Have you ever wondered how the number one real estate teams in the world operate, or how they got to be at the top? If they told you their secret, would you be willing to change your mindset and put their business model into action? Ladies if you are looking to scale your business or exit production ever… at anytime now or in the future … then this is the episode for you! We are talking to Alana Badeaux VP of Operations with The Loken Group the #1 Keller Williams Team in the World.
On this episode of the Agent Exit Podcast, we focus our discussion on the Loken Group’s operations model which allows rainmakers to exit production. Learn how Transaction Coordinators (TC's) and Inside Sales Agents (ISA's) can have a powerful impact on your growth. Listen closely for a key way the Loken Group is giving back that just might be beneficial to your business.
Connect w/ Alana Badeaux & The Loken Group
Resources - www.TLGShares.com
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How To Build A Mega Team And Exit Production With Alana Badeaux & The Loken Group
Before we start, a quick word from our sponsor, Realbie. Realbie is a strange little word with a big impact for your business. What is Realbie? Realbie is part of the Renee Williams Group family of brands for experienced women real estate professionals aged 50-plus. Realbie is a hands-on consulting part of our business, here to help you with operations and strategic retirement planning. That means if you need help with operations, systems, people management, financial well-being and retirement planning, we're here to help you get out of overwhelm and get it done.
If you want to establish or update your systems, your operations or your production model, but you are not sure how to implement that, Realbie can help with that. Do you need help managing, hiring or firing agents, staff or family members? Realbie can help with that. How about getting some organization in your business and personal finances so you can finally begin your exit strategy? Realbie can help with that too. You don’t have to carry this by yourself any longer. Stop procrastinating. Get out of overwhelm. Get a grip on your business or start planning your exit with Realbie. Go to Realbie.com to schedule the no-obligation, no-judgment, no-fear strategy session. We're here to help you have a life and a business that you love.
Have you ever wondered how the number one real estate teams in the world operate or how they got to be at the top? If they told you their secret, would you be willing to change your mindset and put their business model into action in your business? If you're looking to scale your business or exit production ever, at any time, now or in the future, then this is the episode for you. We are talking to Alana Badeaux, VP of Operations with The Loken Group, the number one Keller Williams Team in the world. Here's some background info on this rockstar team if you haven’t heard them already. The Loken Group started as a two-person team with Karina and her husband, Lance Loken, in 2011.
The Loken Group is the number one non-expansion Keller Williams Team worldwide based on units and volume in 2020. They are the number one large team in Houston according to The Houston Business Journal and the number one large team nationally according to Real Trends and The Wall Street Journal. They have been named the number one Best Place to Work in my city, in Houston, several times and they are doing all of this from one location.
We are going to be talking to Alana Badeaux. Alana has been with The Loken Group for years and serves as Vice President of Operations. She is responsible for coaching and training the administrative staff and the creation and implementation of systems and process excellence. We are going to focus our discussion on The Loken Group’s operations model, which allows rainmakers to exit production. We are going to talk about transaction coordinators, TCs, insight sales agents, ISAs and outside sales agents. Read closely about the compensation model, how they are hiring and some key ways that they are giving back that might be super beneficial to your business. Are you ready? Let’s get into it with Alana Badeaux, VP of Operations from The Loken Group.
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Welcome to the show. With me is Alana Badeaux. I want to say hello to Alana. She is with The Loken Group. To give a little bit of background on how I met her. I first saw Alana when she was teaching or doing a training at a conference. It was 2019 at the KW Mega Camp. I was the Director of Operations at that time for a Top Producing Luxury Team at Keller Williams in the Woodlands. I was a super fan right off the bat, all the great information she was providing to the Director of Operations Class. After that, I had the privilege of training with Korina Loken at their office. Korina was doing Career Visioning, which is a Keller Williams Program. I learned so much from these ladies. I had to come and share with the audience. Alana, welcome to the show.
Thank you, Renee. I've never had a super fan. I'm so excited.
Thank you. Can you tell us about you, your role and The Loken Group?
I've been on the team for years. I'm what we call the OGs from back in the day. I was the tenth hire and now we have about 96 team members. In the years I've been here, we have experienced some massive growth, which is awesome. It comes with a whole lot of systems and processes along the way. I started out with the team. We didn't have an ISA department at the time. I was answering all of the incoming phone calls and was responsible for routing them, where they needed to go. We had one burgeoning new construction builder account. At the time, I was responsible for managing those listings, but it was primarily front desk type of receptionists' responsibilities. Over the next couple of years, we moved into listing coordination for our resale listings, then contract to close for our resale listings.
People have different needs at different points in their life.
