The Real Estate Dish: 20 Minutes with Steve McKee of McKee Wallwork + Co
Join QuantumDigital’s EVP and CMO Eric Cosway as he gets the latest dish on real estate trends and technology with Steve McKee, Co-Founder of McKee Wallwork + Co. Steve is one of the co-founders of McKee Wallwork + Co, which is an integrated advertising agency and marketing consulting firm based in Albuquerque, New Mexico. With more than 3 decades of experience as a leading brand strategist, Steve is also the author of award-winning books When Growth Stalls and Power Branding. Under his leadership, the company has received industry accolades, such as it’s two-time recognition by Advertising Age as “Southwest Small Agency of the Year” and one of the “Best Places to Work in Advertising."
Eric: Steve, welcome to the podcast.
Steve: Thank you, it’s blessed!
Eric: Can you give us a little, brief overview of what your role is and what you do at McKee Wallwork + Co? I have a pretty good idea, but I don’t know if our listeners do.
Steve: We were born, 22 years ago now, as an advertising agency. You can think of us as you would think about most advertising agencies. But we’ve really evolved quite a bit, particularly in the last few years, to the point where we consider ourselves a marketing advisory firm. And that’s not just semantics. Our task for our clients has evolved largely, from focusing on how they go to market with their messaging to how they go to market with everything—their product mix, their service mix, even their business model. There’s so much change in the wind these days that we’re helping clients increasingly modify their business models. So, we’ve gone from what we used to call “Little m” marketing, which is what the marketing department does, to “Big M” marketing, which is using the marketing philosophy to redesign how companies go to market. And we’re having a blast doing it.
Eric: Oh, it sounds like it. So, would you say you’re best known for that? Or what would you say you’re best known for with the legacy of the firm?
Steve: Yeah, well our reputation is… the shorthand we’ve come to is generating new momentum for stalled, stuck and stale industries. And that dates back to my first book, When Growth Stalls—which came out 10 years ago now—which really set us on this new course. And so, people often ask us, “What do you specialize in?” And my answer is, “It's not a ‘what’, it’s a ‘when.’” And, when you run into the rapids, when you run into rough waters or you’re not sure where to go or what to do, we’re the ones to call.
Eric: Fair enough. I’ve read that you also have another book, Power Branding. Can you give us a little bit of insight about Power Branding?
Steve: Sure. It’s 75 best practice principles that we’ve gathered, really, over the course of my career. And the best compliments I’ve gotten about the book is that the chapters are really short. So you can nod off in bed reading Power Branding and not feel guilty about it. Because you’ll probably finish the chapter. 75 principles, that’s a lot. But when the chapters are two and a half pages long, you can kind of imagine. It was a blast to write. They’re evergreen, these principles. And I think it’s a good read, but it’s also a good reference book just to thumb through. And you’ve had it for several years now.
Eric: And I’ve even made it through, and I’ve taken notes on it.
Steve: There you go.
Eric: And I didn’t fall asleep either, so I’m very proud of that. So, I’ve known you for a long time. You’ve done… in the last probably 5 or 7 years, you’ve done more and more work in the real estate sector with brokers, and they’re looking at their brokerages… what’s surprised you the most about this industry?
Steve: You know, there’s a couple of things. One is… I don’t know if it’s a surprise, but it’s something I learned… is how incredibly, if I could use a term, “commoditized”, it is. That real estate, generally speaking, is a local industry. And you know there are some seriously big national brands. But it has to do with local market. Every market is different. And yet, so many of the brokerages are very much the same. And how that manifests itself, in how they go to market, is the fact that they’re often competing on price. And that can manifest itself in different ways, as well. Because, obviously, the homeowner is the ultimate determiner of what the price is. And I’m not so much talking about the price of the homes that are bought and sold. I’m talking about the commission splits, and I’m talking about the fierce competition for agents, which is really just another manifestation of competing based on margins and price, which is the hallmarks of a commoditized industry. And we’re seeing some change. And we both know some brokerages that are doing some pretty exciting things. But, generally speaking, I think the industry is really ripe for business model redevelopment and redesign, and some significant advances.
