A while back I addressed large group of agents, members of an elite force handling estates, plush portfolios and families with trust funds, crests and insignias. My discussion covered current innovations in marketing — blogging and social networking in particular. These topics seemed to be of no interest to this group of high achievers. In fact, despite all the hoopla surrounding these tools, it appeared altogether clear that this group has done a pretty darn good job of doing business without them.
While many in our industry wade in the receding tide pools of the estate’s red ocean, these folks loll in the currents of the deep blue.
I decided pretty quickly into the speech to move beyond these topics. I wasn’t bothered. It gave me an opportunity to reconsider much of what is being brought to real estate, especially technology. To this group of top producers much of it, while clever and socially trendy, does little to really enhance their business.
This stuck with me on the flight home. Is the bulk of what’s out there — ideas built in the spirit of innovation — really addressing the core needs of all real estate professionals or have they merely been the product of some bright ideas, venture capital and hope?
Stroll through the vendor alley at NAR. Idea after idea that "only costs $9.95 a month" is sold on the premise that "if this helps you get one more listing or sell one more home it will pay for itself 10x over."
Well, multiply that by hundreds of vendors, hundreds payments of $9.95 and the hundreds of hours it takes for agents to learn how to use and leverage these things into their business and you realize that it’s not just one house they need to sell, it’s many.
The most successful members of our industry shy away from these tools. As cool as they are, they simply can’t and don’t replace good, old fashioned hard work, smarts, image, savvy and a book of referrals culled from years of networking and building meaningful relationships.
These high-end agents aren’t syndicating their listings to dozens of sites. They are not blogging. They aren’t socially networking. They aren’t creating map mashups. They don’t use transaction management systems and they aren’t spending tens of thousands of dollars on personal tri-fold brochures.
These pros see the masses of agents playing with their widgets, building their profiles on Facebook and tweaking their websites while at the same time complaining about commissions, fretting over dwindling sales and stressing over the rigors of dealing with difficult clients.
I thought about my tenure in real estate and technology and the discussions I’ve had with peers about the trials of creating and selling products to mainstream of real estate. The place where we see the volume business. Where charging pennies above cost will all pay off.
It’s a bloody red ocean full of competition, special deals, whimsical products, empty promises, unmet expectations and a revolving door of unskilled clients that may not be worth servicing any longer. Perhaps the uncharted blue ocean of opportunity for vendors is really occupied by the minority of agents with the majority of sales and wider bandwidth for learning, growing and investing in things they actually find valuable.
Granted, their numbers are smaller. And they’re harder to reach. And picky. But sailing the waters of the blue oceans of real estate and building meaningful tools for the cream of the crop might not be such a bad strategy in the years to come.
- Davison
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Good analogy. It would be interesting to survey the Active Rain Realtors to determine if their efforts are producing a higher than average annual income when compared with all Realtors.
Good analogy. It would be interesting to survey the Active Rain Realtors to determine if their efforts are producing a higher than average annual income when compared with all Realtors.
I am curious on what the answer is. Most franchises built their business models around recruiting more agents. (The better mousetrap) Is building a better web portal the answer for most consumers? How can you use a better technology to attract existing agents? Many agents don’t see the benefit of the web 2.0 models and many of the top nationwide companies don’t support technology it in the fashion you suggest. Maybe they simply don’t get it or will continue to business as they always had. Why not create a lead generation model, lead conversion model and a total client fulfillment system and create a business around less is more. (Smaller not traditional brokerage made up of experts specializing in his/hers own unique ability necessary to make all this happen. i.e. technology, marketing, retention, managing, getting contracts signed, putting up signs, ) Hire out and delegate most of it and become a marketing machine. Out flanking and out maneuvering the competition. What is the irresistible offer for the consumer and at what point does the consumer buy into the fact that if you put everything on the web 2.0 then everything else will take care of it’s self? How can creating the best technology attract the best agents, when in fact they may be purchasing some sort of technology already?
I’m curious what comes first, the technology platform, or the agent attracting platform?
I have yet to see a system that covers both?
It seems to me there are several answers to this question? I’m still attempting to figure out what the underlying answers are. Brokers get out of the business as they know it. What does the transition look like? Where is the technology coming from? Who has it and how much? Can you prove it’s effective? If this is the wave of the future, why isn’t anyone creating it?