At one point, we had an amazing listing agent on our team named Britney. Her goal was to close 200 listings in one year. She was not going to stop until that happened. We ended up pairing off one-on-one together and I handled all of her listings from agreement signed to close. It worked out so well. We scaled that model across our whole business. That's how we have everything set up, which has been going well for us, both from a communication perspective, as well as a client experience perspective. I'm in the VP of Ops role. My primary responsibilities are coaching and training our administrative staff, as well as systems and processes, creation and implementation. I'm constantly looking for gaps in the business and things that we could be doing differently or better to serve both our clients internally and externally. Then figuring out how to fill those gaps. It's not sexy to a whole lot of people.
It is sexy to me.
It’s what makes the engine run. It's one of those necessary things.
I love operations. It is the engine. It is the motor to your business. You can't run it without it. People love sales. They love marketing. That's all pretty and sexy and everybody wants to get on a video and be in front of everybody. At the end of the day, your systems, processes, operations are what make your business go and grow. It's not about sales. I have so much respect for you and for what you do. As far as the company is concerned, you guys have a beautiful beginning, middle and where you are right now. How did you start? Can you tell us how you have evolved to where you are now?
I might be jumping ahead a little bit. I wanted to mention TLGShares.com. It's a website that we host tons of materials. The reason I bring that up now is we share that with everybody and it's free. All you have to do is log in with your email address and you have access to all of these resources. One of those things is our Org Chart all the way back from when we first started out. You can see visually the progression of what our team has come through back from 2011 all the way to now.
I've seen it. It's phenomenal to watch the growth.
Lance is a freak of nature. He likes having his org chart planned out for the next ten years. He always has. It's a cool resource if you want to see it. I think we speak to a lot of people where we're at in our business now and they go, "It's like drinking from a fire hose. You have so much. We're a small one or two-person team. We're just getting started.” That's okay. We were there once too. It’s interesting to see that progression. I'm glad you asked the question.
Lance and Korina, they started the team together. Back in 2011, they’re a husband and wife team. Their first hire was their babysitter. I'm sure a lot of agents starting out. They didn't have a lot of cash on hand. They were staring their business and they quickly learned like, “We're not paperwork people. We're not the dot all the i's and cross all the t's people. We need to leverage that out to someone.” The first person they hired was on a part-time basis. It was their babysitter. They paid her like $100 a week. It was what they could afford. She took care of their compliance and their documentation and things like that. The next hire that they brought on was a full-time TC. She's still with our team. She is amazing. She's had several different roles over the years as well.
TC is Transaction Coordinator. Sometimes we have new audiences. Most of our audience is very experienced, but I like to explain in case.
That's perfect. Sometimes I take for granted that not everybody knows all the lingo all the time. I appreciate that. We hired a buyer agent. The Loken’s weren't following the millionaire real estate agent model at the time. They first thought like, "We're going to work with buyers.” It wasn't until the 2nd or 3rd year in business where they’re like, "We probably get some listings because leads listings leverage.” I would say, "They got a buyer's agent." As the business scaled, we were doing some part-time.
We hired out marketing for twenty hours a week. Everything happened organically as the need arose. I think we sometimes fall into this trap of, "I have to have a full-time person by this time.” Thinking about what would have to happen in the business to merit bringing that person on. Of course, holding those roles and those dollars to afford a one ROI, like you would any other marketing dollar in the business. It was about probably our fifth year in business that we started our ISA department.
We brought in our first ISA. She was basically outbounding, doing all the cold calling. She was on a strictly commission basis. That's how we afforded that at the time. We gave our agents lots of leverage because they were taking down leads and Post-it's in their car and throwing it in the backseat and never talking to them again. We recognized that was an important element to our business. We've never stopped growing from there. That's how we grew.
For everybody that's reading, the secret sauce for the team is the ISA. I don't know, Alana, if you agree with me on that but that is how you put rocket fuel into the tank of your business. By having someone who is based on commission. You're not spending a whole lot of money on this person. They are incentivized to do well. ISA is an assistant. If you're a smaller agent, you don't have a large team. That's the way to go to the next level. Do you think so, Alana?
I 100% agree. I think there are a couple of elements to that. One, we started out on a strictly commission structure for our ISA. We have since moved to a base plus commission, which works for us. There are different models out there that you can test out for your particular business but I agree with you. In general, for our great agents, they are not naturally great at follow-up. They'd much rather be face-to-face with people. They would much rather be building those relationships. That's where their strength zone is. Whereas if you're hiring someone specifically for this ISA role, the fortune is in the follow-up, as the saying goes. Their sole job is to pound the phones, manage those incoming leads, route them accordingly, set you up on your appointments. They're doing that behind-the-scenes work. The question we get a lot is like, "How do you hire that person? Who wants to do that all day?” I know you're not in your head.
