Jan. 4, 2012 - MLS Value and Brand: Looking Back and at the Road Ahead

The MLS industry has both an image problem and a value perception problem. Clareity’s talked about it before; nonetheless, the issue is still there, so we’re trying again in this post. It’s really a branding issue, but we’re not talking about dotMLS or even MLS-certified listings. The problem is that people, especially many MLS subscribers, think of the MLS as providers of the MLS system. In turn, they think of the MLS system solely as a place where listings are entered and searched. As a result, people make statements like, “Two more fields and Zillow could be an MLS,” and “Why are we paying for something people get for free on Realtor.com?” MLS organizations provide much more than a listings database. The industry needs to make sure everyone - especially their own subscribers - knows it.

To quote from Matt’s 2008 Council of MLS kickoff speech, in which he encouraged MLSs to increase their value:

Successful deployment of real estate information systems has typically been both the charter and strength of the MLS organization. However, there has been some tension because the MLS system—until now, the MLS organization’s primary function—was chartered solely as a system to facilitate cooperation and compensation. Today’s real estate systems need to go beyond that, including not just the MLS, but public records, transaction management, forms, digital document management, lockbox systems, showing scheduling management and feedback systems, listing syndication, professional-grade automated valuation modeling software, real estate customer relationship management and lead management, and  a bevy of other tools. [A] great deal of additional information also is needed to provide professional services, including unlisted property information from homebuilders and FSBOs, mortgage and foreclosure information, environmental information, agent and property ratings,  and community, school, and demographic information. To be clear, I’m not talking about just providing a library of additional information; I’m talking about well-integrated tools and information that help the professional provide efficient and timely customer service, unparalleled capability in interpreting the plethora of property and population information available, and highly reliable and secure settlement processes. [But] if MLS organizations are not re-chartered, re-missioned, and re-branded more generically as providers of information systems for organized real estate, we will continue to see pushback against the MLS organization offering systems that don’t solely address [the traditional core missions of] cooperation and compensation.
 

Of course, one of the main differentiators between MLSs and third parties with respect to that role is all of the work that goes into creating the most accurate data possible through manual and automated rule enforcement. Though challenges remain, the data quality work MLSs perform at the local level is another core MLS value.

Unfortunately, many MLS organizations are still experiencing value and value perception problems that Clareity has, since the mid-1990s, been encouraging industry leaders to work toward solving. Some MLSs, including many larger ones providing services to a large percentage of real estate professionals, have increased their value, providing some of the items mentioned above in a well-integrated fashion, bundling some in the core offering, and offering others as part of a tiered service or à la carte model. But there’s a long way to go. According to NAR’s 2010 MLS technology survey, only 8% of MLSs have intensive quality control, and only 43% have “some amount“ of quality control. That’s not great, since data quality is a key part of what differentiates MLS from advertising portals. From that same survey, we learn that just 14% of MLSs have integrated transaction management, only 19% have digital document management (not just attaching documents to listings), only 36% have integrated forms (auto-filling from MLS), only 47% have parcel maps with integrated tax data, and only 55% allow for tax auto-fill into MLS listings. We need to do better! MLSs that don’t have the resources, buying power, or operational efficiencies to provide professional-grade service will probably be absorbed by others over the next decade. Industry experts all seem to agree that MLS consolidation is in the future. The 69% of MLSs that aren’t considering it or planning for that future are probably not the ones that are going to survive. 

At the Clareity MLS Workshop and in Matt’s 2009 NAR speech on the “Future of MLS,” he introduced the idea of MLSs providing an “app store” to allow for further à la carte service offerings by MLSs, including a choice of the core MLS system as well as ancillary products at the agent level. This would allow agents to differentiate better within a market and for the MLS to offer more integrated products and services without raising core dues. Two years later, we’re starting to see that vision brought to life in Denver and other markets. But, as we’ve said many times before, the integrations will always be too limited without better data standards. We encourage MLSs not to sit passively by in the standards effort, as data standards are the rails on which your future business will run.

Also, many MLSs have gone through difficult times over the past few years as they and their vendors fell behind in offering “cross-browser” technology solutions. At long last, the industry has nearly solved that problem, but while doing so, it has mostly ignored the emerging use of mobile devices, offering only fairly limited tools to subscribers. This won’t work long-term. Mobile solutions, if designed well, can help agents be more responsive to consumers more easily and can help agents and consumers access the information they need when they need it. MLSs can’t just continue to offer a limited functionality mobile solution and fall further behind the free consumer apps being offered. 

But, no matter how comprehensive the MLS offering is, and even if the MLS offers it on mobile devices too, it won’t be any good if we can’t change the image of MLS with subscribers. Far too many subscribers have the misconception that the MLS organization just manages a listing database, not much different from that managed by advertising sites. This misconception results in constant pushback on dues and, of course, ridiculous blogs spelling out doom for MLS because it’s so easy to field a listing database, right? MLSs need to re-mission and re-brand to remain viable and valuable in the future.

In 2012, keep pushing, keep innovating, keep re-inventing, keep providing better value, keep exploring cooperation with neighboring MLSs—but most importantly, keep communicating the value of what you do. MLSs are not just managers of listing database software. Make sure your subscribers know that.
 

Jan. 5, 2012 - RE: MLS Value and Brand: Looking Back and at the Road Ahead

Very well put Matt.  Thanks for keeping this out there!

Jan. 6, 2012 - RE: MLS Value and Brand: Looking Back and at the Road Ahead

Well said and agreed Matt, we are a small MLS out of the list above we provide about 5 of those items, and I have presented another 4-5 to our board of directors here just to have the idea shot down as too expensive or not of enough value to bring to our members.  Out of the 5 that we do provide, they were hard fought battles with directors that didnt understand thier value or were not willing to pay a little more to have that feature.  The extra that have not been approved are the same thing.  What is worse is that then the membership asks us why we don't provide those services.   Any ideas on how to better present these in easy to understand ways to stress how important these tools are?

Jan. 6, 2012 - RE: MLS Value and Brand: Looking Back and at the Road Ahead

This is a hard time to sell members on anything that costs more money. I'll say that right up front. As I mentioned, I think there is opportunity, at least in some areas, for "a la carte" service offerings, perhaps with a revenue share back to the MLS - but traditionally those haven't worked out so well because MLSs are not consistently good at being a good channel partner and marketing to subscribers. Hopefully that's an area we'll see improvement in, in the future - MLSs will systematically sell subscribers on the benefits of what is being provided and what can be provided.  At any rate, if MLSs can pull in more money through partnerships or other ventures, those funds can also be used to improve the core offering - if they can resist the temptation to rebate those monies back to subscribers or reduce costs further. Also, as I mentioned, there will be a certain point where the smallest MLSs will have difficulty managing the bigger mission due to natural inefficiencies or lack of buying power - again, cooperation or possibly even mergers will need to be evaluated.