Industry Visionary

From a technology perspective there are a number of really interesting and exciting things occurring in our industry today.  I see a whole new level of technology, beyond what we have known as basic MLS and broker services, that is successfully establishing itself in our industry.  Internet tools have matured and base listing systems are robust and stable.  The tools available today provide a number of possibilities that really weren’t practical with earlier technologies including MLSs building their own systems, plugging components into existing systems and brokers bringing major portions of MLS like technology in-house.  

At the MLS level some of these changes came about as a matter of control and not wanting to be dependent on vendors for their technology needs.  While I don’t see this full in-house approach working well for any but the largest MLSs we are seeing “component”  solutions being used more and more often in many areas .  MLSs are getting different portions of their technology solutions from “best of breed” providers, whether it is mapping, public records, forms or transaction management technology.   With increased product specialization and the continued maturing of data standards I believe this trend will continue to grow.

At the broker level what we see driving technology adoption is pure economics and common sense.  As real estate firms continue to consolidate and expand across multiple market areas they are forced to integrate with multiple MLS and data platforms to use their own data and this creates both technical challenges and significant expense.  Many are finding ways to bring some of the services previously provided by the MLS in-house using the MLS more and more as just a data warehouse.  We see firms whose agents never even look at the local MLS system when they come to work.  Their searches, their CMAs, their document management is all done on the broker system which gives the company more control, efficiency and reduced expenses while allowing them to control brand more efficiently.  The result of these real “pain” areas for the real estate companies are the emergence of exciting technologies that are focused on providing better data and internal process control.

The corporate players that I see making the most significant impact over the last few years are the lead generation companies, like LendingTree, HomeGain, and HouseValues. They did such a great job of recognizing the opportunity created by the changing dynamics of buyers and sellers and they understood how to use the Internet to harvest and monetize these leads.  While they have proven the concept that leads can be captured through the Internet, conversion rates, according to our research have been low.  The real break through we are beginning to see in Internet lead generation, goes beyond lead capture, to qualification and conversion.  Companies like Most Home and Wolfnet Technologies are offering tools and services to help Brokerages mature and harvest these leads which we believe is the critical next step. 

There are many trendsetters that I admire in our industry but since my focus in this interview has been on technology a few come to mind that I believe are on the cutting edge of some new technology in real estate.  Ben Clarke, CEO of IDC Global and his crew, are delivering some very cool technologies to real estate firms and now MLSs, across the country.  Data integration is IDC’s specialty and they recognized early on that cookie cutter approaches will not work with major Brokerages.  Their custom Broker systems operate online or offline managing and connecting all of the different pieces of the puzzle for Brokers from websites to listing and tax to contacts and transaction data.   They also provide integrated forms software that can pull data from anywhere on their system.   We came across them when researching multi-lingual solutions for a European client and have been very impressed with their solutions.

Two other trendsetters that I admire are Ken Galpin and Jim Secord, CEO and President of Most Homes.  They are doing very exciting things in the lead generation and lead qualifying space.  While they offer tools for lead qualification that Brokers can use themselves they will also manage the entire process for the brokerage filtering and qualifying any and all leads the company wants to run through their system.  They have very impressive tools to manage the lead process and use licensed real estate agents in their lead management center.  Their conversion rates are very impressive.

I believe the emerging real estate consumer wants you to give them the information they want, when they want it, and they want the process to be easy!  They also want the early stage of any process to be at arms length.  They expect and want to do more of the initial sorting and don’t want to be sold or pressured.  Value sells. Service sells.  Providing good data and good tools to help them move the process along, on their own, sells.  Give them that in the way they want it and there is a good chance they will use your service when it is time to make the actual deal.

First, at the MLS level the most important thing is to make sure the basic technology tools brokers and agents need to be able to provide this level of service are available.  Most of the MLS and in-house systems are doing a good job of delivering tools that make this easy such as, “auto email”  and “consumer websites” where properties matching requirements, and custom CMAs, are displayed for their eyes only. 

