Before we launch into this segment, let’s recap the last installment. In it I was discussing how in the 1960s and 70s, our industry was in a Broker-centric Era. The brokers had all the power. Customers had very little access to listing inventory except through them. Agents had no business except through them. Modern real estate brokerage was in its infancy. By controlling the inventory, broker-owners were able to build real estate dynasties. It was common place to see multiple office operations with teams of agents, and it was during this climate that companies like Century 21, Coldwell Banker, ERA, and other similar broker-centric companies became huge empires.
Then came the Agent-centric Era in the 1980s and 90s and the resulting shift of power to the agents. One of the catalysts was the personal computer. First the brokers lost control of the listing book, then their exclusive main frame computer connection to the local MLS. Agents were suddenly able to be independent with their own MLS access. And since the agents were the ones doing all the transactions, many began demanding a bigger slice of the commission pie. That led to new agent-centric companies springing up: companies like Re/Max and Keller Williams. Agents got their bigger slice of the pie, but with it, came a bigger slice of the overhead.
Around the turn of the century, another remarkable thing began to happen, again powered by technology. Just as the PC empowered agents, the Internet empowered customers. Armed with information and choices (and let’s not forget the most important thing — the money), the customer became the one with all the power. It was inevitable, and it was proper. Information is power. Today’s customer has more information at his fingertips than brokers and agents had just a few short years ago. That shift of power has caused an erosion in overall brokerage fees of roughly 15% over the last decade. Nowadays, the agent must add value and not simply control access to the MLS and the lockbox.
Ok, so that’s where we are now and how we got here. But that still doesn’t help today’s agents, many of whom are still in broker-centric or agent-centric companies wondering where all the customers went. So where did all the customers go? Allow me to explain it by telling you a fishing story.
Once upon a time there was a huge river, stocked full of home-buyer and home-seller fish. All along the banks of the river were REALTORS® with their fishing poles. Everyone was catching all he wanted, and life was good. Then one day, way upstream, a big commercial fishing company set up operations, with its computerized fish finders, its power nets, and the latest in online fishing technology. The company began to pull many of the home-buyer and home-seller fish out of the river before they could ever make it downstream to be caught by agents still persistently hanging onto their same old fishing spots.
Little did they know, the total number of fish making it downstream was getting smaller and smaller. It wasn’t long before the fishing began to get tough — so tough, in fact, that many REALTORS® just threw in the towel and quit fishing altogether. Others fished longer hours and did what they could to survive, while a third group simply gave up on fishing for themselves and began to buy fish from the big commercial fishing operations.
But what if an agent were able to get their hands on the same technology that those large commercial fishing operations were using? What if he were to go way, way upstream and begin to catch large quantities of home-buyer and home-seller fish? Not only would life be good again: it would be GREAT! What a huge advantage that agent would have! Well, believe it or not, this story is actually true.
The big commercial fishing operations in this story are lead vendors, like HouseValues, HomeGain, and ServiceMagic, and every day the “fishing” gets tougher because a new lead vendor opens its doors. If you don’t believe me, just check your email inbox. Not a day goes by that I don’t receive some new version of the same old thing — another company using our listings to advertise on the Internet, catch our customers, and then attempt to sell them back to us.
But there’s another part of the story that’s also true. It’s actually possible for an agent to use the same kind of technology that the lead vendors use to capture leads — commercial lead capture technology only designed for single-agent use. And for those agents who have it, the technology produces amazing results. It’s called lead capture technology, and those agents who use it have more business than they can handle. Many go on to build teams, and some companies. Those agents who are proactive are having their best days ever, and here’s why they are:
Today, instead of locking down the information and the access, and waiting for the customers to come to us, the successful agent must go get the customer. Nearly all customer gathering methods used by agents in the broker-centric and agent-centric eras of real estate were what we call “pull marketing”. Today’s customer-centric agent must use “push marketing” to be successful at attracting business.
Pull marketing includes strategies and ideas that are passive in nature. Think branding. Among pull strategies are geographic farming, sphere of influence marketing (also know as networking, circle of influence or circle of 50 marketing), open houses, model homes, yard signs, home magazines, etc. Think “If you build it they will come.” In all of these methods, the agent spends time, energy, and money building his or her name or brand and then waiting for the customer to call.
The problem with using pull strategies today is that customers will only call you after they’ve entered Phase Two of the buying cycle (For more about the real estate buying cycle, read my article: Working Internet Leads.), and most of the successful online strategies capture Phase One customers. By the time most of today’s customers get to Phase Two, it’s too late. They’re already working with an agent — an agent doing real estate the new way!
On the other hand, push marketing involves ideas that are active in nature. Think “pursuit” marketing. Pursuit marketing involves identifying a lead, and then the resulting proactive measures that will move it from a lead to a customer. Push marketing doesn’t wait for the customer to come to us. It goes right to the customer. And it typically goes way upstream, as much as 6-8 weeks before that customer ever responds to a pull campaign. And unless that first agent has done a poor job, one of the downstream old-school agents will never get the call. Instead of “build it and they will come”, today’s push marketing is more like, “build it and then go get them”. Sounds like more work, doesn’t it? It’s really not. It’s just a different way of doing real estate — a new way!
In the next segment, I will begin to describe the way today’s customer-centric agents practice real estate this “new way”. Many of you will be surprised at how different it is, and yet how easy. Until next time…