Many of you may have seen glimpses of the issues that the State of California legislature faced in passing their budget. They were faced with closing a $42 Billion budget deficit. The final budget recently agreed upon but some voter resolutions that will need to be passed in order for the budget to work.
Funding levels will need to be cut that impact citizen benefits like education, health services, and other key areas. Furthermore, revenues will need to be increased in areas like vehicle registration fees and sales tax. These changes will not be popular, as they will touch everyone in the state in a significant way, but are necessary to stay solvent.
We see similar discussions happening in our strategic planning sessions with MLS Boards.
MLSs are faced with new challenges today. The Department of Justice is mingling in their affairs, and MLS of Choice combined with Data Sharing gives participants new MLS offerings. How do you balance services with fees? What is your MLS’ core product and what is its competitive value? How do you communicate your product offering and value to your participants?
These are difficult questions that require strategic thinking, research, and debate to answer. One strategic path is to offer low fees and fewer services; the other is to offer higher fees and more services.
The answer requires an assessment of competition and a balancing of services and fees that reflects the needs of your participant customers (research). It is clear to me that bulk license agreements per member per month for products that are being used by less than 5% of participants will need to be restructured or cut. Focus will need to be placed on core services that MLSs must provide at the expense of removing services that are nice to have. Training and participant communications will be critical to making sure that participants are leveraging the core services in the best possible way to get the maxim value from them.
If you need help, be sure and contact the WAV Group.