That's the question. It's hard to believe that somebody has a personality that's different from mine that would rather sit and pound the phones than get out in front of people and talk. For that, it's a paradigm shift in your mind to understand that there are different types of people. Everybody’s not like me.
People have different needs at different points in their life. Some of our ISAs originally thought, "I might like to be an outside agent eventually,” then, they had a baby and they need their nights and weekends back to themselves. We might've had somebody who was an outside agent and said, “My priorities have shifted a little bit. I'd like to not work every weekend.” ISA lead gen is more for them. Some people are unicorns and they love it. They love being on the phone and making those connections. They are not afraid of hearing no. They're super gritty and they'll go until they get a yes.
I'm referring back to TLG Shares because that's where you can get the description, is that right? You have so much. You have a wealth of information. I'm trying to remember all the stuff that you all have there. There’s so much.
It’s all the things. We have, I believe, all of the job descriptions. What's great is we get requested a lot is our Hundred-Day Training program for our ISA department. You can go rip off and duplicate how we're training our ISAs to perform at the top level.
While we're on the topic of staff positions and roles, can we talk a little bit about the org chart and what the titles are for the positions? If there's a way to curtail that to maybe stay within sales-focused because I know that you may have different departments that do different things. Share as much of that as you'd like to.
I will do my best to keep it as relevant as possible. To start out, we do have a full marketing department in-house. It started out with one person. It's grown. If you're going to look at our org chart, you're going to see that. That's not typical. I don't want to make anybody feel like that's necessary. There are amazing freelance marketing people out there who can help you with that. With that said, on the production side of the business, we have the ISA department, which the bedrock of what we do. They are churning and burning leads all day, every day. Our outside producers do not do lead gen at all. That is the ISA’s role.
The outside producer’s role is to go on appointments, convert to a signed agreement. We get them under contract, then we get them to the closing table. We have buyer agents and we have listing agents. We don't mix those in general. Every now and then, we'll crisscross. For our business, we found that a certain personality style does well as a listing agent. A certain personality style does well as a buyer's agent. They're two very different transactions. You'll see that on our org chart. In our operations department, we have, of course, your standard buyer transaction coordinators, your listing transaction coordinators and we have some photographers on staff as well. That's the high-level view of what our org chart looks like.
It's all about the value. Price is only an issue in the absence of value.
For those positions, Keller Williams has a specific program that I know that Korina is an expert in. As far as interviewing career visioning, how to select the right people, can you give us a snippet or a general overview of what does that look like? Often, it's hard to pick the right people to put in the right seat on the bus.
It's a good question because something that we get a lot is, "How do you know you're hiring the right person? How do I avoid turnover? How do I grow my team rapidly, but also successfully?" Keller Williams has put together this incredible program called Career Visioning. It's about a 7 or 8-step process, which feels daunting. Sometimes it can take 6 to 8 weeks for a candidate to go all the way through this program. What I will tell you is our attrition rate is low. By the time we've spent that much time with a person, we know that this business partnership is going to be as much a benefit to them as it is to us. That's important. We are vetting out their natural tendencies. The way they want to be led. What's their experience like? Where do they want to go in the future? That's one of my favorite interviews to do with potential candidates. That’s what we call the motivation interview.
We're talking to them about, “Tell me about what your life looks like five years from now. Tell me what would make that awesome? What does that look like for you?” We want to understand what motivates this person and our business can grow to the point that would encompass their goals as well because it's not always about us. It's never about us, if we're being honest. One of the other big parts of CV or career visioning that I think a lot of other hiring processes overlook is what we call the culture interview or the group interview, where they get an opportunity to meet with multiple members of the team.
If you're a small team, maybe that means both of you or all three of you and you go to lunch. You're vetting out, "Does this person fit with our mission, vision and values?” We found that 90% of the people who have deselected themselves from our team. When we look back on it, it was a values mismatch. By digging into those, we are much more likely to hire people who fit our core values of a gritty, solution-based, team player, servant leader. We've got to be clear about those elements and we hire people that are like us.
You are masters at this. As far as the compensation is concerned, does that play a large role in a candidate’s selection or candidate’s decision to stay with you, guys? Do you have a specific compensation model that you use for each role?