At the Brokerage level there is a bigger shift required to make sure they adapt to new consumer behaviors and to ensure they are not losing opportunities.  It is a shift from the traditional “get in the car and look at properties” approach to one utilizing more technology and enhanced communication tools at each stage of the process.  Developing these tools and processes requires an overall Internet strategy that should be part of any strategic planning process.   Consumer strategies today need to be multi-pronged and look at areas including website design, website search optimization, promotion and marketing, lead cultivation and lead management.

To be successful you need to grow market share and revenue and to manage costs.  To achieve profitability today requires more than just traditional marketing techniques.  As noted above, I believe it requires a well planned and well executed strategy for both identifying and qualifying the emerging real estate consumer.  The last thing brokers should want is to have agents sifting through hundreds of leads to find one or two that are qualified.  Brokers should be looking to implement tools and processes, either internal or 3rd party, to get agents out of every process but working with real buyers and sellers.  What that means is Brokers need to invest in technology and tools that optimize and streamline processes, such as transaction management and lead management, things that can rob agents of time and profitability.  Properly applied these tools can reduce operational expenses as well as creating more effective risk management.  In addition, the right technology can also give Brokers the ability to capture ancillary revenue from their client base, whether mortgage, title and other services they may offer. 

We take them for granted in many cases but first and foremost the MLS needs to provide great MLS technology tools for their members.  Today, that doesn’t mean just simple MLS search and print but also needs to encompass things like increased data security and data management.  Brokers spend significant amounts of money just getting listing data back for IDX searches, back-office systems and so on.  Providing good and cost effective data management solutions for Brokers can have a real impact on their profitability.  To be most effective, this approach needs to move beyond the boundaries of a single MLS just as Brokerages have.  Agreements, processes and systems need to be put in place where Brokers across larger regions can get their data from a single source in a single format.

One area that my partners and I have become very passionate about since forming WAV Group is research.  The more we get involved with research on behalf of customers, or on our own, the more areas of our industry we see need to be explored with clear and objective process research.  We have often found that technologies over time can take on a life of their own and develop in ways that don’t necessarily solve a real or urgent problem for users.  The result is low adoption or unhappy users.

As an example, we are personally very much in favor of transaction management and see it as a natural improvement to the real estate process.  But, like most of us we recognize adoption has been very low and even when implemented the results have not been very successful in many cases.  We wanted to understand what the real obstacles to adoption are.  So WAV Group developed and fielded a national study on transaction management, in conjunction but at no cost to the 15 MLSs who participated, where we received feedback from almost 5,000 brokers, agents and MLS executives.  The results of our study will be published later this week.  We see ongoing research of this sort to be a key value that we will continue to bring to the industry.

A book I read recently that I think has great application in our industry is called “Crossing the Chasm”, by Geoffrey A. Moore, which deals with taking high tech disruptive products to mainstream customers.  

A book that was very influential during my years working with MLS vendors that I think is still valuable for anyone that has to work with boards and/or committees to reach consensus, is Strategic Selling by Robert B. Miller and Stephen E. Heiman.  The book is really about understanding the group dynamic and how to work within that structure. 

On the lighter side, if you’ve never tried fantasy and want to try something new I recommend the Amber Series by Roger Zelazny. 

First, I would recommend that if they don’t do it already, they should develop a comprehensive Internet strategy as part of their overall business plan.  The stakes are simply too high, and the investment too significant, to do this by shooting from the hip.

I would also suggest a process we use at WAV Group. Whenever we are looking at a new project or endeavor with a client, or on our own, we ask a couple of key questions:

1. What is the key problem we are attempting to solve? 
2. What is the specific and urgent pain point that needs to be addressed?
3. What is the overwhelming key “benefit” that should occur if we are successful?

By doing this it takes you outside of existing processes and helps you look at the underlying result you are trying to achieve.  I think it should be the same for any business or organization looking to improve.  You have to understand the problem or pain to begin with.  Sometimes when you go through this process you realize there really isn’t a substantial pain point, which is wonderful, because you just saved yourself the expense of an unneeded process or product implementation.  Other times, by identifying the real issue or pain, you are assured that if you provide a solution (cure) to that pain, it will be used (adopted).

Email Mike