The Wright Brothers is a company with two main product divisions, one of them assists Keller Williams market centers in recruiting new agents and the other focuses on building web applications for real estate agents and brokerages by providing a tool called Wing Wire, which is an auto blogging platform for individual agents. Wright and his brother became involved in this industry during college when their parents, who had been in the industry for over 30 years, recruited them to transition their business to be run entirely online in order to save themselves over $100,000 in offline marketing campaigns. Over the next year their business doubled and continued a steady growth, catching the attention of their friends and colleagues. Everyone they set up saw similar results and clients became more frequent, which prompted the brothers to pursue this as career. Today, their annual revenues average around 1.4 million annually and with a new product division in the works, they’re expecting to be around the 4.5 million mark by the end of the year. When asked about their company’s core strengths, Wright stressed the fact that customer service and being available to his clients, especially in the beginning, as well as staying ahead of the curve by predicting the next big thing they can offer to their customers, really pushed the company forward.
1) Finding the need in the market is the core of entrepreneurship
- What methods did you use to figure out the need of your business in the real estate market?
“There was really no method; it was a series of hundreds of personal conversations. We did have the opportunity to meet with our customers one-on-one, for the first thousand clients, so we were there at the point of sale. Then we would talk to them whenever they had support questions, feature requests, or features that were confusing to them; or if they had comments about features or content they didn’t like. There was a series of thousands of those smaller interactions; you start to develop pretty good intuition for what your customers are thinking and what they want so there was no system in the beginning. Over time, however, we did become a more results and data driven company; we collect a lot of information One of the benefits to acquiring 100,000 realtor leads every year is that we are the first ones to see the new people coming into the industry, therefore, have the opportunity to develop a relationship with them immediately. We have all sorts of surveys and analytics that really determine not just what the agents of the day are thinking but the agents coming into the business of the day. These are the ones who will be running the industry 3-5-7 years from now and we’ve used those strategies, a lot, to think about what we want to do next.”
- Why is what you do a key part of any real estate company’s infrastructure and growth?
“Your company is only as good as the people who work there and we’re the one’s who stack your company with new employees. There’s no doubt about it that we are one of the core services that you need if you want a thriving market center within the Keller Williams family. This is how all real estate agents’ components and compensations are considered as well; they want to break even with their company, they want to survive in that role, they want to continue to make more money. The reason that the vast majority of top tier agents perform so much better from your average or below average agents is because they have a high level of repeat referral business. We’re giving you a way to capture repeat referral business online, which is hugely important. If you want to be a top producing agent, you’re not going to be able to do it on your own; there aren't enough doors you can knock on or dinner parties you can go to, to meet new people that are buying and selling their homes. You need to be somebody who is understood as a resource within your community that everyone’s worked with in the past, wants to work with you again and also wants to refer you to 3-5-6 of their friends, and we’re the means by which you could do that online.”
- How do you continue to evolve, as a company, to match the needs of your market?
“Fortunately, we’re in a good growth trajectory right now, which means we get to bring in new talent frequently. When you bring in new talent, they always bring in new perspective, new ideas, new technical resources and all of that helps us get stronger and better as a company. Beyond that, a huge part of our ethic and who we are as a company is always, again, trying to look ahead to see the next thing we could do for our company. It has to be an on-going conversation, day in and day out, ask yourself, ‘what is the next stage for us?’ and ‘what is the next thing we can do for our customers that’s going to blow their minds?’”
- What tips can you give other CEOs around this topic?
“One of the things I’ve learned over time, and these are some mistakes made early on, is that we would have these grand ideas of a big things we wanted to do; we spent a year on development, we launched it and it turns out we miscalculated about some areas. Now, we just get a basic proof of concept out on the market, see how people respond to it and have our customers evolve our products for us. I’m much more likely to do something small, get it out on the market, see how customers respond and then build on that. Furthermore, we keep a continual dialogue between what we think our customers want and how they respond to what we put in front of them.”
2) Providing performance and results is the only thing that matters these days
- Why is delivering value and performance the only thing that matters these days?
