By Marilyn Wilson
I can’t tell you the number of times I have had a conversation with someone in the real estate industry in which they tell me that the consumer is NOT their client. We prefer to think of the agent as the primary audience and simply ignore the fact that agents do not provide the checks.
As the saying goes,…. “Follow the money.” If you want to succeed in real estate, you have to address the needs of those that secure mortgages to buy and sell homes, not simply those that get a commission check from the sale.
That seems like a simple concept, doesn’t it? But a consumer focus simply eludes us in real estate. Every business model in the industry helps us justify the fact that it is all about the agent. Associations need members for advocacy so they focus on agents. MLSs need agents to fuel investment in technology so they focus on agents. Brokers need sales associates and technology fees so they focus their energies on recruiting agents.
Is it any wonder that the industry’s reputation with consumers is not as stellar as it could be when we focus more on our own needs than theirs?
As the former Senior Vice President of Marketing for Fisher-Price toys, I come from the world of consumer marketing. While there, I learned that as soon as you start to focus more on your own needs than those of the consumer, you get in trouble. Whenever we tried to make products that were less expensive to produce, for example, the quality of the product suffered and we would lose market share. Whenever we focused more on what Walmart needed than what the three-year- old that would be playing with the toy needed, we lost market share.
In the real estate industry, we focus more on what the agent needs than what the ultimate consumer needs. We’re hesitant to provide them information about agent ratings, for example because it is not always comfortable to the agent. We ignore the fact that more and more consumers rely on this type of customer feedback. In fact, agent ratings are now the fourth most popular way to find an agent in Houston.
I am passionate about trying to change this very dangerous and potentially lethal belief system we cling to. We fundamentally believe that agents are more important than the people who actually secure a mortgage for a home. It’s more than time for us to open up our eyes and realize that when you ignore the needs of the buying public, it’s only a matter of time before you get replaced…. Oh wait, isn’t that already happening? When you ask consumers what brand they think of when you say real estate, they say Zillow. When you ask consumers where to find an agent, they tell you Yelp. We’re already losing a ton of ground because we refuse to believe that the needs of the consumer have to be considered and responded to, even when their requests are uncomfortable to us.
Why does Zillow exist? Because the industry refused to provide AVMs. Why does Yelp exist? Because we fundamentally believe consumers are not well equipped to provide feedback on the transaction, so why give them any transparency into customer feedback from past transactions.
There are new models emerging now that are centered on information we simply refuse to provide to consumers. According to a recent study conducted by the Houston Association of REALTORS®, 96% of consumers are interested in learning about the transaction volume of agents.
There is a new company emerging called Homelight.com that provides this information to consumers. They already have more than 30,000 agents signed up for it around the country. As an industry, however, we refuse to embrace sharing this type of information. Whenever we do that, we open up the door to new competition. Every time we allow a third party to become the information expert, we weaken the goal of keeping real estate professionals at the center of the transaction.
So how do we change this life-threatening trend?
How about involving consumers in the conversation? What if we ask them their opinion of technologies we are considering? Get their input on what they believe are the biggest weaknesses in the industry today. Solicit their opinions on pending legislation affecting real estate. Ask them about their perception of our brand and competitor’s brands so we know how we stack up.
The Industry’s First Consumer Research Panel
The Houston Association of REALTORS® (HAR) launched a consumer research panel less than a year ago and now has a ready pool of more than 6,500 consumers who answer surveys every few weeks on a variety of topics. They are the first within organized real estate to take the bold move to talk to consumers directly on a regular basis. HAR has used the results to help define their rental initiatives, refine their political advocacy efforts, confirm consumer interest in a variety of consumer-facing technologies they offer to their members and even measure the equity of the REALTOR® brand.
WAV Group is overseeing the project for HAR, outlining topics for consideration, fielding the research, and identifying gems of wisdom that are informing positive change for HAR members. Bob Hale says, “We have learned some really interesting things from Houston consumers. They have opened up our eyes to opportunities that we are now addressing through technology, training and communications.”
Participants in the HAR Consumer Research Panel have been recruited from consumers that registered on HAR.com to receive property updates. With a simple invitation, WAV Group assisted HAR in recruiting nearly 10% of consumers that are willing to answer surveys monthly. The amazing news – none of the consumers in the panel are being compensated in any way. They are simply contributing their ideas to improve the local real estate market in Houston.
What are the Unmet Needs of Consumers?
