Thank you for helping T3 Sixty create the most comprehensive, accurate rankings available of the nation’s largest brokerages, franchisors and holding companies by annual sales volume, annual transaction sides and agent count in 2019. As we kick off 2020, T3 Sixty has begun its annual work with brokerages, franchisors and holding companies and other groups in our industry to gather, analyze and audit 2019 data as we build out the 2020 Mega 1000 and Real Estate Almanac. Rankings are much more than lists. They provide a glimpse into the relative size of brokerages, franchises and holding companies and provide a treasure trove of useful business data. They provide leaders and executives a clearer view of the industry landscape and a better understanding of the players and insight into who is growing, or shrinking. Better data supports a deeper understanding of the industry and better decision-making. The Mega 1000 data can help firms uncover new business opportunities, recognize and validate new trends, optimize operations and produce actionable insights. In this post, we provide two examples of how brokerages and technology companies can uncover insights using the data. How the Mega 1000 is useful for brokerages Comparing metrics across many brokerages or those with different average home sale prices can create distortions, so organizing the Mega 1000 into segments of comparable, market-leading brokerages or sales price buckets can provide more meaningful insights. In the table below, T3 Sixty created market segments for Mega 1000 brokerages with average sale prices up to $225,000, $225,000 to $800,000 and above $800,000. Brokerages can use these, or their own customized segments, to compare their metrics to top brokerages with similar home sale price points. Brokerage leaders can use the information to understand their strengths and where they need to work, and then apply that to strategic and operational initiatives such as targeted agent training, technology usage and geographic expansion. [ninja_tables id=”42901″] Source: T3 Sixty analysis of 2019 Mega 1000 data Using average sale price is just one example of a metric that companies can use to create segments; others could include statistics by brand, by specific geography, by type of sales model and more. How the Mega 1000 is useful for technology companies Technology companies targeting brokerage customers can estimate current technology spending within segments of the Mega 1000 top brokerages in the U.S., which informs pricing, positioning and overall opportunity. We may intuitively know that brokerages and their agents focus a significant amount of spending on customer relationship management (CRM) systems but analyzing and parsing the top 1000 brokerages – who account for 66 percent of the nation’s residential sales volume – enables technology vendors to make fact-based decisions on how to best position a CRM product with customers. In assessing the market for a technology, a CRM company, for example, must make various assumptions about adoption rates, per-agent and bulk pricing, how prices vary based on usage and how franchise technology decisions and offerings affect third-party technology use and, therefore, the overall opportunity. Mega 1000 data allows companies to apply those assumptions to hard data to help them, for example, estimate the addressable market and decide when, how and if to target certain segments of customers, and at what price point. For example, if we apply T3 Sixty’s estimate that 9 percent of the $4 billion the Mega 1000 brokerages and their agents spend each year on SaaS technology goes toward CRM and other middle-of-the-funnel services, the estimated annual addressable market for a CRM provider comes to nearly $350 million. We can then use Mega 1000 data to refine this estimate. Let’s assume that brokerages and agents within Keller Williams, RE/MAX and Realogy are less promising customer targets within the next three years because of company-provided technologies, then that addressable market drops by half, to $175 million. More than the lists themselves, the data they contain provide valuable chance to better understand opportunities, relative strengths and weaknesses and help drive our businesses and the industry forward. Thank you to all who contributed to the Mega 1000 in the past and for those contributing in 2020. Help us create meaningful and useful data for the entire industry. This extensive 2020 Mega research is led by T3 Sixty Senior Vice President Michele Conn. She can be reached at firstname.lastname@example.org.
Edition: January 2020