Apr. 1, 2008
In a recent interview I was asked a series of questions concerning the future of the real estate industry.
1. As an "industry visionary", what do you see as the major changes occurring in the real estate industry?
a. More online marketing by brokers and consumers. Predictive Marketing will be more understood by the real estate industry, as it is by other industries. Predictive Marketing provides the information which leads to relevant (more effective) marketing.
b. More Single Sign On (SSO), between associations, MLSs, vendors, possibly other players in the transaction
c. Security and Privacy Issues becoming more important and the possible rise of “trusted” anonymity technologies.
d. Listing Content Syndication, not only to the web, but to other forms of media as well. Distribution trumps destination as content moves to where users are.
e. Social networking technologies will expand the reach of your brand. That means engaging/enabling school groups, homeowners associations and business groups in online conversations. Today those conversation are happening at Yahoo, Google, MSN, AOL, etc.Tomorrow they will be on RealTown (http://RealTown.com. Realtown will create a new venue for those conversations to occur on REALTOR® terms.
f. Lower commissions (after the current slump)
g. Multiple transactions between consumers who “find each other” on the web and packaged and brokered for lower negotiated commission
h. MLS losing its importance and relevance, which, without reconstruction of its value proposition, faces extinction
i. Artificial intelligence software to assist buyers and sellers, possibly minimizing the role of the real estate professional
2. What major "corporate players" are driving changes and what may be their impact?
So, who or what will drive change in this industry? The consumer, and the technology and the defining of business and personal application of the technology will continue to drive the change. Demographics will continue to drive the change. World connectivity will continue to drive the change. The $100 computer project, the theme itself, will drive change.
In real estate, we see companies like Google, CraigsList, e-BAY, Amazon with the potential to take advantage of a changing world. If the industry is too slow to recognize and integrate technology to meet the needs of consumers, these companies, or companies like them will be the agents of change. The impact could be that MLS is no longer needed as a source of available inventory. The role of marketing property will cease to be a role provided by REALTORS and so a new value proposition must be created.
3. Who are the "individual trendsetters" that are shaping the future real estate industry?
Organizationally, I see the California Association of REALTORS and the Houston Association and their subsidiaries as the closest thing to “trendsetters.”
CAR is introducing a software solution they are calling Forms Advisor. It is a form of artificial intelligence transaction driver with great potential. CAR is also pushing for seamless access to MLS data, a move which could extend the life of MLS.
A real courageous and innovative individual trend setter is Bob Hale. He has done things contrary to the conventional wisdom and I believe he will continue to do so if he feels the changes are beneficial to the REALTORS he serves…and he understands that REALTORS must serve their audience, the consumer.
RealTown (http://RealTown) will continue to lead the industry in the application of community, community created content, and social media applications such as blogs, referral networks, local online communities..
Point2 Technologies – Leading in syndication, predictive marketing tools and analytics, international listing platform
4. What are the expectations of the emerging real estate consumer?
This hasn’t changed over the last 10 years…Speed, Convenience, Choice, Value Added, Quality, Service, and Information.
The Real Estate Professionals and companies that survive the major changes taking place in this industry are those that can quantify what they do and how they earn their money, those who can create a "compelling argument" and "value proposition" for the consumer.
One method of doing this is to look at what consumers, not just real estate consumers, but all consumers are looking for today as they shop for products and services. These items can be referred to as "Consumer Demands" and when you look at what you do, how you do it, and how you market it, bring as many of these driving forces to bear as possible:
Speed - think of fast food. The quicker you can take care of the administrative aspects of a purchase or sale, the more valuable you are to the consumer.
Convenience - think of Seven Eleven stores. Also remember that people will often pay a premium for convenience. What do you do for the convenience and comfort of your clients?
Choice - the more alternatives initially, the more consumers like it, but then they narrow it down. Don't we all enjoy choice from ice cream (31 Flavors) to Coffee (Starbucks). What can you do to give your client more alternatives.