Consumers are very forthcoming about their unmet needs from their agent. While 80% of respondents are at least somewhat satisfied with their agent, they have LOTS of suggestions about how the industry can more effectively meet their needs.
Lack of Responsiveness
What is their #1 unmet need for Houston consumers? Responsiveness. While they believe that real estate agents are just about as professional and competent as other service providers like insurance agents, accountants and attorneys, they believe that agents could be a lot more responsive to their needs. They don’t understand why agents don’t answer their phone or call them back when they inquire about a listing. They say things like “Why don’t agents that have houses for sale call me back? Don’t they want to sell the property as quickly as possible?” The simple process of picking up the phone to return a call or text is the single best way agents can improve their chances of success in real estate.
Consumers are looking for transparency in the real estate transaction in a variety of ways. First, they are looking for ways to evaluate the performance of agents by reviewing feedback from their past clients. Since buying a home is THE single most event purchase for most families, consumers would like to be able to feel good about their choice in an agent. Many agents in Houston have embraced this idea and are participating in HAR’s Client Experience Rating program. This initiative, also one of the first of its kind, helps consumers confirm that the agent they have identified has a proven track record. 90% of consumers who used the Client Experience Rating found it valuable.
Second, consumers are very interested in the ability to track the status of their transaction online as well. According to one of the studies fielded through the panel, 2/3 of consumers are interested in viewing the progress of their transaction online. HAR offers a great program called SureClose that allows an agent to provide this valuable service to their clients. The service is included in the HAR dues.
Embracing the Rental/Ownership Lifecycle
A separate study that the panel conducted by revealed another interesting trend. While Houston remains one of the most affordable markets in the country, there are still a growing number of consumers interested in renting. Interestingly, more than 40% of those consumers that are renting are most interested in renting individual homes.
As an industry, we have historically thought of renters as one type of consumer and homebuyers as a distinct and separate group. The truth is today they can be one in the same. We need to embrace the rental/homeownership life cycle. Some consumers may not be able to purchase a home because they have been part of a foreclosure. Still others may be interested in renting a vacation home, while owning their main family home. Some people may be downsizing to a condo and at the same time, helping their children buy their first home. If we ignore the needs of renters simply because the commission is not high enough, we may be weakening our chances of creating a client for life.
HAR recognized the needs of renters so HAR.com now includes a much more robust method for consumers to search for rentals. There is a great opportunity for every HAR member to feature his or her own rentals on HAR.com, the most highly trafficked property search site in the Houston area.
How Can You Be More Focused on the Needs of Your Consumers?
Do Your Own Research
Every agent and broker has an opportunity to become more focused on the consumer. Think about ways you can engage your customers and visitors to your website. You can do simple things like invite a few of them to lunch and ask them how you’re doing. You can ask them a few simple questions to get a gauge on how well you’re serving their needs:
- How comfortable and prepared do you feel about buying a home after working with us?
- How strong is our customer service?
- How responsive are we?
- How knowledgeable is your agent about the local market? Mortgage Trends? Title Insurance?
And the most important question of all….
- Would you recommend your agent?
Some brokers around the country are now taking on the idea of creating a consumer research panel as well. They are using their panel to refine the elements of their website, test consumer-facing technologies and measure the performance of their agents. Importantly, these panels are doing double-duty for these progressive brokers. Not only are brokers using their research panel to identify better ways to serve their clients. They are also using the mere fact they have a consumer research panel as a recruiting tool making it a win/win.
Take advantage of the consumer tools offered by your broker and HAR
Serving the needs of the consumer more effectively doesn’t have to be expensive. First, you simply need to adjust your focus, reminding yourself every day that without your clients, you don’t have a business. Their needs simply HAVE to come first. Second, take a look at all of the tools available from your broker and from the Houston Association of REALTORS®. Embrace those offerings. They are intended to help you create stronger, lasting relationships with your clients. Take the time to learn how to use them effectively. You can see all of the technologies HAR offers you to help better serve the needs of consumers with a broad array of member tools
It’s time to start listening and responding more intently to what consumers need. They are the key to your long-term success. If you have any questions about how to better serve the needs of your real estate consumers, feel free to contact me at Marilyn@wavgroup.com. You may also register to receive a free monthly newsletter from WAV Group.
Marilyn Wilson is one of the founding partners of WAV Group, a leading research and consulting firm in the real estate industry. She is also the co-founder of RE Technology.com, the leading real estate technology educational resource available today.