Sharon E. Michnay, CRP, GMS, director of Corporate Business Development for Halstead Property in New York, NY, shares this commentary on the direction of relocation departments.

Relocation is a very specialized industry, but take away the ERC BMA forms, buy-outs, inventory and corporate sponsorship of moves and what you’re left with is good old-fashioned customer services.

For those of you who remain befuddled by these divisions, perhaps this will help:

Sphere of Influence = Corporations, Relocation Management Companies, Other Brokerage Firms, Agents and increasingly – individual consumers

Customers = Transferees and individuals who need to buy/rent/sell/invest in real estate

Just like an agent, the Relocation Department markets to their SOI in order to create business. The only difference is that they do it for the company as a whole rather than themselves. The Relocation staff counsels, connects, tracks, and provides an extra layer of support for both these groups. Who doesn’t like that?

Today, “Relocation Departments” are looking a lot more like “Corporate Services Divisions.” REO’s and investment property don’t involve a relocation yet these customer segments are just a few that are benefiting from the programs and services provided by these divisions.

The current state of many real estate markets aside, two of the biggest challenges facing the real estate brokerage industry today and going forward are shrinking broker profit margins and continued segmentation of the consumer.

McKinsey & Company offers a great collection of studies called “Profiting from Proliferation.” Although they didn’t include real estate specifically in their study, it offers valuable information to anyone in the service or marketing industries.

The report defines proliferation as, “…the simultaneous explosion of customer needs and segments, the increasing number of touch-points and channels available to reach customers, and the magnitude of media vehicles required to communicate to customers”

While “Relocation” or “Corporate Services Divisions” can’t address all these issues alone, as alluded to earlier they quite capably have the ability to modify their products and customize their customer service skills to deliver programs designed for and targeted to multiple consumer segments.

These divisions can also address shrinking profit margins. Many of these customer segments produce unencumbered sources of business for a company. The referral fees that accompany these leads can often turn an 80/20 broker – agent commission share into a 60/40.

Real Estate brokers have the option of continuing to rely on agents to bring customers to the company in an increasingly complex market or allowing the agents to focus on what they do best and focusing company resources on providing agents with customers. For those who prefer the second option, Corporate Services Divisions offer both opportunities and solutions.