I can’t tell you the number of times I have had a conversation with someone in the real estate industry where they tell me that the consumer is NOT their client. We prefer to think of the agent as the primary audience and simply ignore the fact that agents do not provide the checks. As the saying goes…follow the money…If you want to succeed in real estate, you have to address the needs of those that secure mortgages to buy and sell homes, not simply those that get a commission check from the sale.
That seems like a simple concept, doesn’t it? But a consumer focus simply eludes us in real estate. Every business model in the industry helps us justify the fact that it is all about the agent. Associations need members for advocacy so they focus on agents. MLSs need agents to fuel investment in technology so they focus on agents. Brokers need sales associates and technology fees so they focus their energies on recruiting agents.
Is it any wonder that the industry’s reputation with consumers is not as stellar as it could be when we focus more on our own needs than theirs?
As many of you know I come from the world of consumer products and I am passionate about trying to change this very dangerous and potentially lethal belief system we cling to. It’s more than time for us to open up our eyes and realize that when you ignore the needs of the buying public, it’s only a matter of time before you get replaced….Oh wait, isn’t that already happening? When you ask consumers what brand they think of when you say real estate they say Zillow. When you ask consumers where to find an agent they tell you Yelp. We’re already losing a ton of ground because we refuse to believe that the needs of the consumer have to be considered and responded to, even when their requests are uncomfortable to us.
Why does Zillow exist? Because the industry refused to provide AVM’s. Why does Yelp exist? Because we believe consumers are not well-equipped to provide feedback on the transaction so why give them any transparency into customer feedback from past transactions?
So what do we do to change this life-threatening trend?
Well here’s one small step that brokerages, associations and MLSs can take on to begin to stem the tide of this dangerous perspective.
How about involving consumers in the conversation? What if we ask them their opinion of technologies we are considering? Get their input on what they believe are the biggest weaknesses in the industry today? Solicit their opinions on pending legislation affecting real estate? Ask them about their perception of our brand and competitor’s brands so we know how we stack up?
The Houston Association of REALTORS® launched a consumer research panel less than a year ago and they now have a ready pool of over 6500 consumers who answers surveys every few weeks on a variety of topics. They are the first in the industry to take the bold move to talk to consumers directly on a regular basis. Houston has used the results to help define their rental initiative, refine their political advocacy efforts, confirm consumer interest in a variety of consumer-facing technologies they offer to their members and even measure the strength of the REALTOR® brand.
WAV Group is overseeing the project for HAR outlining topics for consideration, fielding the research, and identifying gems of wisdom that are informing positive change for HAR members. Bob Hale says, “We have learned some really interesting things from Houston consumers. They have opened up our eyes to opportunities that we are now addressing through technology, training and communications.”
Participants in the H.A.R. Consumer Research Panel have been recruited from consumers that registered on HAR.com to receive property updates. With a simple invitation WAV Group was successful in helping HAR recruit nearly 10% of those consumers invited that are willing to answer surveys monthly. The amazing news – none of the consumers in the panel are being compensated in any way. They are simply contributing their ideas to improve the local real estate market in Houston.
Brokers are now taking on the idea of creating a consumer research panel as well. They are using their panel to refine the elements of their website, test consumer-facing technologies and measure the performance of their agents. Importantly, these panels are doing double duty for these progressive brokers. Not only are brokers using their research panel to identify better ways to serve their clients. They are also using the mere fact they have a consumer research panel as a recruiting tool making it a win/win.
If you believe it’s time to start listening and responding more intently to what consumers have to say, we would love to talk to you. We can set up a research panel in your market too, making your organization the most well informed and the most well-positioned for long-term success. Feel free to reach out to me at Marilyn@wavgroup.com and I’ll be happy to tell you more.
Well done Marilyn!
I was engaged in a discussion yesterday afternoon with a forward-thinking group of Regional MLS Directors. 13 Shareholders are in the background of the conversation about whether to include some level of SOLD listing information on the new consumer-facing website to be launched June 1.
Without the proper context – consumers are the users of the listing websites who already have access to SOLD information as well as public records FOR FREE, the Shareholders overwhelmingly chose not to include any sold information on the new site.