Eric: So, do you think that what you’re seeing in real estate is unique? Or do all verticals face this at some point or another?
Steve: Yeah, the agent piece of it is kind of unique, because having your bread and butter be independent contractors, that’s somewhat unusual. But, other than that, largely the same issues. As we look at the business cycle and companies that go through acceleration and maturation, and then saturation and commoditization, the real estate industry is suffering from the same issues that every other industry does when it’s in that sort of saturation/commoditization mode. And one of those, unfortunately, is denial. Companies are often unable or unwilling to recognize that things need to change. We’re all subject to that. Because, especially successful entrepreneurs—and most brokers are successful entrepreneurs—you kind of do things a certain way for a decade or three. And so it can be hard to recognize sometimes when it’s stopped working or it’s slowed down working. Maybe there’s a change in the offing. And as I’m fond of saying, which you’ve heard before, is “Your business does not have a brand, your brand has a business.” Which simply means, the reputation that a brokerage has and what it means in the marketplace is what’s important, not the specific model it uses to go to market. You should hold that loosely in your hand. I think, once companies that, again, like every other sector… you know, the weak get eaten, the strong get stronger. And sometimes the way to get stronger is to recognize that a change is in the offing.
Eric: Do you think, in this industry though… I mean, if we look at the regional players—the second generation, third generation families that are driving the business now—do you think maybe they’re resting on their laurels of the brand’s been an anchor in the community for a long time, and it’s just part of the fabric?
Steve: Sure. That’s what makes it difficult. Because they are very well-respected brands, and they have been in the community a long time. Many of them are closely-held family businesses, and so that’s your father’s, or your grandfather’s, or your mother’s name on the door. And sometimes your father, your grandfather, your mother, your grandmother are still around. They have an office. And they have opinions. And, gee, if you’ve built a business for 40 or 50 or 60 years, you’re telling me that I need to change? Right? So, that’s something that’s, again, somewhat unique to this industry. Because it’s so reputation-based. And, I guess what I would say is, just because you have a great reputation doesn’t mean you don’t have to change. Again, you don’t want to depart from your reputation. You would never want to do that. You want to keep building it. But how you go to market, you should be open to change.
Eric: So, my sense is this, and maybe you can comment on it. A number of the brokerages that I’m aware of, when they’re faced with change, they go through a rebranding exercise. Kind of change the look and feel. Give us your commentary on that. That doesn’t feel like enough to me. If I’m going to dive deep into marketing advisory service, I’m going to just do more than my brand. Correct?
Steve: That’s right. And part of the problem is because we all use the term “brand” and we mean different things by it. You know, when you talk about your branding, you’re kind of talking about your logo, and design, and so forth. When you’re talking about your brand, you’re talking about everything, the substance of what you do in the marketplace. So, many rebranding efforts are… perhaps a great way to look at it would be like, when you reskin your website, you know you don’t really change any of the underlying technology or the links, but it looks different, that’s what often gets called a rebranding. And sometimes that’s all that’s required. But other times, you need to rearchitect your website, you know look at it with fresh eyes, do some user experience testing. When we work to rebrand clients, we kind of pull the engine apart and put it back together, rather than painting the car. It just depends on what’s required at the time.
Eric: Have you seen anything in real estate marketing that you’ve liked? Or was a bit of an “a-ha” moment for you that you thought, “That’s a good practice. That firm really knows what it’s doing.”
Steve: Not as much as I would like. I think most of the innovation that you see, certainly through the marketing lens, comes from the disruptors, you know the Zillows and the OpenDoors and the Purple Bricks, and I mean they’re having varying degrees of success, and they’re having their issues, and I’m not commenting so much on that. I’m simply saying, when they go to market, by definition they’re a new concept. And so, by definition, they’re thinking about it differently. And, by definition, they have to grab attention and awareness. And so they tend to be more creative. I think the real estate industry… it’s kind of interesting, because while on the one hand it’s mature from a business model standpoint, and being commoditized, it’s remained fairly immature from a branding standpoint. When I say that, again, we have to define terms. I mean, how the brokerages tend to talk about themselves. We joke, you know, that there’s certain words you can’t use in marketing, like “service” and “caring” and “integrity”...
