How Pete Dalton has grown his real estate sales empire, now poised to top $1 billion in revenue
Pete Dalton, owner and chief executive officer of Jacksonville-based Coldwell Banker Vanguard Realty, has been on a 44-year journey. His trip is still far from its final destination.
But Dalton — based on Vanguard’s performance the past seven years and the details of his strategy — appears to have figured out how best to get where he wants to go.
It’s not the path everyone else takes.
After four decades of owning and operating residential real estate brokerages, Dalton has refined his business model over the past five years in a way that is achieving that elusive business benchmark: consistent, industry-leading annual sales growth and growing profits.
Indeed, since Dalton acquired the Coldwell Banker franchise in Jacksonville in 2010, Vanguard Realty has generated more than 15 percent annual growth in gross revenues — from $230 million in 2010 to $926 million in closed sales by year-end 2016.
And based on sales growth so far this year, barring unexpected calamities, Vanguard will top $1 billion in 2017, climbing closer to equaling or topping the region’s two top brokerages — 52-year-old Watson Realty (more than $1.7 billion) and Berkshire-Hathaway ($992 million).
“I’m confident it can happen,” Dalton says. “The only person who can screw it up is me.”
Dalton’s model is rooted primarily in one steadfast principle: His company’s agents — not the homebuyer or seller — are his No. 1 priority. His strategy revolves entirely around helping them and making it easier for them to focus on building their businesses.
You can see it on the wall of one of the conference rooms at Vanguard’s Connect U. operations and training center on Philips Highway. There are three 3-by-5-foot mini-billboards on the wall. Each one features a life-size photograph of a Vanguard agent. Notice, Dalton says, how the agent is most prominent, with the Coldwell Banker logo less prominent and Vanguard Realty’s name the smallest of the three.
It’s all about the agent at Vanguard.
“It’s not about me,” Dalton says.
Says agent Rhiannon Myers, who works in Vanguard’s Fleming Island office: “He caters to our needs. Pete’s vision is to help me be more successful.”
Myers is a recent Vanguard convert, joining the company at the end of March. She spent the previous 10 ½ years at another Jacksonville brokerage. Even though she grew her business to $13 million in closed sales in 2016, Myers says she felt she reached a plateau.
Myers also noticed what was happening around her: Vanguard was consistently increasing its market share, and some of the region’s top-producing agents were shifting to the company.
Dalton and his team sold Myers on what Vanguard has to offer. Dalton refers to it as Vanguard’s concierge services. Myers calls it the “Amazon.com” for Realtors. “They have everything you need,” she says.
Over the past five years, Dalton has invested more than $1 million in his Connect U. operations center, outfitting it with people and equipment designed to provide agents with virtually every back-office service that consumes agents’ time away from generating and keeping customers.
Central to the concierge services is Vanguard’s Connect U. marketing staff. “We spend hours and hours creating a brand for each agent,” Dalton says.
The in-house staff designs the agents’ marketing materials. They include personally branded business cards, brochures, postcards, letterhead, social media posts and email blasts. Its video production staff produces videos and photo galleries of agents’ listings. Associates can order the products and services through a company intranet, saving them hours and hours of time.
Dalton says Connect U. charges agents for these services, but it’s less than what they would pay if they purchased them from outside vendors.
The Connect U. center also has saved agents from much of the time-consuming tasks of communicating data to their sellers and buyers. Vanguard’s IT team has created computer programs that automatically send out alerts to an agent’s customers when there are comparable sales or new listings in their neighborhoods.
“Just to pull that data for 10 of my listings would be a lot of work — searching all of the records,” Myers says.
When agents make a sale, Vanguard has programmed a digital checklist that goes to the agents with what and when everything must be accomplished for closing.
“All of this prevents me from having to hire two or three people,” Myers says. She still pays a full-time assistant. But all of Vanguard’s services are “giving me the time to be more consistent and the time to go find more customers and take care of my customers.”
Myers has set a goal of reaching $20 million in closings in three years. With Vanguard’s concierge services and support, she is confident she will break her plateau.
Another piece to Dalton’s agent-first strategy is training.
It was late 2010 and early 2011, just after Dalton acquired the Coldwell Banker franchise in Jacksonville.
Every brokerage was still struggling through the housing crash. According to Clark LaBlond, director of career development in charge of Vanguard’s education programs, Dalton saw a need among agents.
Over the past two years, the weaklings had been weeded out of the industry, but many of the top producers who were still committed to their profession were going back to the basics of selling. They wanted training and education.
Dalton persuaded LaBlond, a 20-year veteran of the industry, to be his top trainer. He and LaBlond strategized on programs focused on experienced associates and an aggressive marketing-driven model.
