Much has been written about the 1992 campaign between George H. W. Bush and Bill Clinton. Bush, riding the crest of his Gulf War I success, felt sure the voters would overlook a few domestic economic issues.
Ouch, was he wrong! Worse yet, Clinton made sure voters got the real message by hammering home the catch phrase “It’s all about the economy.”
Today’s Real Estate Industry is undergoing a similar experience. Assuming today’s Real Estate consumer will credit them with all the successes of the past 50 years, much of the industry seems to be moving forward with a business philosophy that says “This is how we have always done it, and this is how you should accept it.”
But alas, in politics it’s the voters who make the final judgment in the polling booth, and it’s the consumer who makes it in the marketplace. And it appears the current Real Estate consumer has voted!
A recent consumer survey conducted by Murray Consulting and Harris Interactive resulted in a consumer profile that is totally consistent with similar research over the past two years by UCLA, Gomez.com, Texas A & M and Ketchum Global Research.
Bottom line: (1) Consumers are willing to pay a premium price for services they perceive as valuable, (2) Consumers do not perceive high value in much of what is being delivered by today’s Real Estate Agents, and (3) Agents seem both unwilling and unable to demonstrate value.
The Murray/Harris results further disclose that consumers are not suddenly abandoning the traditional Agent. Rather, they are slowly moving away from a service package that offers no perceived value.
According to the research, only 76% of recent buyers and only 59% of recent sellers used an Agent. Related to this finding, but not part of this research, is the fact that the Real Estate commission rate in the United States has now fallen to an average range of 4.9 to 5.2%, an all time low.
Certainly one inevitable lesson that must be drawn from this is that, “its all about value.” Building, delivering and promoting value must become Job One for today’s industry if we are to avoid even more commission and margin erosion.
That means success-oriented firms should be moving quickly to create a clear “value proposition” for their customers that is accountable, responsible, consistent, sustainable and measurable.
Here are some guidelines to consider in creating a company’s “stand” on values.
Develop and promote a Real Estate Consumer’s Bill of Rights. This will not only help win over contemporary consumers, but serve as a critical overview of value proposition itself.
Create a customer-oriented “entry portal” that distinguishes itself by actively seeking, listening, analyzing and responding to consumer input, especially regarding the specific services they initially request.
Create materials that clearly and concisely explain the entire process the consumer is about to experience.
The value proposition must address the entire range of services the consumer will be offered. It should make no assumptions about what services the consumer may actually want.
Each Agent who elects to participate in the program not only must study and be tested on their knowledge of the value proposition, but more importantly must agree to follow the letter and spirit of the program in every transaction.
The value proposition must be showcased throughout the firm’s marketing and advertising program.
The “value delivery system” must include an ombudsman function that continuously scans ongoing customer relationships to ensure the value proposition remains aligned with customer demands and expectations.
The value proposition must include statistical measurement tools and criteria, along with a process by which the program can be monitored, adjusted and validated.
Many would suggest that creating “value propositions” is primarily a challenge for today’s Agent. Indeed, they will have a critical role to play. But, regrettably, the “traditional” Agent is far too much a part of the problem for us to expect a meaningful recovery unless the Brokerage takes a strong initiative.
With a median age of 57 in the top producer ranks, these Agents are not in the age range normally associated with reinvention and renewal. That means that it will take a focused effort by the Brokerages to solve this problem in the limited time available before the consumer finally gives up on traditional “organized Real Estate”.
Will the “old timers” who constitute the bulk of many firms’ sales volume balk at this attempt to place controls on their performance and behavior? That’s almost a foregone conclusion.
And you can’t necessarily blame them. When they entered Real Estate years ago, one of the primary attractants was their Broker’s promise that they could be their own boss.
This struck a responsive chord with those rugged individualists who were looking for the freedom and independence to be a “business within a business.” Yet, the same personality traits that made them aggressive go-getters also made them chafe at any restrictions on their ability to have near-total control their business practices and their relationships with consumers.
Well, it’s time for the nation’s Brokers to make an introduction: “Mr. and Ms. Independent Contractor, meet Mr. and Mrs. Today’s Consumer.”
“Let me tell you a little about the Consumers. They don’t care about the Agent’s desire for independence. They don’t necessarily care about the number of Top Sales and Million Dollar Club plaques lining the walls of Agent cubicles.
“Because, you see, they’re finally figuring out that the Real Estate transaction is not about the Agent. It’s about them and the value they receive for their money. They want a consistent, high-quality experience that is centered on them and their needs, not around the Agent’s efforts to balance twenty transactions at once.”
But think about this as well. The true committed professional Agent should easily recognize the need for their firm to adopt and enforce a value proposition in today’s marketplace, and should be the first ones not only to buy into it – but also to help write it!
