Prospecting, listing and selling have always been the three key behaviours to master in real estate. But a new skill – data mining – needs to be added if the industry is to thrive into the future, according to an industry leader.
Mark McLeod, CEO of Growth at Ray White, told a recent conference of commercial agents that those who did not embrace ‘digital behaviours’ are being left behind by the changing expectations of consumers. This is creating space for ‘digital usurpers’, such as agent search sites like Open Agent and new models like Purple Bricks, to enter the market.
“Stop acting like agents of the past,” he told the audience. “If we don’t get our act together, our usurpers will get through the digital door.”
Mr McLeod said that digital behaviours include excellence in database management, strong communication plans and managing the entire customer experience from start to finish – not focusing just on the listing and sale.
“Open Agent doesn’t have any agents and doesn’t do open homes but claims to have done a multitude of transactions last year. Clients are going through these digital doors whether we like it or not,” Mr McLeod said.
“If customers don’t get what they want from services in this day and age, they will go to the digital solutions where there is less friction. And there is just too much friction in the process of real estate currently.”
Mr McLeod told the audience that agents with good communication plans that connected them to property owners had higher commission and success rates.
Research by Ray White into how their agents use their data revealed that a solid database could expect 10 per cent of its contacts to be listing their property at any time. Yet 55 per cent of clients within an office database typically dropped off due to a lack of communication, having a significant impact on the number of leads agents could expect. In addition, data that was not regularly maintained had an attrition rate of 12 percent per year, Mr McLeod said, making it inaccurate and unreliable.
“We need to start acting like agents of the future because our customers are demanding it,” he explained. “We have to build businesses in line with where our customers are at, and that’s recognising that you can’t build a relationship with clients by spamming them with weekly emails or newsletters. You need structure, digital tools and a transparent client-centric process that will allow for data-driven decision making.”
To execute this, agents need a strong support team made up of people with expertise in these new areas.
“If you think you can be a single agent into the future without a support team, you are delusional,” he said.
Three key areas where agents need to improve include:
1. Response time
Mr McLeod identified that 78 percent of consumers expect a response to their online inquiries in 30 minutes, while 94 percent expect a response within an hour. “We expect instant service in every part of our lives but we don’t give it in the world we work in, which is madness,” he said.
2. Contacting leads more than once
Mr McLeod identified that 40 percent of leads are usually contacted only once, leading to a conversion rate of about 48 percent. But Ray White research showed the quality of the lead and the likelihood of turning it into business improved considerably with each new contact, with 93 percent of leads converted by the sixth call.
Mr McLeod said agents who judged the quality of their leads by having a mobile phone number needed to rethink.
“There is no point judging the quality of the lead by having the phone number when the only people who use the phone as their primary majority communication method were all born around 1944,” he said. “Agents need to embrace the technology that allows them to respond the way the client wants – not the method preferred by the agent.”
3. Understanding your clients
Cold calling on cold topics is a thing of the past, Mr McLeod observed, thanks to social media.
“Social media reveals people and their lives, so do your homework before you meet a client and understand what’s important to them so that you can genuinely engage,” he said.