“It turned out to be a bigger proposition than we thought,” LaBlond says. The participation from the associates was much greater than they expected.
Dalton and LaBlond gave Vanguard’s experienced associates access to a variety of educational and training programs. They’re not mandatory, but Dalton and LaBlond say many of their experienced associates still participated. It’s not unusual, for instance, for a class to feature one of the company’s top producers explaining the keys to his or her success.
And although Vanguard emphasizes hiring experienced and top-producing associates, LaBlond also schools newcomers.
It’s an intense, five-week program, totaling about 100 hours in class, with Vanguard paying each new associate and the cost of the classes.
Dalton and LaBlond are selective on who is accepted. Separately, they said the company looks for and attracts “Type A” associates.
Indeed, Dalton notes that Vanguard’s agent strategy and business model are structured for top producers.
To this end, Dalton offers associates higher commission splits than do other brokerages when they start. While new associates at some brokerages may start out earning 55-65 percent of the broker’s 3 percent sales commission, Dalton’s plan allows associates to start at a 60-85 percent split. And once they reach a certain cap, he increases their split to 95 percent for the remainder of their contract year.
If an associate doesn’t make what Dalton calls the associate’s “fair share,” the associate’s commission split will go down.
Dalton figures he can offer higher splits because his sales expectations from Vanguard associates are also higher than other brokerages.
The strategy appears to be working: In 2016, Vanguard’s 273 associates averaged $3.4 million in closings versus $1.8 million to $2.1 million at other brokerages.
Vanguard also had 18, or 25 percent of the region’s top 75 associates, while employing only 4 percent of the Realtors in the Northeast Florida market.
So far in 2017, Vanguard’s associates are running ahead of 2016. In February and March, listings were up 11 percent over the same two months a year ago. And the pending sales volume was up 40 percent over a year ago.
Vanguard’s agent numbers continue to rise as well. The company added 27 associates in the first quarter.
Dalton says continuing to increase those ranks will be crucial to achieving his goals. Dalton has set a target of $1.5 billion in closed sales by the end of 2019 — 20 percent annual growth from 2016.
What’s more, Dalton is thinking that he and his Connect U. staff have refined their business model to the point that it’s scalable beyond Jacksonville.
Although Dalton acknowledges Vanguard may be thin on management bench strength, he nonetheless says he would consider acquisitions in growing markets east of the Mississippi and south of the Ohio rivers.
And the final destination in his journey? Says Dalton: “The vision is to be recognized as the most innovative and professional real estate organization in our market.”
Doing business at the ‘speed of Pete’
Told that Pete Dalton said in an interview that he’s not in as much of a hurry as he used to be, Clark LaBlond, director of Coldwell Banker Vanguard Realty’s career development, chuckled aloud.
“We call it the ‘speed of Pete,’” LaBlond says.
“We tell people when they join us if change really scares you, then this probably is not the place for you. Or, ‘If you don’t like it, wait a while, it will change.’”
These are not criticisms of Dalton. They partly explain how Dalton has owned and operated his brokerage firm under four different franchise names since 1974. That was the year he went off on his own after the broker in his first job stiffed him out of $3,000.
Ever since, Dalton, 69, has been a driven innovator. Indeed, he drives a Porsche Carrera. Four days a week, he’s on the street at 6:30 in the morning bicycling anywhere from 25 to 60 miles— 150 to 160 miles a week. He works 50 to 55 hours a week, down from the 60 or 70 that he worked before he realized, as he says, “I couldn’t do it all.”
Five years ago, he hired a chief operating officer.
But that hasn’t slowed Dalton’s focus on moving forward and constantly changing to meet the market’s needs and demands. “You have to recognize that ‘good enough’ is rarely good enough,” he says.
Says LaBlond: “He’s constantly coming up with new ideas.”
Here’s one: Dalton doesn’t believe in blanketing the market with Coldwell Banker-Vanguard offices, each staffed with a manager and administrative assistants. Vanguard has what Dalton calls only five “resource centers,” which have on-site “market development managers.”
These managers are responsible for their offices and their performance; mentor and coach associates; and recruit new associates. The offices are in Avondale, the Beaches, Fleming Island, Mandarin and Town Center.
But elsewhere, Dalton is opening what he dubs “community market centers.”
Those are unmanned offices equipped with up-to-date communications technology and furnished professionally to serve as places where associates can take their clients. So far, there are two; by 2019, he expects to have nine around the region.
Says LaBlond: “He’s always thinking what’s best for the associate and customer — how to make the process easier.”