The constant speculation around industry disruption led me to attend Inman Connect San Francisco last August – a real estate conference exploring current industry trends and technology, and focusing on how agents can leverage the benefits of changes and innovations to grow their businesses.
From the moment I stepped into the conference, one thing was clear. We’re in a race. A race to secure our data and leverage it for the benefit of our customers.
As I walked through ‘start-up alley’, where potential disruptors lined up to tout their innovations, a clear theme came through. We need to better understand our customers and we can do this by analysing their data trail and using it to target a more relevant and valued service.
It made me stop and question whether we really know our customers.
One of the major themes at Inman Connect centred on how much agents should be paying for leads. It’s an interesting issue, so I decided to find out more.
Zillow and realtor.com are the major property portals in the US and, over the last 10 years, they’ve recognised the poor service provided by agents to their customers. They decided to do something about it by qualifying customers when they interact with their websites. They convert these qualified customers into buyer and seller leads and then sell them to agents.
For how much, I hear you ask? Their market-based pricing sees leads go to whichever agent is willing to pay the most.
Agents are now crying ‘disruption’ and complain about having to share their commission with the portals. But the failing is their own, because to date they haven’t provided a level of service that meets the expectations of their customers.
The frustration of some agents about this new reality was palpable as I moved on to learn about iBuyers.
iBuyers are pre-qualified buyers who are ready to make an unconditional offer on a property, based on data and without an inspection. Homeowners looking to sell can now access iBuyers directly through Zillow, without the need to interact with an agent. The service is still in its infancy, with only a few thousand transactions to date, and offers still seem to be on the low side – but how long will that last?
Already frustrated by the fact they have to pay for leads, our US counterparts are even more frustrated that they’re now being cut out of the equation completely as customers connect directly with each other through Zillow.
‘We’ve supported Zillow for the last 20 years. How could they do this to us?’ I could hear agents asking. I think a much better question is: How could you do this to yourselves?
It’s the same question we should be asking here in Australia.
We arrogantly believe we ‘own’ customers. We don’t – and it’s time to wake up.
The major portals thrive on an industry that’s divided. Let’s face it, we’re our own worst enemies. If we came together and shared our data, we wouldn’t leave ourselves open to these sort of moves by the portals. Instead, we arrogantly believe we ‘own’ customers. We don’t – and it’s time to wake up.
Despite the wonders of technology, our customers crave a high level of service and expect an outstanding experience – and they’re prepared to pay for it.
In the absence of service and experience, price becomes an issue and this is what drives customers to look for alternatives. They want value for the money they’re spending.
Unless we improve the level of service we provide and enhance the customer experience, we’ll continue to see downward pressure on our commissions and leave ourselves vulnerable to the possibility of living the nightmare of the US experience.
Let’s do something about it.