This month, David Gumpper and Victor Lund found themselves on several calls looking at new technology aimed at brokers, agents, teams, and MLSs. On any given week, we are updating our product knowledge across 5-10 companies. It is a challenging time investment, but it is a requirement for us to deliver informed perspective to our clients. Vendors tell us that we do this more than any other firm in our industry – a nice pat on the back.
We have a philosophy here at WAV Group. Simply stated, there needs to be a very good business reason to switch technology vendors. Drew Meyers from Geek Estate says that the benefit needs to be 10x to get someone to switch. Maybe 10x is not the factor to use in your decision making, but the point is that change is painful (consumes a lot of time) and unless you have a horrible relationship with the vendor, you need to set the bar very high to justify a change. The product you are moving to must be significantly better or significantly cheaper with equal functionality.
WAV Group is conducting a national study to take the temperature of the current market of real estate brokerage technology.
If you’re interested, please take the survey. By sending Michael Nash an email, he can provide you with the link and every participant will receive a free copy of the final report to inform their own future technology investments. We have not run the survey since 2014, and there is a reason. When we were running it every year or every 3-5 years, very little was changing. We think that the results will be different this time around. There has been a full-sweep rebuilding of nearly every product used by firms over the last eight years. The market is softening, and brokers are tightening their belts. Where will you be making cuts in your brokerage technology budget?
Sadly, despite all of the innovator awards and billions of funding going into disruptors, technology in real estate has been pretty slow to evolve. We don’t blame technology, but we attribute it to the understanding that the features needed to serve consumers trading real estate is pretty simple stuff.
There is a wide swath of good products for every piece of the real estate technology stack. Thanks to RESO, the collaborative effort to create interoperability across products, most solutions can be hot swapped. The technical side of swapping out one solution or another is simple stuff if you have the experience. The hard part is moving agents to the new platform and developing their skills at pushing the right buttons. The harder part is moving customers to a new platform. They get lost in the ‘Frankenstein of broker technology solutions’ very easily. Most brokers have nearly a dozen products and some are switching them up every year.
Consider this: disrupting the email connection between the agent and the consumer runs the risk of privacy and spam filters that dislodge the relationship. Switch out property search vendors and often you will break the customer’s saved search solution. One of the reasons why portals like Redfin, HowardHanna.com and others distance themselves from competitors in search is that they have not broken the automatic emails notifying clients when new listings or updated listings are available. The race is not to have the best search solution. The race is to stay connected to buyers and sellers. Consider the cost of getting a customer – our plug number for earning a customer is $500. Now multiply that by the number of customers you lose when you switch – roughly 5000. Argue the assumptions as much as you want; the opportunity cost of switching vendors that disconnects customers or burdens your sales associates is enormous.
If your technology sucks, your agents and customers will tell you. We have performed dozens of broker and MLS technology satisfaction studies this year (thank you to the WAV Group research team of Marilyn, Michael, Jason, David, and Gordon). This type of research tells you a few things. First, it tells you what you need to focus on. Secondly, it allows you to track satisfaction with the products that you have replaced to see if you have moved the needle. We segment the reports to show how each product impacts different demographics of agents and clients. Best of all, we can provide blind benchmarks against other companies to signal performance against your peers.
Be smart and strategic in your decision making. We are happy to help – just shoot us an email.