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If it walks and talks like a brokerage, it might be Zillow

Zillow is one of the largest real estate media companies in America, and they have recently made bold expansion plans many are praising, but one industry leader tells AGBeat that these moves are competitive, not praiseworthy.

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Zillow’s expansion plans: compete with brokers?

Real estate media company, Zillow has recently made several big moves, some are being called game changers as they add value to their offering with the goal of better serving real estate practitioners and consumers. Not everyone sees it that way, however, including VHT Chairman, Brian Balduf, who is no stranger to controversy, recently taking on black hat SEO tactics of real estate media sites.

Balduf sees Zillow’s expansion plans as anti-broker and in a statement to be released later today, Balduf outlines why. The statement is featured in full below.

“If it walks and talks like a brokerage, it might be Zillow,” by Brian Balduf, VHT Chairman:

Zillow’s new Agent Hub tool

When Zillow rolled out a new CRM tool for real estate agents on Friday, it hit a nerve with brokers who are already offended by big aggregators’ controversial tactics to get in between them and their customers.  Now it looks like Zillow is also trying to get in between them and their agents.

Zillow describes Agent Hub as a key step in moving Zillow beyond advertising with a suite of tools and services giving agents a central hub for marketing and managing their businesses and becoming more productive.

Agent Hub is said to provide agents with analytics dashboards to monitor listing and agent profile metrics, as well as marketing and social media training and industry news updates.

All this prompted industry observers such as Geekwire to suggest that Zillow’s agent strategy is targeted at competing with Market Leader and other industry outsiders that are aggressively pursuing the billions spent annually by real estate professionals on marketing and advertising.

Brokerages are in Zillow’s crosshairs

But there’s more going on here than competition between two companies in the same space. In this battle, it’s real estate brokerages who are in the crosshairs of Zillow’s ongoing expansion plan.

Understanding why that’s the case requires understanding how the Internet has changed consumer buying habits. Once upon a time, agents were the source of clients for brokerages. But now, consumers have direct access to MLS listings and they’re spending weeks or months shopping for homes on the web without help from agents.

Today, agents have to pay Zillow and other third parties to help them find these online buyers. And these savvy third parties are investing big bucks in developing a range of CRM, lead management and other support services that are easy for agents to access and free or low-cost to use. (Zillow’s plan, the company disclosed this week, also includes opening a new California office and adding 100 employees to its sales force to promote the Agent Hub offering.)

An interesting comparison

Here’s an interesting comparison.  If you look at some advertising by brokers trying to attract agents, and at what these industry outsiders like Market Leader are marketing to agents, you’ll see some interesting similarities:  

The broker’s message in the above ad — about providing the “best tools, training, support and lead generation” to agents — has been borrowed by third party companies like Market Leader. Its brochure ware says it offers agents “integrated websites, contact management, a marketing center, and lead generation services that generate a steady stream of prospects plus provides the systems and training for converting those prospects into clients.”

The only difference in the services is that these third party players aren’t restricted by all the rules and regulations that a brokerage must adhere to.

Zillow undermines brokers’ value to agents

With Agent Hub, Zillow is helping to undermine brokers’ value to agents and eclipsing their role by providing services directly to agents – services that traditionally have been provided by brokers. Like Market Leader, they’re taking money out of brokers’ pockets, undermining agents’ loyalty to brokers, and basically competing for the low hanging fruit – agent marketing dollars.

No wonder agents are questioning the role of traditional brokers and demanding a larger share of commissions.  If the trend continues, will agents need brokers at all?

Brokers CAN actually strengthen their relationship with agents and increase their value proposition. But they need to spend less time trying to recruit more agents and more time using their resources to get leads for the agents they have. They should be helping agents nurture buyers through the sales process so they can close more sales.

This battle is all about trying to help agents generate leads and close deals more effectively. Whoever does it the best, wins, period.

