It’s no surprise to say that the real estate industry isn’t what it used to be. The pace is faster, the tools are different, the customers are savvier and the business has modernized to adapt to these changes.
Or has it?
Certainly, brokers and agents use “technology” to conduct many daily tasks. Whether it’s marketing with web sites, managing leads by email or coordinating deals with online transaction platforms, the Internet seems to be in the middle of everyday activities. Doing laptop presentations, checking email wirelessly and using PDAs – while still far from being normal – have also made their mark on business practices. Yet for all the costs, all the time spent in training and all the effort in the world, there still seems to be a big gap between “using technology” and “working smarter” in the business of brokerage. And part of the reason seems to be that the way we merely are “using technology” to speed up outdated and ineffective practices.
For example, we have known for decades that the practice of advertising listings in the newspaper has had waning effectiveness; yet brokers continue to “automate” this function by purchasing expensive programs to streamline the placement of print ads. Old practice, still ineffective, just done faster. Agents purchase “databases” and populate them with street addresses in the hopes of printing labels for postcard mailings. Expensive marketing activity, printed faster, with paltry response rates. Web sites spread the credentials of real estate agents, when consumers say they’re far more interested in learning about homes. And email leads asking for more information about buying or selling receive response-essays on a particular person rather than additional information about the process.
What’s the trend in these technological disconnects? One answer is to measure how technology is being applied to customerize your business. The concept is simple: real estate is no longer a supply-sided industry with REALTORS controlling the process by which consumers gather information. So what’s needed today are more demand-oriented uses of technology to align the process with consumer habits. To customerize your business using technology means to make your process work the way the consumer wants it to work. That means much more than just “speeding up” practices that are outmoded supply-sided activities.
To customerize using technology, you have to ask; How is the consumer expecting me to use technology to meet their needs? Let’s review our previous examples to see how they could be done differently using the same technologies. Let’s begin with media advertising. Instead of using software to create classified ads or upload them in bulk to publishers, consider that newsprint is no longer the primary source of information-gathering by prospective buyers. So, if the Internet is where the buyers are starting the process, then they demand that your advertising be placed there if your systems hope to meet their demand – and make a sale.
Programs that create faster classified ads – replete with ridiculous abbreviations no GenX’er could ever figure out – simply spend marketing money faster for consistently ineffective marketing. In a customerized approach, your software should be aimed at creating online marketing as fast as possible. Even if it’s creating classified ads, your goal should be something like Google AdWords which are published in real time online and respond directly to consumer search trends to trigger context-sensitive exposure. The use of technology to write “ads” will only work if the ads are placed where the consumer demands to see them. If your systems are demand-oriented, then running ads have to be demand-transformed. They need to be customerized to go where the customers are looking.
Next, let’s consider databases. It seems unreal that agents will purchase $500-plus software programs to create mailing labels, yet that’s the most common supply-sided abuse of technology in the industry. It’s not even important that the agent is not getting their money’s worth out of programs packed with features to manage listings, generate virtual tours, create online transaction reports and keep schedules up to date on their PDA. In fact, it seems likely that the agent really isn’t interested in money-matters at all if they are spending money on postage like it was still two-cents-a-stamp. The core issue once again is that the use of postcards for promoting listings (or themselves) is essentially a supply-sided activity. They assume that because they send postcards that consumers actually respond to them.
So the assumption leads to another misconception: that more postcards sent faster will lead to more consumers reading them. And we all know that just doesn’t work – or the agent goes broke too soon to sustain the volume of cards necessary to make it pay off. No matter how cheaply in-house postcards and labels can be produced – even in color – and even if we write off the issue of postage as a business expense, it doesn’t change the fact that consumers aren’t responsive to learning about real estate by postcard. The evidence is in the massive failure rate of mailings – 97% of recipients never take action and contact agents as a result of getting a postcard. Sears learned this: when was the last time you received their catalog in the mail? Buy.com learned this: their technology deals are exclusively marketed by email. Even GQ’s last edition was thinner than the Sunday comics page; advertisers aren’t packing the magazine with expensive delivery-dependent marketing.
Transforming direct marketing with technology means customerizing the actions.
- Alerting buyers to new listings needs to be done by email alerts.
- Announcing price changes to other agents should be done by text messages directly to their cell phones. Promoting properties should be done by uploading 50 photos per listing on your company web page.
- Promoting yourself as an agent should be done by networking online using instant messaging, community message boards and e-newsletter campaigns. Doing all of these activities won’t make a difference just because they are done with technology, but because the use of technology delivers the “message” in the way that the consumer wishes to encounter it: on the web, on cell phones, by email. Even the cost savings isn’t the point. Getting the message out is only effective if you can actually get it read.
Finally, consider the huge gap between receiving Internet leads by email and actually converting them. While basic challenges remain – like getting agents to respond quickly and creating good incubation habits – the more important problem remains. The use of email to respond to leads (or even generate them) still suffers from supply-sided thinking. Agents send out emails talking about themselves, not what’s of interest to consumers. For example, 45% of consumers who receive e-newsletters sign up for services that discuss home improvement or ownership issues; yet 99.9% of agent prospecting emails are back-patting ego-trips, and that’s only when agents actually respond to emails, which is statistically 50% of the time (or, when they feel like it 54-average-hours later).
A customerized prospecting campaign or lead-response strategy would focus heavily on what the consumers want to receive: even more photos of particular listings, virtual tours, finance information, ownership tips and other personally-important-to-them information. Ironically, even REALTORS® don’t act like this in person. Ever see one walk onto a car lot and ask for the car salesman by name? Of course not. They’re looking for a particular car model because that’s what is important to them. Customerizing the process means ensuring that your email responses and marketing campaigns are easy to receive, contain consumer-demanded information and provide consumer-friendly ways for them to interact with you – by email, instant messaging or, in worst cases, by phone.
Ultimately, it’s not technology that “makes” sales; it’s a systematic approach that is aided by technology, that wins or loses. Technology can speed things up or manage more volume. Ironically, this means that the pace of success – or failure – is faster and wider. After almost a decade of databases, web sites and email marketing, what’s finally needed is a change not in the tools, but in the perspective. As consumers have become accustomed to technologies that can save “My Accounts” and other “my” personalizations, real estate strategies likewise need to customerize their technology to deliver information and service in the only way that counts - The Customer’s Way.
This article was authored by Matthew Ferrara of Matthew Ferrara Seminars, Inc.
Reprinted with permission of Matthew Ferrara Seminars, Inc.