Sometimes Zillow Group does something that aggravates the industry, like displaying agent reviews. Other times Zillow does things that not only aggravate the real estate industry, but they point to profound best practices that are a roadmap to success. When brokers pay attention, they can learn a lot.
Recently, Zillow Group announced to their Premier Agents that purchasing advertising on the site is no longer enough. Zillow only wants agents who are going to nail the response time and deliver a great customer experience. Premier Agents who are not responsive or do not deliver a great customer experience, even after coaching, will be demoted from the site.
I am sure that some of the Premier Agents are going to be aggravated by this. Agents who have the advertising budget to purchase Premier Agent advertising are, as you would imagine, busy agents. The agents spending money on Premier Agent are producers who are hustling. They are with customers throughout the day negotiating listing agreements and purchase contracts. Sometimes they don’t always have enough time to deliver the best service. Zillow’s new service allows agents to pass on an inbound lead – that lead then goes to another Premier Agent and the first agent keeps their position in the queue for future leads. But if that agent accepts the lead and the customer experience is poor, or if an agent prequalifies a lead that is not hot and blows the client off, Zillow will not be happy. Agents will get demoted if they do not treat every tire kicker like a five-star customer.
What Zillow is really doing is raising the bar on serving the consumer. That is the signal that they are sending out to the brokerage and agent community. Our industry needs to get better. In 2013, WAV Group did a broker and agent responsiveness study. You can read the Agent Responsiveness Study here. Response times are horrid, and more than half of our inquiries did not even get answered. For an industry so focused on driving leads, that is pretty poor performance. I can only assume that Zillow has the same business intelligence.
Zillow knows exactly what the response times are and who the best agents are at helping the online consumer navigate the homebuying and selling process. Heck, brokers know this too. Brokers throw leads over the wall to agents every day and see the results. Something like 1 in 100 online leads convert. If you are really good at lead conversion, you may get 12 out of 100 to convert. But for the most part, the industry is pretty poor at customer service if the consumer is not ready to transact right this minute. Moreover, automated responders and drip campaigns have largely failed.
The best level of customer service that we have evaluated today is in the referral and relocation area of real estate. There is accountability there, but that is mostly driven by the notion that the customer is definitely going to transact. Zillow wants to deliver that level of customer service even when the customer may not transact. And they should. So should the broker.
This sea change from Zillow should be good for teams. They are the most likely group to have a dedicated lead management specialist. It should also be good for large brokers with a dedicated e-team. The philosophy is simple. Every customer, regardless of lead quality, should be treated as your only customer with the goal of making them a customer for life. Yes, you will be focused on an investment of tireless effort into people who may not be looking to buy or sell today, but that person needs to live somewhere. If they do not like where they are at now, you know that they will want to move somewhere at some time in their future.
There is so much research that backs up this strategy. Eighty percent of real estate transactions are reported by agents to be repeat or referral business. The number one reason why a consumer does not use their agent in the future transaction is because the agent did not stay in touch. The second reason is that the agent is no longer in the business (huge opportunity in real estate). The third is because they were unhappy with the performance of the agent. At closing, consumers indicate that they are more than 90% likely to use that agent in a future transaction. Good news here is that consumers like their Realtor and that Realtors are pretty damn good at their job most of the time.
Plan Your Work and Work Your Plan
Let’s assume that an agent has 2000 target customers with the goal of touching all of them on a regular basis. Let’s also assume that the agent is only going to prospect and refresh relationships 5 days a week (use the 250 days per year number). Weekend are for closings and family. To call all of your customers at least once a year, you need to make 8 calls a day, which takes less than an hour. By the way, common wisdom is that 150 phone calls will yield about 10-15 conversations. Great agents use auto dialers.
I am a big fan of emails to customers that have great content. The best content is an email that tells them what their house is worth. The open rates are about 40% and you can automatically send them once a month. But that is not enough. Agents should be checking customer
Facebook pages, and sending personal emails and text messages to check in with customers. There are millions of reasons to reach out to people in authentic and engaging ways. Just do it.
Door knocking continues to work. But if you do not like it, get creative with your community engagement. Hold events or set up customer hospitality tents at local events. I know a great agent who has a tent at our farmer’s market where he hangs out every Thursday night just to say hello to his clients and answer questions for anyone that stops by. Others sell cheap water or BBQ sandwiches at weekend car shows and swap meets. Some are engaged in Rotary or charity groups. Another is a constant sponsor of the high school sports events. Some agents do not miss the philharmonic, opera, or ballet. If you are in a professional or college sports town, organize a tail gate and give a drawing for tickets in your email campaign. Trust me, people are gathering somewhere every day. Find a way to be there if you do not want to knock on doors. Just do something.
By the way, Zillow has the business intelligence to know their lead quality. They can take any lead, hit their living database and know where they live now. They can also track lead conversion by looking at their public record database. I am sure that lead conversion data at Zillow is complex, and I can also assure you that they have data scientists cutting though that data every day. Former Trulia and Zillow exec, Pete Flint just published data that says that buyers take 4.3 months to buy and sellers take 2.8 months to sell. They know that their leads are good.
Simple closing statement.
When You Have a Customer Record, Follow Up Until They Die.
Thank you Zillow Group for pushing the industry. You are giving the industry a roadmap for success.
For brokers with more than 300 agents who want to find remarkable improvements in their lead conversion rates. Call WAV Group. We can sort you out. You may not like the decisions that you need to make. The decisions may piss off some agents. But at the end of the day, your company will be better for it.