AGBeat is not affiliated with VHT and the above comments expressed do not necessarily reflect the opinions and position of AGBeat officers and employees.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

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47 Comments

47 Comments

  1. Ken Brand

    April 18, 2012 at 3:44 pm

    “This battle is all about trying to help agents generate leads and close deals more effectively. Whoever does it the best, wins, period.” Absolutely spot on. The odd thing, at least for now, in this simmering competition stew, brokers are providing their ZTR competitor with gunpowder (property data) which is used to sell ads to the brokers agents, which generates money, which ZTR use to manufacture more tools (bullets) to shoo the gunpowder-providers (brokers) in the head. Awareness on all fronts is rising and will rise as the market rebounds and (hopefully) smart brokers move from a survival-mode-mindset to a kick-ass-and-take-names-mindset.

    “But they need to spend less time trying to recruit more agents and more time using their resources to get leads for the agents they have.” I believe to thrive you must do both impressively. Half-assing on lead gen, developing new talent, quality control and attracting new talent will have a broker chasing and lagging instead of leading and reaping.

    I don’t believe a middle ground is possible due to TRZ’s shareholder/investor demands and expectations, growth can only come from disintermidiating brokers. What I’m encouraged by is the fact that (for now anyway – wake up brokers TRZ is a Trojan Horse) brokers can (if they have the will) pull the life support plug on TRZ. In will be interesting to see how brokers react in a surging rebound market.

    Thanks for sharing.

  2. Benn Rosales

    April 18, 2012 at 4:02 pm

    The entire old guard needs to be pushed – if you’d told me 3 yrs ago top producer would be html5 I’d have called you insane and asked you to step away from the crack.

    IMO this is more threatening to old vendors and new vendors with old tricks – read that again.

    This is a snap in the face to NAR – wake up, we’re taking the reigns as the leader in the real estate industry, and Trulia just solidified my belief last week.

    The fact is, Zillow is a threat to everything that was once normal in real estate, and there isn’t a damn thing wrong with that. The arrogance of the old mans club is coming to a head – mark my words.

    • Bruce Lemieux

      April 19, 2012 at 4:00 pm

      Benn – Definitely agree that other RE service providers like Move, etc should worry about Zillow, but how is “Zillow is a threat to everything that was once normal in real estate”? It seems to me that Zillow does two things: sells web ads from listing data, and provides web services to agents. This may bring about some industry consolidation in these markets, but I don’t see how this affects much else. This doesn’t seem that revolutionary/disruptive to me. What am I missing?

      What would be very interesting – and cause quite a stir – would be if Zillow setups up brokerages ala Sawbuck — ‘brokerages’ that have access to MLS data and build an agent referral business. This would be a lot more disruptive to traditional brokerages than anything else they’ve done recently.

      • Benn Rosales

        April 19, 2012 at 5:34 pm

        Bruce, got your question, and I’m going to see if I can help paint a better illustration of what I mean than stuffing it into a comment. I don’t think Z will be sticking signs in yards, I think it’s a lot more macro than that and not speculative, but what’s actually happening in real time.

        • Bruce Lemieux

          April 19, 2012 at 6:22 pm

          “I think it’s a lot more macro than that and not speculative” – I have no idea what that means.

  3. Rich Jacobson

    April 18, 2012 at 4:31 pm

    Spot on, Benn! Things are desperately in need of a shake up. Local brokerages (and parent companies) have failed to provide meaningful lead gen systems for their agents. Zillow and Trulia are simply fulfilling the need/demands that Realtor.com has failed to provide.

  4. Robert Drummer

    April 18, 2012 at 10:50 pm

    If *any* agent puts their client information in Zillow’s AgentHub, they are an absolute idiot.

    Zillow’s ‘Terms of Use’ let them do anything they want with your client list including sell it to any third party.

    I blogged about here:
    imapp.com/blog/2012/04/zillows-dirty-little-secret/

    • Jay Thompson

      April 19, 2012 at 12:40 pm

      Jay T. from Zillow here!

      Thanks for pointing this out Robert. The TOU you cited in your posy was never intended to include info agents and brokers upload to the CRM / Agent Hub. Zillow will not harvest anything from the contacts that agents input into the CRM, and the language of the TOU is being been updated to explicitly state this.

      • David G

        April 23, 2012 at 8:54 am

        Thanks for the clarification Jay T. 😉

  5. Thomas Johnson

    April 19, 2012 at 2:06 am

    Tsk tsk. What would David Gibbons do?

    • David G

      April 23, 2012 at 8:55 am

      He’d probably do exactly what Jay T would do. Good to see you Thomas.

