Portal Combat! Looking Into Real Estate’s Inevitability
Charis Moreno, VP of Franchise Sales at Next Home drew in a huge crowd at the Revaluate NAR Stage for her presentation “Portal Combat” that examined the Real Estate Portal war and forced people to ask some tough questions about their business. Her presentation in its entirety is in the video below.
Change is inevitable.
Transformation is optional.
It’s easy to complain about Quicken, Redfin, Zillow and PurpleBricks changing the industry, but what good does it do? They have built what consumers want. If we want to meet the consumer’s desires, then we need to transform. The 2nd option is to stagnate while looking backwards to the way it was.
At its peak in 2004, Blockbuster was massive and had over 9,000 stores. For comparison, that’s significantly more locations than Keller Williams and ReMax…combined. Blockbuster’s business model made most of it’s money on late fees. Customers voiced their displeasure, yet leadership didn’t listen to their clients.
Then along came Netflix. Merely six years brought Blockbuster the behemoth from peak to bankruptcy. Currently, there is only one independent Blockbuster remaining in the US. (Bend, Oregon)
It wasn’t a technology gap that allowed Netflix to decimate Blockbuster – it was simpler. (Remember back then Netflix was received not streaming, but via the USPS) Netflix had a customer oriented focus. Netflix simply wanted to improve the user experience – and dominated at doing so. They removed late fees, and removed the frustration of returning a video on Monday morning. Removing that pain resulted in delighting an avalanche of new customers.
A Quality Experience = Success
Gas stations are drab and utilitarian and their coffee costs 5x less than high end chain coffee, yet Starbucks has an $88B market cap selling “overpriced” coffee. People will gladly pay more for a better experience (they will even wait in line for it). The focus-group crafted atmosphere combined with friendly name oriented service defines this quality experience and sets it apart from the aforementioned “competition”. Statistically speaking, 82% of millennials will pay more for a better quality experience across the board.
If you have spent time at a real estate or mortgage office – does the atmosphere reflect the significance of buying a home? This should be the happiest moment in many people’s lives – yet most offices feel like a drab, utilitarian attorneys office. Is your space more like a Starbucks, or a gas station?
Create an atmosphere that reflects an awesome experience that is buying a home and pair it with excellent customer experience and people might even wait in line for you.
Great experiences are in demand as consumers are desperate for great service in real estate. So desperate are they, that more consumers now trust a “media company” (Zillow says they are a media company since they sell ads) for their real estate advice, not realtors.
Here’s some data to back that up:
63MM unique visitors/mo on the official website of NAR, Realtor.com
193MM uniques visitors/mo on Zillow.
Realogy, the largest residential real estate company/conglomerate is spending $120MM on consumer marketing, and holds $2B in debt.
Meanwhile, Zillow spends $200MM/year on consumer marketing and is raising $1B to continue to innovate (Read: iBuy homes).
Your clients are loyal
According to NAR 2017 data, 82% of homeowners say they will/would work with their prior realtor. However, only 23% did.
The #1 reason consumers didn’t work again with “their” agent? It’s simple: The Realtor didn’t stay in contact with them post transaction. Charge high fees and ignore clients? That is Blockbuster-lackluster poor service.
The war is over
The portal war is done & Zillow won. Stop fighting the portals. Refocus your attention and efforts. Frequently, realtors spend to much money buying leads, while ignoring the people in our own databases thus shooting themselves in the economic foot.
Tech won’t replace the realtor, better service will
You can’t provide poor service when customers expect to be delighted.
The biggest problem for the individual, team and brokerage is the inability of today’s Realtors to articulate their own value – perhaps because they don’t know what value they should bring to the table.
This is a service industry. Outshine the drab and execute delightful service while providing an amazing experience celebrating home ownership for past clients and future prospects.
Fix that glaring issue, and you can increase your successful business in the shadow of the portals.