As I sat on the main stage Friday at REtechSouth in Atlanta, one of the show organizers, Brad Nix, asked me what I thought about some of the statistics in NAR’s 2008 Profile of Home Buyers and Sellers Survey. What he was referring to specifically was the fact that 85% of the consumers surveyed said they would definitely or probably use the same real estate agent they transacted with again. On the surface one might think that is a good number, but when you pair it with the fact that only 26% of sellers and only 18% of buyers actually do, it is frightening. Could there be a bigger disconnect? And why?
Well, as it is turning out, this is just one of the problems our industry, in its current state, is faced with and one of the opportunities technology will help us solve. If we let it.
I remember sitting in front of a group of agents not so long ago who let me know that they would not allow their databases to be placed into a company controlled CRM platform for fear the company would “steal” their contacts. They felt they could do a better job at keeping in touch with their past, present and future clients and ensured me they would be successful in retaining their customers for life. After all, they were the ones who had built the relationship. There is a big difference between building a relationship and maintaining a relationship as it turns out. And most agents on their own are ill equipped to manage a large database of contacts effectively.
The result is a sad example of “what is” vs. “what could have been”. The other side of the coin is of course the other extreme of salaried agents who accept all of their business from a brokerage who spends a lot of advertising dollars capturing potential customers and keeping in touch with them using a sophisticated CRM solution. The agents are held highly accountable to successfully turn leads into firm sales, but the relationship piece is missing. Let’s face it, this industry as a whole, for the most part, has done a dismal job at adopting the whole “customer for life” program. We just haven’t figured it out. The numbers don’t lie.
So which of the two models will prevail in the months and years to come? I am going to suggest a hybrid. And I say this for several reasons. Let’s first acknowledge that we need significant change. The consumers driving our business for the next 30 years (the 70M “Echo Boomers”) are demanding it. The agents entering the business now are demanding it. But you can’t change an entire industry overnight. And you can’t discount the fact that in the same NAR survey, while 87% of the consumers surveyed used the Internet to search for a home, 85% used an agent to search for a home as well. That speaks to the fact that the relationship between the consumer and agent is equally as important as technology. And those percentages remain consistent in each age group. So both are here to stay.
Other industries have faced similar challenges and have been pulled kicking and screaming into the 21st century (the automotive industry comes to mind) only to find out that partnering with technology does make sense. They find it helps retain clients, which in turn makes the dealer (or the broker owner) and salespeople more money.
And so the race is on. As some companies and brands are spending time playing with what a storefront office should look like, others are working behind the scenes to develop an actual business model that will work.
The change won’t happen overnight, but the horse has certainly left the gate.