  6. Paula Henry

    April 19, 2012 at 6:10 am

    Agents and brokers woke up too late.

  7. Bruce Lemieux

    April 19, 2012 at 3:43 pm

    All this hand-wringing over Zillow is so tiring.

    So Zillow is providing services to agents just like Market Leader and Move. So what? Agents aren’t forced to use any of this. If Zillow provides compelling products with good value to agents, how is this a bad thing?

    And this incessant worry that Zillow will become a brokerage — ugh, enough already. If Zillow’s evil master plan is to setup brokerages, then let them. Running a profitable brokerage is hard work. If it were simply a matter of turning on a website, Redfin would have taken over the entire industry years ago. And if they do setup brokerages, do it better than everyone else and make tons of money, then good for them. Seriously – what *is* the problem?

    There’s a lot of zillow/trulia/redfin/r.com haters on the REnet who would be better off focusing on how to provide more value to their buyers and sellers – and less time griping about everyone else.

    • Benn Rosales

      April 19, 2012 at 5:37 pm

      I’m not a hater, like I said, competition in the market place especially for associations and vendors is a great great thing.

      • Bruce Lemieux

        April 19, 2012 at 6:16 pm

        Benn – sorry, didn’t mean to infer that you were in the ‘hater camp’. If I understood the original article correctly, you reported on Mr. Balduf’s thoughts on Zillow, not your own. I think we both agree that a more competitive RE service marketplace is all good.

        • ken Brand

          April 20, 2012 at 10:16 am

          I’m not wringing my hands Bruce, I’m speaking up, speaking out, wagging a finger, shaking a fist.

          Fortunately I’m capable of expressing my self and focusing on my business at the same time. A part of business is keeping abreast of competitive forces, listening to opposing views and formulating a positon current issues. Expressing myself in writing is helps to crystalize my beliefs.

          What I’m not doing it sitting quietly in a corner, deaf, dumb and mute. If I did that I wouldn’t be “doer”, I’d be a dud. imo

      • David G

        April 23, 2012 at 8:59 am

        Was Zillow contacted for comment on this story?

    • Drew Meyers

      April 20, 2012 at 7:02 am

      “There’s a lot of zillow/trulia/redfin/r.com haters on the REnet who would be better off focusing on how to provide more value to their buyers and sellers – and less time griping about everyone else.”

      Spot on. Unfortunately, this world is full of “blamers” aka those who will bitch and moan about what everyone else is doing that is so “unfair” but refuse to actually do anything themselves to improve their business. I’ll stick to hanging with the doers of the world..

    • Robert Drummer

      April 20, 2012 at 9:54 am

      It seems there are just as many zillow/trulia/redfin/r.com apologists on the REnet who also would be better off focusing on how to provide more value to their buyers and sellers – and less time griping about everyone else.

      • ken Brand

        April 20, 2012 at 10:01 am

        This is what makes the internet great. It allows us to bitch and moan, even when we want bitch and moan about the bitch and moaners. We can hate on the haters, we can point how unfair and misguided the unfair and misguided are.

        Thankfully because most of us who read and share on AG can walk and chew gum, we can laser focus on growing our business, be a doer and still find time to add to the conversation, even when the haters, moaners, bitchers, unfocused and undoers disagree.

        • ken Brand

          April 20, 2012 at 10:03 am

          PS. I think Redfin is an awesome brokerage. ZTR, not so much, they aren’t a brokerage yet.

      • Bruce Lemieux

        April 20, 2012 at 10:11 am

        @Robert – So we have the Hater Camp and Apologist Camp. How about the Agnostic Camp? Either way – I agree with your point.

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Opinion Editorials

Can we combat grind culture and injustice with a nap?

(OPINION EDITORIALS) A global pandemic and a climate of racial injustice may require fresh thinking and a new approach from what grind culture has taught us.

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Sleeping cat with plant, fighting grind culture.

Information is delivered to us at warp speed with access to television, radio, and the internet (and more specifically, social media). We are inundated with messages. Oftentimes they’re personalized by something that a friend or family shared. Other times we manage them for work, school, or just keeping up with news. Many entrepreneurs already wear many hats and burn the midnight oil.