The underlying question should be: why aren't technology companies and brokerages working together to figure out what agents want, based on their real needs instead of just cranking out ideas that are never tested.
But an even more important question is:
What gaps are there in servicing the consumer that if filled could create loyalty, trust and more business
rather than confusion and distrust.
Another question: Why do brokerages today resemble hair salons where they rent desk space as if they were hair cutting chairs?
Seems to me that brokerages have lost all sense of their own meaning. Most develop nothing, hardly train, do not do anything to differentiate and just recruit agents who are brand new and market them as experts to the consumer.
There is a broker I know. His brokerage develops technology. They own their own publishing company. They create and distribute solutions to their agents. They matter. As a result, they recruit the best agents in the city. Get the best deals. And surfing the waves of the blue ocean while their competition are drowning in woes.
The answers are there but you need to start asking the right questions.
Define blue ocean? Where is the product or service, that if it where there would do amazing things? So, is the answer in agents or brokerages or both? or neither? It seems there is a way to create a business that has efficiencies in real estate lead generation, conversion and total client fulfillment. Look at any other business u.s.a. I think your friend is on to something with his publishing house. Yet, how is that helping consumer? Are they advertising in a way that's not being met? Question. If you were to go out into any market usa. What's the first thing you would do to generate interest in your real estate organization? What is it that consumer's would want, yet they don't know that they want it yet? Then who delivers it? Is there a way to work out JV's with the marketing, technology and real estate company's? Is call capture and cold calling dead? What's the proverbial new net that get's cast over the customer base you're targeting that makes them aware(listen) of the possibilities available to them. IT's systemized, duplicatable, and… and get's be put into any market usa.
It must consist of database marketing, management, web 2.0. incredible information that any consumer can operate and digest. Yet, there needs to be a relationship side. Where consumers can met and greet and be educated and relationships formed. Pick out most real estate companies and they have 100-500 agents m/l and do things 100 million different ways.
Where's the efficiency's there? Most companies don't know what the right arm and left are doing.(CRM?) Consumer's (many) are ignorant to the fact that when there home is listed for sale anyone else from that company listing the home is going to work to get there home sold. In most orginizations there is very little teaming and what are we going to do to get the Jones' home sold today. It seems to me in the 172 things that REALTORS do there is a way to create efficiencies in the unique abilities of other companies and people to create a dynamic system that works to market, expose, serve, enable to business to be profitable and everyone wins. So me the technology that does all this? Nevertheless, the good and the bad news is that most anyone can get into real estate and it appears that many of the following herd is going off a cliff right now. Most systems and companies are mediocre at best. They are following an old model and reinventing from an old model. Real Estate can be created as a business. Right now a real estate businesses best asset is there agents. Understand to this point. No real estate company sells a home. Real Estate companies revenue is a direct result of their agents abilities to list and sell homes. So if those 100-500 person's offices have agents doing things 100 million different ways. How do they know what works? Besides throwing more agents up against a wall to stick.
What consumer's get from this model are that desperate agents do desperate things. They create risk for themselves and the companies and the consumers are the losers. So the new blue print for real estate is this is the way we do things. This is what works, and this is how we do it in…30 minutes or less or it's free..
So, we'll keep asking questions and keep wondering why real estate is the way it is until a "real" blue ocean can be established
Excellent post. It's the old 80/20 (in real estate 95/5) issue. Those that develop their niche, ie. high-end, investment, etc. are those that seem to have a better understanding of business in general.
Instead of being a jack of all trades, chasing any scent of a possible RE commission in any area, these agents / business owners focus only on the business they know they can exceed expectations on, while referring the rest out to peers they respect. This gap will grow significantly as the new consumer who does 9 months of research about an area / homes they are interested in will probably know more than the agent he/she calls for information.
The focus towards a niche of some true real estate professionals / companies is also an indicator of their natural focus towards their business. They take it seriously, so they are not duped or swayed easily as they seek to be “remarkable” (to borrow from Mr. Seth Godin) in a very specific field.
Now the "blue ocean" is that you can develop tools / sites that would make you the go to source for a very specific niche which is the true power of the internet. These tools provide social proof that someone knows what they are doing, they identify their future clients and ultimately reinforce the offline “remarkable” experience for their clients, which further builds the trust & loyalty and brings more referral business to them.
Again, great post.