Old Company. Troubled Industry. Inside the Effort to Reboot Century 21, the Real Estate Giant.
Walk into Century 21’s headquarters in Madison, N.J., and it’s clear the company is in transition.
A few things seem off and slightly out of place. The walls. The furniture. And most notably, the Ping-Pong table -- that clichéd symbol of a Silicon Valley startup, which sits awkwardly abandoned in a corner.
The table arrived in 2017, a corporate gift to welcome Century 21’s then-new CEO, Nick Bailey, who took over that summer. He’d arrived from Zillow, one of the very tech companies putting pressure on Century 21, and carried with him no allegiance to his new employer’s past -- including its office design. His mission, in fact, was to largely tear the place up: to overhaul what many have come to see as a tired brand, a former real estate giant that lost its way as technology turned the industry on its head.
“Before I was hired, the place looked like a morgue,” he says. “An awful place to work.”
To start, he did what’s become common among tech leaders. He opted out of the corner office, moved into a cubicle a few rows away and turned his predecessor’s work space into a company war room of sorts. Desks were cleared out to make way for the Ping-Pong table. “We wanted to create a shock factor,” he says. “Leadership has to prove that things are different.”
But this is a 47-year-old company, and, as Bailey is learning, even shock waves tend not to ripple outward very fast. It only takes a quick trip down the hall to see that. Cubicles still rise from carpet-lined floors, and the noise level can best be described as “appropriate.” A party held one summer afternoon for a recently wed employee featured a sheet cake and ice cream, like on an episode of The Office.
Bailey says the renovation is not yet finished. But he has bigger things on his plate -- like turning Century 21 into the most sought-after, beloved brand in real estate. That’s a big task, especially considering that most consumers loathe the home buying and selling process, no matter who is helping them do it. The fix will be external (new logo, messaging, essentially a full rebrand) as well as internal and emotional -- changing processes, changing culture, changing customer expectations. It won’t be easy, Bailey knows, and success isn’t a guarantee. Nor is the blind support of staff, let alone a global network of 8,800 offices and 122,000 agents.
Still, Bailey is setting high goals. He says the company can double transactions in the next five years and become the most desirable brand in the industry. He also believes history is on his side. Five decades ago, Century 21 re-created the real estate business in America. What’s to say it can’t happen again?
Century 21 was founded in California in 1971 by two real estate agents who wanted to build “the McDonald’s of real estate.” It was the first company to take the very local business of real estate and operate it on a national platform -- running a franchise system, with local franchisees who hire their own agents. In a few years, Century 21 was opening 100 offices a month. From 1988 to 1990, it ranked in the top 10 of Entrepreneur’s Franchise 500® listing.
But the internet fundamentally altered the real estate industry over the past 15 years. “Once the listing information became publicly available, the agent went from being a guardian of information to being a professional services provider,” says Clelia Peters, president of New York’s Warburg Realty and co-founder of MetaProp, a venture fund focused on real estate technology.
This in turn created new opportunities for real estate upstarts, who came in with fresh ideas to tackle an industry that’s worth $31.8 trillion in the U.S. Redfin, for example, launched in 2004 with a DIY model: Customers could find and purchase a home on the site with little need for an agent. That turned out to not work; in the highly emotional process of buying a home, Redfin learned, people like having an expert by their side throughout the buying process. So Redfin pivoted to look more like a conventional brokerage, hiring more in-house agents and utilizing its technology to make the buying and selling process as seamless as possible. “Technology makes real estate more efficient, and that’s why the economics of it are changing,” says Redfin’s CEO, Glenn Kelman. “But there’s still a place [for an agent] to help somebody figure out: Is this the right house? Is this the right price?” The pivot worked: Redfin is now a public company that showed a 36 percent jump in annual revenue in its last quarterly report.
But as entrants like this embraced change, Century 21 resisted. “The attitude has always been Don’t rock the boat,” says Bailey. “We’re too large, we’re too big, we’ve been around too long. What if we change and it destroys us?” Change came anyway. The last time the former mainstay of Entrepreneur’s Franchise 500 list made the rankings was 2008.
Bailey, however, feels equipped to catch the company up. He got his career start as a Century 21 agent and most recently served as the VP of broker relations at Zillow, the online-listings company that helped consumers realize they don’t need to pay an agent to tell them what houses are for sale. It was there that Bailey says he learned what the industry thinks of Century 21: “It was referred to as ‘your grandfather’s brand.’ ”
To alter that perception, in March, he introduced a visual rebrand -- a step toward attracting younger franchisees and younger customers. Gone is the black-and-gold logo featuring a midcentury, Brady Bunch-style house. In its place are nuanced tones -- gray and light gold -- that showcase a simple C with a 21 nestled inside.
Next, Bailey wants Century 21 to better understand its customers and their concerns. Earlier this year, the company commissioned a study by Wakefield Research on consumers’ feelings toward the real estate universe. The results were comically dismal. Forty percent of people think it would be worse to sell their home than get a root canal; about the same percentage think being a real estate agent is easier than driving a taxi. Century 21’s first response came via social media: “We want to start a conversation around how the real estate experience could be better,” it wrote, “and how our agents could help achieve that.”
How will it achieve that? It’s a big question.
To start, the company is taking a cold, hard look at every part of the home buying process. From a real estate agent’s point of view, the problem starts immediately. “Seventy percent of people use the first agent they meet,” says Cara Whitley, Century 21’s CMO, who joined in 2015 and came from a background in hospitality and finance. “People spend more time researching restaurants than who will oversee the biggest purchase of their lives.” But this is also an opportunity -- either to be that first person a consumer meets or to change consumer behavior and win them away from competitors.