It is clear that we need to do a better job of educating them about the competition and benefits to the MLS Subscribers. The question is simple to me: do you want consumers to come to your listing website(s) or not? If YES, give them what they want. After all, they can get this from at least 5 other sites right now, for free.
Keep up the good fight Marilyn.
Kevin McQueen – Focus Forward
Yes, Kevin, you’re right. The more the industry refuses to understand the real marketplace that consumers operate in, the more we threaten our own existence. I’m not sure why it’s so difficult to realize that without consumers, nobody get a paycheck. What other industry do you know that pays more attention to its own needs, than those of its customers? I can think of a few….how about Blockbuster, for example. They were more concerned about collecting late fees and maximizing profits that they refused to get enough of the most popular movies and refused to change their pricing structure even as Netflix was gaining significant traction. Look where they are now. Do we want to be the next Blockbuster? I sure hope not.
Chris from Zillow here. Great article and I agree with most of your observations but not all of them. For the record, Zillow is not attempting to replace agents. Many people love to create conspiracy theories around this but it is simply not true. Your article implies this as a “life-threatening trend” which I don’t think is accurate or fair. Zillow seeks to empower consumers to make more transparent and better informed decisions. We also know that good agents are the most important part of the transaction and seek to connect consumers with great agents when they are ready to connect. One item we need to keep in mind here in discussing the roles and needs of the various business models that touch real estate consumers is there are different phases that consumers go through and the needs of consumers are different in the phases. Not every model is needed in every phase nor are agents the center of every phase.
The best way I’ve heard to think about this was originally framed by Charlie Young who is now the President of ERA. I have to give Charlie the credit as he best framed the space we all operate in from my perspective. The phases are: Dreaming, Gathering, Initiating (shopping), Transacting, Owning. Each phase has different needs by consumers. Zillow excels in the first three phases where consumers tend to gravitate to a neutral third party and shop anonymously until they are ready to engage the agent community. We also have no desire or plans to enter into the transacting phase and firmly believe that great brokers and agents will always control this phase. In my nearly two decades in this industry on both sides of the fence, I’ve learned it is really hard for any business to be all things to all people at all phases of the cycle. Excellence comes from focus and we are Zillow are working hard to focus on the parts of the cycle where we are relevant and partnering with progressive brokers and agents to empower them to excel in their parts of the cycle. Thanks for addressing such an important topic.
Thanks for your thoughtful comments. The reason why I mention a “life-threatening” trend is because consumers have the Zillow brand top of mind more than brokerage brands these days. When consumers look to third parties first for real estate information and insights it weakens REALTOR brands over time. Brokers are more well-prepared to provide transparency and more informed purchase decisions, but they are leaving it to you to do the heavy lifting. Not fair to you and certainly not fair to the consumer. Brokers and agents need to step up and share their insights more effectively. Zillow is doing a great job of doing this because you ARE paying attention to the needs of the consumer, the point of the article.
Love your tact Marilyn.
Thank goodness for the foresight of Bob Hale and HAR; and a few others.
If we ignore our customer’s customer we ignore the genesis of our business.
I proposed an independent third party survey of all the buyers and sellers of closed sales in our MLS (not qualitative of the Realtor) a number of years ago to determine what kind of education/training an Association should provide Realtors. I was looked at as if I was from Mars.
The size of the Realtor organization is not its salvation – it is the quality and competence of the service provided to consumers by the practitioners.
First, you are the champion of re-focusing the real estate industry on the consumer and that is appreciated. Unfortunately, our industry is characteristically slow to react to the transparency created by the internet. Of course, we have had gate keeper mentality with our information for too many years and that became our one and only defining value proposition in the consumer’s eyes. It is also interesting to me that our industry has a reluctance to participate in agent ratings when we, as consumers, go there first to find a good restaurant, dentist, mechanic or CPA.
I find the Zillow response above quite interesting. While they don’t necessarily want to involve themselves in active brokerage, they are interested in monetizing the eyeballs and inserting them into the real estate revenue stream. Good business model that ultimately hits the broker’s pocketbook and, indirectly, the consumers as well.
Thanks again for all your contribution.