During this global pandemic, COVID-19, we have also seen a rise in awareness and attention to social injustice and systemic racism. This is not a new concept, as we all know. But it did feel like the attention was advanced exponentially by the murder of George Floyd on Memorial Day 2020. Many people and entrepreneurs felt called to action (or at least experienced self-reflection). And yet they were working at all hours to evolve their businesses to survive. All of this happening simultaneously may have felt like a struggle while they tried to figure out exactly they can do.

There are some incredible thought leaders – and with limited time, it can be as simple as checking them out on Instagram. These public figures give ideas around what to be aware of and how to make sure you are leveling up your awareness.

Dr. Ibram X. Kendi, Director of the Center for Antiracist Research – he has been studying anti-racism and has several books and interviews that help give language to what has been happening in our country for centuries. His content also delves into why and how white people have believed they are more than people of color. Here is a great interview he did with Brené Brown on her Unlocking Us podcast.

Tamika Mallory – American activist and one of the leading organizers of the 2017 Women’s March. She has been fighting for justice to be brought upon the officers that killed Breonna Taylor on March 13. These are among other efforts around the country to push back on gun control, feminist issues, and the Black Lives Matter movement.

Brené Brown – research professor at the University of Houston and has spent the last two decades studying courage, vulnerability, shame, and empathy. She has been listening and engaging on how racism and our shame intersect. She also speaks about how people can reflect on themselves and where they can take action to better our society. She has some antiracism resources on her website.

With all of this information and the change in our daily routines and work habits (or business adjustments), what is a fresh approach or possibly a new angle that you haven’t been able to consider?

There is one social channel against grind culture that may not be as well-known. At an initial glance, you may even perceive this place as a spoof Twitter and Instagram that is just telling you to take a nap. But hold on, it’s actually much smarter than that. The description says “We examine the liberating power of naps. We believe rest is a form of resistance and reparations. We install Nap Experiences. Founding in 2016.”

It might be a great time for you to check out The Nap Ministry, inspired by Tricia Hersey. White people are called to action, and people of color are expressly told to give time to taking care of themselves. Ultimately, it goes both ways – everyone needs the time to recharge and recuperate. But people of color especially are being told to value their rest more than the grind culture. Yes, you’re being told you need to manage your mental health and include self-care in your schedule.

Through The Nap Ministry, Tricia “examines rest as a form of resistance by curating safe spaces for the community to rest via Collective Napping Experiences, immersive workshops, and performance art installations.”

“In this incredibly rich offering, we speak with Tricia on the myths of grind culture, rest as resistance, and reclaiming our imaginative power through sleep. Capitalism and white supremacy have tricked us into believing that our self-worth is tied to our productivity. Tricia shares with us the revolutionary power of rest.” They have even explored embracing sleep as a political act.

Let this allow you to take a deep breath and sigh – it is a must that you take care of yourself to take care of your business as well as your customers and your community. And yes, keep your drive and desire to “get to work”. But not at your expense for the old grind culture narrative.

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Opinion Editorials

The actual reasons people choose to work at startups

(EDITORIAL) Startups have a lot going for them, environment, communication, visible growth. But why else would you work for one?

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Startups meeting led by Black woman.

Startups are perpetually viewed as the quintessential millennial paradise with all of the accompanying perks: Flexible hours, in-house table tennis, and long holidays. With this reputation so massively ingrained in the popular perception of startups, is it foolish to think that their employees actually care about the work that startup companies accomplish?

Well, yes and no.

The average startup has a few benefits that traditional business models can’t touch. These benefits often include things like open communication, a relaxed social hierarchy, and proximity to the startup’s mission. That last one is especially important: While larger businesses keep several degrees of separation between their employees and their end goals, startups put the stakes out in the open, allowing employees to find personal motivation to succeed.

When employees find themselves personally fulfilled by their work, that work reaps many of the benefits in the employee’s dedication, which in turn helps the startup propagate. Many aspiring startup employees know this and are eager to “find themselves” through their work.

Nevertheless, the allure of your average startup doesn’t always come from the opportunity to work on “something that matters.”

Tiffany Philippou touches on this concept by pointing out that “People come to work for you because they need money to live… [s]tartups actually offer pretty decent salaries these days.”