The closing process is another constant pain point. It’s that ever-moving target when ownership is officially transferred to the buyer. “As a buyer or seller, you don’t understand why [that date is never met],” Whitley says. Here, Century 21 also sees opportunity: It wants to make the process less stressful, more transparent and streamlined with technology.
For as open as the company is about its problems, it’s less forthcoming about its solutions. I repeatedly pressed for specifics on the changes it would make and the tech it was developing. How would all this impact franchisees, agents and consumers? The company mostly said it couldn’t offer specifics. It’s early days, to be fair -- much is either in development or still in the conceptual phase.
It did offer a few basic outlines, though. Century 21 says it’s making significant investments in technology, will simplify the existing system for agents and will make its website more mobile-friendly for consumers. Franchisee onboarding will change, too, leaning on video chat and conferencing to make the process “more experiential than theoretical.”
Bailey is more specific about how he intends to change the company’s culture. To start, he recently introduced something he calls House Habits -- six motivational ideas that have been distributed to all franchisees and are to serve as the new basis of agents’ performance evaluations. They’re idealistic, if not a little cheesy: “Always elevate,” reads one. “121 percent wins,” says another. The important thing, Bailey says, is that they contain directives. “Own it” is intended to change the company’s top-down decision-making process. “What if?” invites agents to challenge the legacy thinking that’s kept the brand at a standstill. “Dream big, move fast” asks franchisees to keep up with the changes at HQ. And “Open the house” calls for transparent communication -- within the company and between agent and consumer.
“We want to get agents to deliver an extraordinary experience,” Whitley says. To do so, she’s also exploring new incentives and rewards. This summer, Century 21 presented six agents with the Relentless Agent Award, an honor based on service rather than sales volume. Leadership pored over 5,000 customer testimonials to identify honorees, who were taken to ESPN’s ESPY Awards in Los Angeles this past July. And that was no random prize: Century 21 is now partnering with ESPN in an effort to align the passion of its agents with the passion of a sports fan. (Century 21 will sponsor “relentless moments” in sports through commercials featured on ESPN social platforms.)
If it seems like an unnatural fit, that’s the point. Whitley and Bailey want to catch the attention of fresh, ambitious blood -- and they’re looking well outside of real estate to figure out how. Could a ratings system become as valuable to the company as Yelp has become to restaurants? Could the predictability of an Amazon delivery be translated to the timeline of buying a home? Says Whitley: “We’ve got to look across to other sectors to see what’s working and bring that thinking to what we’re doing.”
Changing any large company is hard. But it’s even harder in franchising, where changes at the corporate level must then reverberate down to hundreds or thousands of franchisees.
In those franchisees, Bailey is finding a unique challenge. Top, hard-charging franchise companies run in lockstep, with their franchisees carrying out a well-honed system. But at Century 21, while the company was failing to evolve over the past half-century, its franchisees found their own best practices. For example, Dylan de Bruin, co-owner of a Century 21 in Des Moines, conducted an audit of the buying and selling process to learn where agents can improve service. In Washington, D.C., franchisee Todd Hetherington customized training with more individualized, in-the-field work.
“There have been no company shifts sent down to us at the ground level,” says Manny De Silvia, a Century 21 agent in Corona, Calif. In his experience, agents are more focused on their own brand than that of the company, anyway. “All agents say the same thing: ‘It’s not about the brand; it’s about me,’ ” he says. “People will buy and list with us because of who we are. They aren’t looking at brands anymore.” He says some of his colleagues have been tempted to defect from Century 21 to NextHome, a startup-style brokerage (and franchise) that launched in 2015. There, technology and a modern culture is part of the founding DNA. “They’re building what millennials like,” he says. “There’s a giant worktable; everything is digital.”
These are the kinds of people that a rebranded, refashioned Century 21 will need to reengage in order to be successful. And that will mean hearing a lot of opinions.
After Century 21 revealed its new branding, for example, franchisees across the country dutifully replaced their signage and business cards -- but that doesn’t mean they’re all happy about it. “Fifty years building a brand, the gold standard! All to be thrown away for beige and boring,” wrote one on Facebook. Another echoed, “Looks like the designer went to a mall, passed a Michael Kors store and a Forever 21, then this logo was born.”
In conversations with franchisees, I heard complaints of all forms. Some, like Tracy Larson, an agent with a Century 21 franchise in the Florida Keys, think the logo design isn’t universal enough. “It’s fine for metropolitan areas,” she says, “but there’s no connection to an island lifestyle, which is what we sell here.” Others complain of the cost. Franchisee Hetherington says it will require hundreds of thousands of dollars to change out signs and marketing materials. “I won’t say I’m happy to pay it,” he says, “but it’s making a change and putting us on the map.” And in Manhattan, Ryan Sherman wants to see more change. “To make a splash, Century 21 has to reinvent the model,” he says.
Some say they had no idea the change was coming until it arrived. Plenty of franchisees were consulted during the design process, though Bailey says it would have been impossible for the company to connect with every last one. Like many large franchisors, he was resigned to the reality that he couldn’t please everyone. “The initial rollout was emotionally charged,” he says.
What he hopes now is that franchisees give him the benefit of the doubt, and time. The rebrand will take several years to hit all 8,800 offices, and that’s just the visual aspects. Cultural and technological changes will happen at their own pace. But, he seems to think, a good first step is at least acknowledging all the problems. Century 21 needed work. Its industry is grappling with immense change. A company that faces challenges head-on is healthier than one that doesn’t.
“Real estate is local -- even 10 miles makes a difference,” Bailey says. “Yes, we want to have consistency. But we can have a level of flexibility that still lets people be individuals.” After all, individual success can only lead to greater things for the company. “If the industry won’t create the standard,” Bailey says, “then why can’t we?”