't dismiss the distraction that we're creating. Like, we don't say, go hire your own tc. We say we're gonna build a badass TC department internally and you have to use it. We say, hey, we were gonna build a badass listing management team and system. You, you have to use it. That's always existed here. Most successful teams. That operation is non negotiable. Why don't you have to use our insights? Why are we allowing you to call your own leads and not call them 22 times, slash text, email and have a good marketing brand voice campaign that enriches them and wants them to reach out? Why do we allow you to screw that up? Instead we bully you and we punitively create structure that if you don't do that, you're our worst agent. But what if you're really good in appointment with customer? What if you're phenomenal there and you suck everywhere else? Should we not create a mold that allows you to be successful? Like, why do I want all these different roles from you? And so we're starting to prioritize between that ISA thing I told you about ACE 2.0 and ultimately adding value around the agent is decoupling the agent from having 30 jobs they're supposed to be five stars at. And I want you to be really good with the customer, with our new agent advisor. But I don't care if you're the strongest deal doctor or the strongest negotiator. Like every deal, just bring it to. We have once a day, come for an hour, come listen in if you don't have a deal. And if you do have a deal, ask the question, how do I get the best terms for my client? Like, what should I do? And eventually you'll grow into that. But I don't need you to start that way. Customer experience matters. I think more than anything now do I want incompetent people that don't know that? No, I'm not saying that. But do you have to be our best negotiator in the company to be successful? No. So how do we add more leverage at every spot where it's not the most important role of an agent to us? And how do we pick the best people, put them through our training to at least get two or three characteristics that are really important to us and have them exemplify those really well. And then we'll add stuff over on time as they're here.

Really good. I've enjoyed this so much. I got a bunch more questions, but we'll have those in a non recorded setting. I feel like before I let you go though, I would love to know from you when you're investing time in resting, relaxing and recharging, what are you doing? Or when you're investing time in learning, growing and developing, what are you doing?

You know, I've learned in the last couple years that fun is actually as important as learning and developing and so I'll go with the fun answer. I spent a lot of time fishing, going out in the boat with my wife and catching some halibut or Corvina and just trying to. I'm always on pressurized. I'm always thinking about working when I'm having fun, fun. So I try to spend a little less time programmed into, you know, content or stuff like that and just completely unplug and just relax.

Love it. Is that halibut for dinner or is that halibut catch and release for dinner?

Okay, I'm cleaning and cooking and eating it.

Cool.

Good for you.

Appreciate it.

So much continued success in the year ahead. I love what you all are up to and I really appreciate you spending this time with me.

Thanks for having me.

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