It’s true that many employees in their early to late twenties will likely take any available job, so assuming that your startup’s 25-and-under employee base is as committed to finding new uses for plastic as you are may be a bit naïve—indeed, this is a notion that holds true for any business, regardless of size or persuasion.

However, startup experience can color a young employee’s perception of their own self-worth. This allows them to pursue more personally tailored employment opportunities down the road—and that’s not a bad legacy to have.

Additionally, startups often offer—and even encourage—a level of personal connection and interactivity that employees simply won’t find in larger, more established workplaces. That isn’t symptomatic of startups being too laid-back or operating under loosely defined parameters. Instead, it’s a clue that work environments that facilitate personalities rather than rote productivity may stand to get more out of their employees.

Finally, your average startup has a limited number of spots, each of which has a clearly defined role and a possibility for massive growth. An employee of a startup doesn’t typically have to question their purpose in the company—it’s laid out for them; who are we to question their dedication to fulfilling it?

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Opinion Editorials

How Peloton has developed a cult-following

(OPINION EDITORIALS) How has Peloton gotten so popular? Turns out there are some clear takeaways from the bike company’s wildly successful model.

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Man riding Peloton bike with instructor pointing encouragingly during workout.

Peloton is certainly not the first company to gain a cult-like following–in the past we’ve talked about other brands with similar levels of devotion, like Crossfit and Yeti. Now, full disclosure: I’m not an exercise buff, so while I’d vaguely heard of Peloton–a company that sells stationary bikes–I had no idea it was such a big deal.

I mean, it’s not really surprising that an at-home bike that offers the option for cycling classes has grown so much during the pandemic era (a sales growth of 172% to be exact). But Peloton has been highly popular within its fanbase for years now. So, what gives? A few factors, actually.

Vertical Integration

If your company really wants to guarantee the vision and quality you’re aiming for, one of the best ways to enact it is through vertical integration, where a company owns or controls more than one part of its supply chain. Take Netflix, for example, which not only distributes media, but creates original media. Vertical integration lets companies bypass areas that are otherwise left to chance with third-party suppliers.

Peloton uses vertical integration–everything from the bike to its Wi-Fi connected tablet to the classes taught are created by Peloton. Although this may have made the bike more expensive than other at-home exercise bikes, it has also allowed Peloton to create higher quality products. And it’s worked. Many people who start on a Peloton bike comment on how the machine itself is well-built.

Takeaway: Are there any parts of your business process that you can improve in-house, rather than outsourcing?

Going Live

But with people also shelling out $40 a month for access to the training regimen Peloton provides, there’s more going on than simply high-quality craftsmanship.

Hey, plenty of cults have charismatic leaders, and Peloton is no exception. Okay, joking about the cult leader part, but really, people love their trainers. Just listen to this blogger chat about some of her favorites; people are connecting with this very human element of training. So much so that many people face blowback when suggesting they might like training without the trainers!

The trainers are only part of this puzzle though–attending live classes is a large draw. Well, as live as something can be when streamed into your house. Still, with classmate usernames and stats available while you ride, and teachers able to respond in real time to your “class,” this can simulate an in-person class without the struggle of a commute.

Takeaway: People want to see the human side of a business! Are there any ways your company could go live and provide that connection?

Getting Competitive

Pandemic aside, you can get a decent bike and workout class at an actual gym. But the folks at Peloton have one other major trick up their sleeve: Competition. Whether you’re attending a live session or catching up on a pre-recorded ride, you’re constantly competing against each other and your own records.

These leaderboards provide a constant stream of goals while you’re working out. Small accomplishments like these can help boost your dopamine, which can be the burst of good feeling you need while your legs are burning mid-workout. With this in mind, it’s no wonder why Peloton fans might be into it.

Takeaway: Is there a way to cater to your audience’s competitive side?

Conclusion

At the end of the day, of course, Peloton also has the advantage of taking a unique idea (live-streamed cycle classes built into your at-home bike) and doing it first. Plus, they just happened to be poised to succeed during a quarantine. But that doesn’t mean you can’t learn from what Peloton is doing right to build your own community of fanatics. There are plenty of people out there just waiting to get excited about a brand like yours!

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