“The big thing is that customers today have so much more information at their fingertips because of the internet; there are no low information customers anymore. What that means is that you can’t really survive as a company if you’re not really out performing your competition, sooner or later people are going to figure that out and these days it’s much more likely going to be sooner rather than later. This is why you have to stay continually focused on, not just value of performance, you also have to be focused on out performing and providing more value than your competitors who are trying to do the same thing. So, it's not just getting better, it's getting better at an accelerated pace.”
- How has this changed over the years, if you believe it has?
“It has and I think the main driver of this change is the internet, which has given so much more information to people and it makes the decision cycle and thought process for customers much more abbreviated. Before the internet, I was with a company that was underperforming for a couple years before I started shopping other options. Now you only get a couple months, maybe, before customers start shopping elsewhere; there’s just so much at their fingertips, it’s so much easier to make a switch. Customer loyalty is much different now; people fall in love more quickly but they fall out of love a lot more quickly too.”
- In what ways have you been able to create a company culture that is focused purely on creating value for your clients?
“The biggest thing is becoming more of a data driven company. I think every company, at their core, thinks they’re focused on providing value for their customers but if you don’t have hard data around that, do you really know if you’re providing value to your customers? We remove all the conversations about our opinions and what our customers think of us so we’re able to see what they’re behaviors are in real time, and respond to that. The goal is getting real numbers so it turns less into a question about values and opinions, and more into a math equation. The more you can turn a business from just a set of conversations into a set of formulas, calculations and math equations, the easier it is to drive value to your customers on a consistent basis.”
- I understand that you have a free trial, how does that play into all of this?
“If there’s a free trial, it’s huge, because it changes the first conversation you need to have with a prospect. Where, in the past, the first conversation we needed to have with a prospect was trying to explain to them what was so great about our company, why they were going to love it and how we measured against our competitors. Now, all I have to do is sell them on the idea of trying something free for 30 days, which as you can imagine, is a much easier sales pitch to make: try it, see if you like it, get hooked on it, then if you want it you’ve got to pay for it. There’s also a lot bigger level of trust when somebody is used your product before they have to write you a check or give you their credit card information. That level of trust is huge in everything that we do over those first several months, really building a relationship with our customers.”
3) Retention of clients and customer service is KING
- What best practices can you share around customer service and retention?
“This is one of those areas where we’re really undergoing transformation in how we think about this. In the past, our model has always been focused around constantly being available to our customers, even if they want to call me at 8:00 on Friday night. What we’re realizing now is that, while I think that was a great stage for us early on in our business, it’s just not as efficient anymore. If we look at the 80-20 principle, 20% of your actions account for 80% of your outputs, we’ve noticed that it’s really more like the 95-5 rule in terms of customer service, which is that 5% of our customers account for 95% of our service load. Every time I take a 30 minute phone call from one customer, that’s 10 emails I can’t send to 10 other customers. Therefore, we’re really trying to get away from taking every customer’s phone calls all the time and instead, turning into a really smart, systematic support at scale. It’s an experiment we’re undergoing now and I’m optimistic that the results will be good; in the past, however, we’ve retained customers by being the most available, the most cooperative, the most patient and the most responsive to them in any way we can.”
- Why is this such an integral part of being successful, as an organization?
“It really just comes down to the numbers. It’s 10x more expensive to acquire a new customer than to retain an existing one. When you figure that out in terms of organizationally, do you want to have a ton of people continually making sales calls or would you rather have a support team that’s taking care of its existing customers? This is particularly true in our residual income, subscription based business, somebody pays us just as much in month nine of their contract as they do in month one. All the service load comes up front; therefore, we would much rather take care of our customers and hold onto them. The only way you can really build a sustainable business that allows for continual growth is by making sure you’re keeping customers happy, which keeps them giving you checks for a long time.”
- Why do you feel certain companies don’t excel in this arena?
“The biggest thing is that they don’t understand their customers; I see so many times when companies have broad assumptions about their customers. We’ve been guilty of this in the past as well, and again, everybody wants to retain customers but if you have broad assumptions about why they’re with you, why they’re staying with you and the lack of other options available to them in the market, then you’re going to come up with flawed retention concepts. The companies that are really good at this make an effort to understand their customers as intuitively and exclusively as possible because it’s what really creates these retention all stars.”