We are very intentional. Lance is a former CFO. He has the financials wrapped around his finger. You will never pry it from his hands, the financial piece of our business. He's very serious about it. He has three very large screens in his office and they're covered in Excel spreadsheets at all times. What he's looking at is the profit margin. We want to make sure that we can continue to stay in business. We pour a large portion of our profit back into the business so that we can continue growing not just a business but also the people within it.
We're looking at on each deal, we want to have at least or no more than 50% being paid out in commissions. Typically, our ISAs make 10% on every closing that they were the procuring cause of the lead. Our listing agents make 15%. Our buyer's agents make 35%, unless they have additional leverage then it changes a little bit. That's also factoring in the salaries of the transaction staff. Lance has been very intentional with his pay structure. I think a lot of people probably hear 10%, 15%, 35%. How do you keep people? It's because we have built our business that it benefits them to take a lower split. They can make more at the end of the year because we're keeping them in their strength zone.
I remember our buyer's agent. He used to be on a 50% split. When we first started the ISA department, Lance came to Sarah, who is now our VP of Buyer's Agent and said, “If you never had to lead gen again,” and I don't even think she heard him after that. She was like, “Whatever it is, the answer is yes, I'm in.” When he said, "If I can show you how you can make more money by taking a commission split because I'm bringing on an ISA, how open would you be to experiencing that?” She was like, “I'm in. You got me.” It's all about the value. One of my favorite sayings is price is only an issue in the absence of value. If your agent is saying, “Split’s too low. I'm ready to leave because I need more money,” then we haven't provided enough value for why our split is that percentage.
For everybody who's reading whose mind is blown by these splits, let's talk volume. Can you give me an overall sense of what your volume was for 2020?
For the team as a whole, we closed around 2,500 units. Our listing agents, in general, close between 100 to 120 deals a year. Our top producing agents can close up to 200 deals a year. Our buyer's agents, they average between 60 and 80 deals a year. Usually, it's somewhere between 4 and 8 closings per month. We're doing a high volume. They're so leveraged efficiently that they can stay in their strength zone and still make money.
I wanted to point that out because for those who are reading, you understand the splits don't matter because the volume is there. The way that the entire operation, the systems, the processes all contribute to everyone being in this synchronized dance of this great operations machine that you have going. The splits don't matter. If the agents are looking for more money, you're adding value, long story short.
I will say, going back to the career visioning process a little bit. We don't hire a lot of established real estate agents. Some that we'd have on the team in the past, they're starting out or they've done a couple of deals, but in general, we hire people from completely other industries. They're not coming in with any expectation around what commission splits should or could be. They know, “I want to make $120,000 next year. How am I going to get there?” If we do have someone interview with us who's talking a lot about what's the splits, etc., we might dig a little bit deeper because that might not be a great fit for us.
You know who you are and it's important that they know what they need. What about challenges, Alana? Are there any challenges with the way that your team model or your team structure is set up?
As with anything else, I'll be fully transparent. It's a couple of things. One is because we've experienced such rapid growth in the past years, we outgrow some of our systems and didn't replace them as quickly as we probably could have or should have. One of those is the way in which we communicate with each other. The faster we've grown, the more siloed we've become as departments. The ISA department has their tribe and the Ops team has their tribe and etc. Communication between those departments has suffered a little bit.
We’ve had to be intentional about how we bridge those gaps and make sure we are all rowing in the same direction. When you're a single agent, all of the information about a client or a file lives in your head. When you are a team of 96 people, you have to figure out how to systematize that. How do we get that information out of the agent's brain and into the system such that anyone on the team has access to it? That's been a huge learning experience for us.
Culture is always challenging to scale. You have to be very intentional about it. We made a couple of bad hires, not long ago and we felt the ramifications of that. I think we're finally coming back around. We've got serious about accountability and what that looks like and our core values. It's coming around. We're not without fault. I will say that openly.
It's good to be transparent. You guys share so much information. Not just knowledge information, but experience information as well. I want to thank you for that because there are so many people who see from the outside that you guys are big. You're this mega world-infamous team but not understanding your challenges. We see it as great and how perfect it is. It's good to know that there are learning opportunities for everybody, no matter what level that you're on. I think it's inspiring that you share that.
I appreciate you saying that. One of our mottoes has always been like, "Ask forgiveness, not permissions." We experiment a lot. We fail fast and we often fail because we understand those things to be learning opportunities and growth opportunities and keep pressing forward. I think that's why grit is probably one of our core values, is because we don't let setbacks stop us from our ultimate goals.
What about good things, positive things? How has this model served you well as far as your units, volume closed, other ways that it served you well?
