As a Founding Partner at WAV Group consulting, I have the opportunity to talk to fund managers about their investments in real estate. Some investors are focused on supporting public companies such as Realogy, RE/MAX and others are betting against them with short positions. The truth is that we do not ever know the position of the investors when they ask questions. We just answer them as best we can.
On a call this morning, I was asked a profound question about customer experience in two parts.
Part 1. What brand has the highest customer satisfaction rating?
Part 2. What brand has the highest agent satisfaction rating?
These questions illustrate the importance of the customer experience for investors as they consider their investment strategies. Research from Bain & Company shows that companies who drive loyalty through great customer experience see increased growth and reduced costs. Also, Watermark Consulting findings show that customer experience leaders dramatically outperform the market.
As a leading provider of research to technology firms and listing services, we measure product and service satisfaction. We run a number of consumer panels to find out how consumers value the experience with Realtors® to influence Association strategy, but we have never benchmarked separate brands. I know that Century 21 wins the JD Power Award each year. But that does not tell the whole story.
Customer Experience has become a science. McKinsey & Company found that measuring journeys is much more impactful than measuring individual touchpoints. With multiple touch points in a customer journey, they have a cumulative effect on the overall experience. Benchmarking satisfaction can be helpful, but benchmarking metrics will not tell you where and how to improve the customer journey. Regardless of a brand’s rank and score, organizations who are growing and innovating are constantly looking for ways to improve. Simply watching scores will not drive these outcomes.
Listening to feedback on the customer experience throughout every touchpoint is not as easy as simply flipping a switch. Many companies talk the talk about listening to the customer. But actually understanding and acting on the voice of the customer is very difficult. However, this can be done with the right technology and thought leadership. As an example, Medallia has spent 16 years building technology and best practices by working with some of the most innovative companies in the world like Mercedes-Benz, Hilton, Farmers and many more. They measure the customer experience at critical touch points, combine that information with operational data through real-time analytics and provide actionable insights throughout the organization in order to act on the feedback and drive improvements. As a note, Medallia helps 8 of the world’s 10 largest hospitality brands with a single unified platform to manage guest satisfaction and social reputation.
Here is a real-life example. Recently, I checked into a Marriott in San Jose and they gave me a Dad Card. They knew that I was a father, and the Dad card gave me happy hour pricing on drinks and snacks throughout my stay and a bunch of other stuff. They have hundreds of millions of customers, yet somehow, they seem
to know me! If I provide feedback to Marriott that my check in experience was not a good one, they know in real-time and can address it while I am still with them, this dramatically increases loyalty. If my overall feedback from a stay was subpar, they can follow up with me if needed and take immediate action or take action the next time I check into one of their properties, perhaps by offering an upgrade, or some other amenity.
They see me as a customer for life. They probably know that I travel 120 days a year. I am certain that they know how often I stay at their properties. After the Starwood acquisition, Marriott has 30 brands under their flag, which added complexity to their business, but with the right technology to empower their culture, they still listen to my feedback and get it to the property level for action. They do this intelligently, knowing and my behavioral history and my preferences for their brands. I am also sure they use the big data and analytics to look at all of the feedback from all of their properties in a systematic way to drive innovation accountability across all brands.
The real estate industry can learn from the hotel industry. Does the real estate industry listen to our customers? Do we take action on what they say based on what we know about them? Does Realogy or Home Services know the preferences of customers between brands? Do they know the preferences of customers between agents? Can they distribute that information in real time to action the voice of customers or agents? Does the National Association of REALTORS® know a good Realtor from a bad one? Do brokers recruit on dollar volume or customer / agent experience? Do MLSs know the satisfaction levels with their products and services and focus on know specifically how to improve? Is customer experience measured to impact Board of Choice?
The answer to all of these questions is NO!
Does anyone doubt that customer experience drives profitable growth? Nope! Gartner says “89% of companies are competing on the primary basis of customer experience.” Why has real estate overlooked this?
Maybe we are seeing the signs of change. John Peyton, new President of Realogy Franchise Group was previously the CMO at Starwood (now part of Marriott). He must appreciate the value of a unified view of the customer across their journey and across all of their brands at a deep level. His statements show he believes in loyalty economics. “The question then becomes how our industry alters our behavior to welcome them as renters and engage with them as customers for life.”
My answer to the investment community was that real estate is not measuring or acting on customer experience. But I think that day is coming soon. For example, if Realogy brands begin to listen to feedback to identify and fix the rough spots in the relationship between the consumer, agent and broker they will increase the value of their brands and increase production. A great place to start would be getting actionable in-app feedback on Zap; that would help drive innovation and adoption to increase the ROI on that technology investment while improving the productivity of ten’s of thousands of agents. Even more importantly, that would provide Realogy real insight by marrying the operational data of customer record, agent record and voice of the agent experience. This could be further combined with customer feedback based on the journey from that transaction to really highlight how experience quality is affecting customer conversion and agent retention and productivity.
Consider this, under Rick Davison’s leadership, Century 21 grew despite cancelling a record number of under-performing franchises. He raised the bar. If Realogy can apply the technology and best practices used to power innovation and loyalty in Hospitality and many other global franchise businesses, this will raise customer expectations for the industry. We need it!
Here are a few key steps to take that would drive higher conversion rates and loyalty for customers, and retention and productivity for agents:
- Intelligently listen to feedback from customers and agents from key touch-points in their journey
- Identify areas of friction and quantify the impact these issues are having on the business
- Prioritize the most impactful and important areas of friction
- Empower everyone from the agent, office, brokerage and corporate to drive accountability and improve the quality of the service they are providing
- Conversely, find the areas of delight, understand the business impact and invest appropriately to drive empower the organization and drive best practice adoption
In short, my challenge for the real estate industry is to focus on the customer and agent experience. Doing so will create sustainable differentiation and a competitive advantage. This is true for brands, true for REALTOR® associations, true for MLSs, and true for brokers. You need to instrument every touch point and drive innovation. Pull out your Dad Card!