- What additional opportunities have you noticed come from being great at this, as an organization?
“The best example I can give of this is the reason we have two product divisions right now. We started with a single product division and because we took such good care of our customers, one of them came to us and said, ‘I have a new idea for you; there's a ton of people that pitch to me all the time but I want to be in business with you guys. I know you don’t have a solution yet, how much do I have to pay you to develop it?” What he suggested wasn't even in our skill set but because he saw the way we took care of him in the other division of our company, he was willing to fund a new division, which is now our most profitable. That was something that would have never happened if we hadn’t really focused on taking care of our customers and retaining them.”
- Any other gems you can share around this topic?
“This kind of goes in line with trying to understand your customers; it’s equally important that your customers understand you and they understand why they’re doing business with you. It’s a two way communication so if the promise you make to customers is that you’re always going to have the lowest price, make sure they understand that. It’s one of the reasons why Southwest Airlines does such a good job of retaining their customers; people understand that they’re not with Southwest Airlines to get the best service, they’re with them because they get the best price. Since they make that very clear to their customers, their customers don't get angry about some of the things other airlines have been really frustrated about because of convoluted value propositions. Travelers are not really clear about why they’re using Delta Airlines, is it because they give you a certain level of service, is it because of their pricing? They don’t really know and because of that they could become angry at what is Delta providing. With Southwest, they’re really clear about what they’re giving and that's one of the reasons why they’re great at retaining their customers. Therefore, it’s not just about understanding your customers, it’s about making sure they understand you.”
4) Keeping things simple is how you create scalability
- Why is this such a big part of any project your company develops?
“Complexity is a natural part of business, everything gets naturally more complicated as time goes on and if you start with a complicated model, you’re going to end up with an unmanageable rats nest within a couple months. If you start with something simple, you’ll still be managing and dealing with complexity at an increasing rate as your company grows and as it takes on new customers and new challenges, but it shouldn't be unmanageable. You have to stay focused on simplicity just to fight against that natural complexity that creeps into any business.”
- Why is this such a big part of being a CEO?
“The biggest thing an executive can do for their team is continue to simplify as there’s only so much bandwidth that a human or team has. If you want to be doing more and serving more customers, you have to find ways to simplify things for your team, otherwise you’re just going to be burdened by all of the complexity that starts to cloud your judgment. You have all these conflicting interests within an organization; therefore, the more a CEO is a lead blocker for the team by getting all that complexity out of the way, the more employees are able to focus on real challenges and opportunities in front of them, without getting distracted. I think those are the teams that really function at their optimum level.”
- Can you share any best practices around this topic?
“One of the things that we’re really good at is we run great meetings. Our meetings start on time, they have a very clear structure to them and they end on time. Everybody has input on the agenda before they get there and everybody knows exactly what’s going to be talked about as we have very clear parameters and every section is defined; afterwards we have a follow up that goes out to each our team members immediately. By doing that, nothing is caught in the pipelines; we know that if we have a problem we can solve it effectively, efficiently and consistently. Because of that it really settles the team as they know we’re going to have this weekly meeting where everything that has built up over the last week will be cleared out when we get back. This practice really simplifies our business a little bit more, every week.”
- Do you have any stories to share where focusing on simplicity has been the difference in being successful?
“We had a big breaking point in our business. My brother is my partner and for a long time it was just the two of us; his focus has always been sales and mine has always been more on the development side. In the early days of our business, we had all sorts of things to manage, just the day to day stuff you have to manage with a business, and we split those responsibilities up because we thought that was equitable. We got to the the point where we were getting to the end of the year and we had a big tax bill that was going to be due and the only way we were going to be able to pay it was if we had a huge quarter of growth. Because of this, we decided that Corey would focus solely on sales and I would do everything else. What happened was his sales went up 500% over the next three months; we realized that this strategy was the missing piece in our business. From that point forward we've said everybody in our business does one thing, nobody does two things and it's worth it to do that. Getting that simplicity and clarity for us has been huge, we really try to simplify it to where each team member has one single responsibility.”