Value-added - people like to get MORE than they pay for, this is value added. Real Estate Professionals provide value added services everyday, but few take the time to re-enforce it to their clients. Have you ever cleaned or painted a house for a client after a sale? Helped them move something...or something like that, an extra, that WASN'T in the listing agreement but you did it anyway? That's "Value Added"
Discounts - If it is convenient enough, you will use a coupon. Lots of people look for discounts in everything they do. This doesn't mean you should offer discounts, but you must be aware that for many this is a "driving force" so play to your strengths in your marketing
Quality - Are you willing to pay more for quality? Many people are
Service - think of Nordstrom's which prides itself in its service. Think of Hertz...number One in their business and also the most expensive. Isn't that what you would like to emulate, to be the most expensive and Number One?
Information - this is the age of information! Consumers won't BUY a toaster or a microwave without first buying a copy of "Consumer's Guide", let alone a piece of real estate. Make it quick (speed) and convenient for your clients to GAIN access to lots of (choice) information.
Deliver the above at every available opportunity and your clients will not only love you, they will send you more business.
5. How should the Brokerage and Realtor Association / MLS respond to these real estate consumer expectations?
Create the tools and environment for greater participation and greater access to information, hopefully within the context of the real estate acquisition process. Integrate Web 2.0 concepts and technologies into your web presence as you consider even, web 3.0 and what that might mean to an information based industry such as real estate.
Social networks matter more than websites – The key is to be found. Brokers and agents need to create a presence in the social networking area. Places like MySpace, FaceBook, Zillow, RealTown, etc are relevant to marketing today.
The rise of social media is creating a new form of marketing altogether called Social Influence Marketing (SIM). SIM is about employing social media as part of the entire relationship lifecycle that extends beyond the sales campaign and the point of transaction. Being in the Center of the transaction will only be possible if real estate professionals are in the center of the “Conversation.”
Learn how to maximize the marketing advantage of these different venues.
The consumer is more and more of a new generation, and has different expectations of real estate and of the home buying process, and those expectations will continue to evolve and change with the Digital Generation and their successors. Just about anything one wants to know about is at their fingertips. More informed, connected consumers will require that real estate professionals be more connected and informed. Marketing methods and expectations will change with the technology.
Marketing remains a key component of a real estate professional’s job description. Market yourself, market your services, and market your listing should be your mantra.
6. What changes should a Brokerage implement to ensure profitability in the future?
Technology to allow for more efficiency in all aspects of the business. Close more deals faster with less overhead. Provide more information to consumers and provide the tools to streamline the homebuying process.
Predictive marketing techniques – understanding more about your buyers and sellers based upon their online behavior. Website solutions like those provided by one of my companies, Point2 Technologies (http://Point2.com)
Listing content syndication – Because consumers do not go to one web site, brokers should make their listing content available in as many places as possible. Being able to make this happen with a minimum number of “key stroke” is essential. Place the listings into one data base and have that content distributed to hundreds of points on the Internet, and to other media outlets.
Reporting and analytics of syndicated listing content – Being able to measure the results of the syndicated content partners will allow for more cost effective use of online advertising budgets.
Understand that the REALTOR will never be in the center of the transaction if they are not in the center of the conversation about the most important aspect of most people’s lives, their home.
7. What role do you see the Realtor Association / MLS playing to ensure Broker profitability?
Single point of entry for syndication of content
Education
Political Advocacy
Professional Standards
Facilitate online social and business interaction
8. Based upon your vision of the future of the real estate industry, what are you doing to help influence positive change?
What I have been doing since 1995 – Crusading.
Previewing emerging technologies, help determine their practical application in the industry, and socialize those technologies and applications within the ranks, Brokers, agents, Association and MLS executives and volunteers. Also developing applications and tools for the industry. Our latest is VoteSafe, an online voting application we have created with our partners, Clareity Consulting.
9. What books would you recommend as a "must read" that have influenced your vision?
The World is Flat
The Long Tail
Tipping Point
Wikinomics
Good to Great
Generation Digital
10. What advice would you give Brokerages and Realtor Associations / MLSs to assure they stay relevant and successful in the future?
Remain flexible and develop revenue streams other than MLS.
Redefine your value proposition and what you charge for what you deliver.
Be different, as the choice is to “Be different or charge less.”
Make all members become e-PROs…maybe even provide the financial backing for a more technologically advanced real estate professional.
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