We could probably turn this show into a drinking game around how many times I've said the word leverage. That truly is one of the greatest things about our model. Everybody gets to stay in their strength zone. We're not expecting our agents to be marketers or admin or photographers. We are truly able to serve our clients at the highest level because each person is a master at their role. I will say that our culture is one of our greatest competitive advantages.
We operate very much like a family in many ways. It's like the shirt off my back, if you need it. We'll drop everything. We experienced a little hurricane called Harvey. I'm sure you remember that. Our business shut down for two weeks to serve our community and make sure that our clients and our staff were taken care of and all of that. I do think this is a very unpredictable industry. One of our advantages to our team structure is that no matter what happens, we're going to persevere because we pull each other. It's a team effort in everything that we do.
Culture is always really challenging to scale. You have to be very intentional about it.
How does it show up financially for you guys, Alana? I guess what I'm looking for here is what type of dollar volume are you doing with this particular model?
We did, I think, $600 million in 2020. We're doing quite the dollar volume. Agents, in general, put a lot of emphasis on folium. They don't put enough emphasis on profit. You can make $700 million in one year, but if you made $20 million, it's time to re-evaluate some things. That's one of the things we've got serious about, is understanding the profit side of the business. We implemented a profit share program for our team. When we do a certain dollar amount in profit, that trickles back down to the team members. We want everybody to feel like owners in the business. While I do think there is merit in talking about volume, I do think it's also important to talk about profit often as well.
Thank you for that. Let's talk about giving. You guys give so much back to the real estate community. I'm aware of that because I'm a recipient. As a Director of Operations, I can't tell you how many times I've leaned on some description or some model that you guys have shared on TLGShares.com. Tell me more about how that came about? Why did you create it and how is it being used?
We have always said one of our biggest goals is to raise the standard for the industry as a whole. We want people to put real estate agents on the same professional level as doctors and attorneys and other highly respected professions. Rising tide lifts all ships. The more that we can share with our agent community, the higher the bar raises for everybody. We have always believed in sharing best practices, resources. Anything that we can do to help our fellow agent makes our job easier.
Even in our market, if the coop agent is as knowledgeable or as experienced, it makes our job easier. We see that as a win-win. A few years ago, people kept asking us for the same things over again. We're like, “We're going to drop this on a website somewhere. Everybody can go in and rip off and duplicate,” and it's grown from there. It's been amazing to hear from people how we've helped them grow their business.
You have helped people grow their business all over the world, I'm sure. As far as giving back to the community, I saw that on your website, some local things that you guys are doing are great. Can you touch on that a little bit to give agents maybe some ideas of things that they can do if they want to give back in their local community?
We have a nonprofit, a 501(c)(3) called TLG Gives. We do two major projects a year. One is typically in the summer, we take a deserving family in the Greater Houston area and we renovate their home. We didn't do it in 2020 because of COVID. In 2019, there was a family. The gentleman had been in assisted living for three years and couldn't come home because the house couldn't support a wheelchair. We completely remodeled the home to be ADA compliant and changed their life. It was such an inspiring, amazing project.
Around Christmas time, we do an Angel Tree Project where we choose 6 or 8 families in the Greater Houston area. We do gifts for them or we get gift certificates, anything that they need basically, which is also amazing. Then throughout the year, The Loken Group donates $50 on behalf of every team member to their favorite charity on their birthday. We're such a giving organization. I feel like we've seen that come back to us tenfold in many different ways.
That's why I wanted talk about it because I think we would be remiss not to mention the fact that you guys are doing very well, but you give and you give so much back to the community. To whom much is given, much is required. You own that in every single way. I want to congratulate you guys always for the great work that you do. Thank you for coming to the show and for everything that you've done. Is there anything else that you would like to share before we go?
I feel like we covered so much ground. I would direct everybody to TLG Shares. Please share my contact information if anyone ever has questions about operations or systems or processes. My doors are always open. Truly, I will respond to your email probably within a few minutes of receiving it. I'm happy to help however we can. If you get value from anything that we've shared, either now around TLG Shares, we would love a donation to TLG Gives. One hundred percent of those proceeds go back to the Greater Houston area. We do not keep a dollar of that money. Of course, rate us on Google. I got to do the shameless plug for rating us on Google.
Every agent should be on Google. I don't care what you're doing. You got to be on Google. Alana, thank you so much. I appreciate the time. I look forward to talking to you again soon.
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About Alana Badeaux
Alana has been with The Loken Group of Houston, TX for 8 years and currently serves as Vice President of Operations. She is responsible for coaching and training the administrative staff, creation and implementation of systems, and process excellence. Alana is passionate about building trusting relationships with customers and colleagues by maintaining a strong, positive culture and motivating teammates to meet high-performance standards.
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