Eric: Because everybody could say it.
Steve: That’s right. It’s because everybody can say it, and there’s no legitimate opposite. Right? And so, if you’re using words like “service” and “caring” and “integrity”... generally speaking, so are your competitors. And so, your differentiation is not so much there. And there’s just a lot of room for a lot more personality. We don’t have to take ourselves so seriously. And so, even if you’re not ready for a business model redesign, there’s such opportunities for fresh voices. And I have to qualify that by saying, you know, because it’s such a localized industry, I haven’t seen more than I have seen. And so, there may be some brokers out there that are knocking it out of the park… just haven’t really come across those where I… you know, where I sit back in my chair and say, “Man, I wish I had thought of that.” That’s what you want.
Eric: It seems to me, like the whole notion of segmentation is difficult. There’s probably some local examples of it, and some boutique firms that do a really good job in segmenting. But the whole notion of segmenting and standing for something, without worrying about potentially losing business, seems to be a bit nerve-wracking for a broker.
Steve: Well, yeah. And there are reasons for that. If you’re a very, very niche broker, you’re probably segmented by definition. You’re like at the extreme high end of the market, or vacation homes, or what have you. If you’re a big, successful brokerage with significant market share, the initial reaction to the thought of segmentation is “We can’t do that.” Right? Because we have to serve the whole market. Even that’s a misunderstanding of segmentation. To segment a market is simply to understand that different consumers have different personalities, different approaches, different needs. And it doesn’t mean you can’t meet multiple of them. It means you can’t be all things to all people. You know, that’s sort of a cliché. But you can certainly be all things to some people. And you can be some things, or something, to all people. But you can’t be all things to all people. Well, there’s room in there for being something to many different kinds of people. But that’s a pretty sophisticated approach. And, actually, if you have significant market share, it’s difficult to go anywhere but down. So, you have to find a way. Because your competitors are going to pick off your segments, or your new competitors will, anyway. So, you really have no choice but to get into it. So much of this is because, you know, it has been a fairly immature industry in terms of marketing and branding knowhow, and that’s why we love it. Because there’s such wonderful opportunity to really move brands forward.
Eric: So, if you were working with a broker today—maybe a 2nd or 3rd generation family of brokerages, as an example—what 2 or 3 pieces of advice would you give them of moving forward… absolute cutting through the clutter and standing for something different?
Steve: Well, at the risk of sounding like a broken record, or somebody who’s schlepping my book… you know in When Growth Stalls, we identified 4 internal dynamics that tend to derail companies. And 3 of them—I mean, all 4 if the shoe fits—but in terms of advice, 3 of them I would just double down on. The first one is “Focus.” We have a thought exercise that your listeners could do themselves, “The Five S’s”—I don’t know if you remember this, I think we’ve talked about it in the past—”Something, Someone, Somewhere, Somehow or Sometime.” You know, focus on something, someone, somewhere, somehow or sometime. It’s a fascinating way to generate ideas for how you might sharpen the tip of the spear. So, that’s number one. The second is related to it, and that is “Nerve.” You know, a loss of nerve often derails companies. That’s where you lose your gusto, you know, you lose your excitement and your conviction. And so, we say “Be bold in your messaging. Be willing to invest in it and promote it over time.” And it’s kind of interesting because that tends to be a byproduct of focus. When you find something exciting to focus on, it tends to overcome the fear you have, and it makes companies lose that loss of nerve. And the third one is perhaps the hardest one, and that is to “Be Consistent.” As I said in When Growth Stalls, “When you start over, you’re starting over.” And in this day and age, you simply have to pick and stick. And it is a misnomer to run an ad, or a direct mail campaign, or an email campaign, and 10 days later say “How did it work?” Now, there are certain kinds of campaigns that you can expect an immediate return on, typically those that harm the value of the business when they’re price-based, or you know. But, for a company to be successful long term, this is a great test to ask yourself: If you’re wondering whether you should spend the money, you’re in the wrong headspace. You should be wondering how you should spend the money on marketing. You can’t be a real businessperson without a real marketing budget—has to be realistic, has to fit your business, and fit your context—but, you shouldn’t ever be going back and forth as to whether it should be a matter of how. So Focus, Nerve, Consistency—those are the big three. Of course, the 4th one, as you know, is “Alignment.” You have to align your troops, and you typically have to align them around your focus. And so, I’m kind of giving away what we do with and for our clients, is we really help them navigate those 4 internal dynamics. And that’s, I think, what any brokerage, in today’s environment, needs more than ever.
