GlobeSt.com: Results of the Quick Survey show an almost even split among the factions, with 51.9% stating that the trend among nationals to go with alliances is just an economic move in downtimes. What do you think?

Ford: That 50/50 split is a statement about the evolution of our business as much as it is a statement about whether the affiliation trend will last. You're going to see a further segmentation of firms based on this issue. You're also going to see more firms become hybrids, using a mix of owned and affiliated branch offices.

GlobeSt.com: With the affiliates relegated to second and third-tier markets?

Ford: Exactly.

GlobeSt.com: So what's the outlook for independents in a world dominated by nationals and networks?

Ford: The independents won't get pushed out, despite what all of us used to think. The truth is that this business is large, and there is room for multiple ways to serve our clients.

GlobeSt.com: Then what do you make of the trend among nationals to develop affiliate branches? Will we see a return to ownership when the business models can justify the acquisitions?

Ford: You'll see different models develop. In some cases, I think you're going to see some nationals revert to ownership when times improve. The financials for now are clear. A firm can spin its Tulsa branch into an affiliate and let it keep the company brand. This lets the parent firm shed the ownership expense, creating revenue at no risk. I see that as an endorsement of our philosophy.

GlobeSt.com: Not if they go back to ownership--and certainly not if they won't use affiliates in major markets.

Ford: Those that revert to ownership models will do so because it is their core philosophy to structure themselves that way, because it's a part of how they market themselves, rather than how the financials add up.

As far as the second question is concerned, I would be shocked if a single-entity company looks at an affiliation in a major market. Most of those firms are going after the Fortune 500 corporate user. It doesn't work to have those clients served by an affiliate, since the real estate firm wants those users as clients of the company--as opposed to being clients of the broker. It's a major differentiation in marketing approach.

GlobeSt.com: That's the second time you mentioned marketing strategy.

Ford: There's an aspect of your survey that is a validation of what we've always said. Look at the debates about networks vs. nationals that have appeared before. The argument was always that there is no control with affiliations. Now the nationals are saying they're going to follow that model and consistency and control are not the issues they thought they were. At some point, they are going to have to backtrack.

GlobeSt.com: Why?

Ford: Simply because what they are saying now deviates from previous statements, creating confusion on the part of the client base.

GlobeSt.com: While there seems to be a trend toward affiliation, 68.9% of our respondents said they are standing pat with their current relationships--whatever those may be. What does that tell you?

Ford: It doesn't surprise me. It shows a comfort level and adds credence to what I said before--that none of these strategies is likely to go away.

GlobeSt.com: We asked about the upside of affiliation. The majority (54.4%) said greater market coverage at reduced cost was the major benefit. Do you agree?

Ford: For us, the prime focus has always been on improving member firms' ability to compete on a local level, since that's where 90% of our members' business resides.

GlobeSt.com: I don't expect you to go too deeply into the downside of affiliation, although 54.9% of our participants said the loss of consistency and quality were the biggest issues.

Ford: The downside of affiliation--or any relationship you choose for that matter--is if you make the wrong choice. If your goal is to be like Insignia, for example, then you should seek a relationship with Insignia. The question always is, which augments the business plan you want to execute?

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