Eric: As you look back at your career, and the projects you’ve done—because you really are in a consulting role, obviously, as a marketing advisory firm—what drives you crazy about clients? What sort of things have driven you crazy when you roll up all your recommendations, and you know it’s the right package, and the clients have a tough time with it? Walk me through that. How do you help clients through that? Because that’s a big step. That’s a big change for them.
Steve: That is THE big step, and we’ve failed for so long, until we finally decided to attack it ourselves. When I say “we failed” is… you know, we work with clients to get them to this point of tremendous focus, and nerve, and excitement. But it represents change, and that’s the hardest part, is to actually do it. We have a saying we coined, “Strategy without execution is only theory.” And I thought that was original until I came across a Goethe quote the other day, you know the old Revolutionary War era German poet. He said, “To think is easy. To act is hard. But the hardest thing in the world is to act in accordance with your thinking.” So, what drives me crazy is when we’re all in agreement, client and us alike, that this is the future and this is the roadmap. And, for one reason or another, it doesn’t get executed. Now, having said that, we have a healthy self image here. We believe that, if our clients aren’t acting in their own best interests, that that’s not their fault. Maybe that’s something we can help with. So we’ve been very inventive in recent years into helping ensure that execution is part of the package. Because, you got to get going. The second thing, if I could add one… it’s funny, because in the same article, it was the same Goethe quote. He says, “Seeking and blundering are good, for it is only by seeking and blundering we learn.” Our modern translation of that is “Momentum beats perfection.” That’s a really big statement. Because, 20 years ago when we started the firm, it was about coming up with the perfect plan, and the perfect ad, perfectly executed before you launch. With lean startup methodology, and all of the learning that we’ve gotten out of Silicon Valley, it really is true—you know “Failing fast,” “Momentum beats perfection”... get moving! Because, no matter what you do, it’s not going to be perfect. You know that. And so, get moving, get learning, and go from there.
Eric: That’s great coaching. So, what do you like to do? I know you’re a swimmer. I was going to ask you if you still wear a Speedo when you go to swim meets, but that’s probably not appropriate.
Steve: It’s probably not to ask, and it’s probably not to wear. I’ll just tease that.
Eric: So, what our audience probably doesn’t know, is you’re a fantastic master swimmer, who’s won a number of gold medals.
Steve: I enjoy it. I like to swim and run, and I’ve gone back to lifting recently, because… this weekend, it actually struck me that, you know, when you’re younger, it’s all about doing more every time. You get to a certain age, and it’s all about not doing less. So, you just try to maintain. But, no, I love to swim, both in the pool and open water, long distances. And love to read and write. Body, mind and soul. Church is also important to us. And we’re hanging out with our adult kids and grandkids. So, it’s all good.
Eric: Well, you’re such a humble guy, and it’s been excellent catching up, and you providing insights to your services as you made that shift to a marketing advisory firm, and also of some coaching for brokers out there and Realtors who are in the marketplace. I really appreciate the time you’ve given us today.
Steve: Likewise, it’s fun. Thank you.Share to: