Every difficult market, regardless of the challenges, generates losers, survivors and winners. Experienced industry veterans have learned that faced with the threat of a serious market slowdown, cutting costs and controlling expenses are essentials to survival.
Braking early is better than braking too late. But under adverse conditions, making great gains – winning – requires more than just braking. Being that big winner is a matter of recognizing the upside potential in a downside market and stepping on the gas not just the brake.
Recognizing the opportunity
How does one recognize the upside in the downside? The answer is linked to two other questions: Where is the opportunity? Where is the competition?
In the context of the current slowdown and existing market conditions, what then is the opportunity? For sure it must be consumer defined.
Here are five key consumer-defined opportunities in the current business environment:
- Better value
- More consistency
- Greater reliability
- Higher professional accountability
The problem is simple and clear. Today’s consumer seeks value through better (lower) pricing, through higher quality and through convenience. In the absence of a clearly defined difference in quality consumers are increasingly pursuing better value through more favorable pricing.
Convenience is an attractor but not the service solution – convenience brings consumers in – alone it does not sustain relationships. What brings the consumer back is the service experience and value through favorable pricing, superior quality/qualities (features) or an attractive combination of price and quality.
While the vast majority of consumers see little differences among real estate service companies, most consumers are willing to pay more for services (and products) when they are certain of superior quality. And in matters of greatest importance consumers actually have a bias toward higher priced goods and services. Today consumers see little difference in quality from one company to the next. The focus therefore is increasingly on price as a means of achieving value with a growing feeling that services are over priced.
The opportunity: Deliver better value by offering better pricing or delivering measurably superior service quality and satisfaction.
Not only is service delivery different from company to company within the industry, it is different from office to office within the same company, it’s different from agent to agent in the same office and it is frequently different from morning to afternoon with the same agent. Service standards and service delivery processes are virtually non-existent.
Traditional industry standards and processes are typically focused on prospecting (customer acquisition/capture), and sales activities i.e. the promise of service. Service delivery and all the details of service (promise keeping), well, that’s up to each independent contractor. The industry enjoys hiding behind the myth that standards cannot be imposed on independent contractors. The outcome for consumers is understandably confusing, and often frustrating, creating relatively low percentages of strong customer service loyalty.
The opportunity: Manage service delivery not just sales and production; adopt consumer-centric standards of service; implement service systems and service processes.
Consumer dissatisfaction is more frequently a reflection of an agent not applying existing skills and knowledge than it is related to an agent not knowing what to do or how to do something. Failure to keep a promise, to perform defined tasks, to prove to be undependable destroys trust and undermines the foundation of a professional relationship.
Possessing professional skills and resources is not enough. They must be effectively employed and applied.
The opportunity: Adopt and promote a culture that praises, recognizes, and awards the reliable application of skills, resources and knowledge – keeping the promise of service; offer ongoing skill development training relative to understanding and meeting customer/client needs; reliability and dependability are the foundation of trust and long-term relationships.
Higher professional accountability
Consumers frequently express frustration regarding their agent’s or broker’s accountability and responsibility to report activities and results. It has been said that Accountability is the scarlet letter of the industry – badge of shame because of its absence. Excellence and high levels of performance are not possible in any endeavor without accountability (being answerable).
A wise old woman once offered the following advice, “If you want teenagers to behave well at the party, keep the room bright.” That advice illustrates one of the most important principles of influencing behavioral change – “visibility of consequence.” The more highly visible one’s behavior becomes the greater the likelihood that it will be on a higher plane; more secretive, less visible environments do not tend to bring out the best in people.
While there tends to be high visibility of consequence in most organizations relative to sales and production the same cannot be said related to service delivery and customer satisfaction. High accountability is one of the benchmarks of a professional… some would say accountability defines professionalism.
The opportunity: Implement a system that offers service performance assessment and customer feedback (in real time) including an analysis of both the overall service satisfaction results and the details; create a functionality for comparative analysis at multiple operational levels i.e. agent, office, company to benchmark progress; reach for high visibility of consequence throughout the organization – customer satisfaction and service excellence is a team sport.
Responding to requests, taking action, answering in a timely manner, fixing things – making them right when they go wrong, timely communication of results… these are the expectations of today’s consumer. Despite the availability of communication and technology resources (cell phones, email, laptops, PDA’s, voice mail and the internet), each new study confirms a wide gap between consumer expectations and real estate industry’s typical response time.
While many industries suffer criticism for lack of responsiveness, communication inefficiencies, and growing insensitivity to customer needs, the real estate industry is far from taking a leadership role in creating new standards for professional service delivery.
The opportunity: Set standards for communication, consumer inquiries and client requests; employ available technology to more efficiently route calls and monitor results; create consequences and visibility for success and failure; implement a system for early intervention related to service complaints, problems or more serious issues and threats.
How to assess the competition
The opportunity (recognizing the upside in the downside) must also include assessing the competition and taking advantage here as well.
While there continues to be a fair amount of industry talk about the need for improving service quality, for increasing customer satisfaction and for delivering a better value proposition, in general it remains just that… mostly talk! Industry focus continues to remain steadfastly fixed on lead generation, customer acquisition, sales and production and selling more services.
5 fatal flaws to exploit
Where’s the competition? Here are five fatal competitive flaws to exploit:
- A focus on prospecting and sales/marketing/productivity
- Customer service and satisfaction remain solely the agent’s responsibility
- An absence of standards and measurements for service
- Failure to adopt systems and technology to manage service delivery
- The Manager’s job does not include managing service and the customer experience
Focusing on prospecting and sales
Companies continue to focus training, coaching and marketing resources on lead generation, customer acquisition and selling techniques i.e. teaching real estate professionals to become great promise makers. Keeping the promises of service – the actual delivery of service – remains up to each individual independent contractor to determine the how, when, where, if and what will be done – working it out on his or her own.
Taking advantage of the competition: When given the choice between a great promise maker and a great promise keeper, consumers prefer the latter. Training, coaching and marketing resources must offer systems, processes and disciplines related to great promise keeping not just great promise making. Ironically, the measurable results of great promise keeping (great service delivery) give real muscle and credibility to the promise of great service i.e. puts promise making on steroids.
Service is the agent’s job
Many companies continue to hide behind the notion that agents are independent contractors and cannot be held accountable for the details of service delivery. This is simply nonsense. Consumers have a relationship with and expectations of both the service professional and the company. Challenges, rewards, risks and future opportunities are intertwined. Meeting consumer needs grows increasingly complex requiring more specialized talents and resources. It is through partnership between company and professional that those needs are met. Service is no longer an individual event. It is a team sport.
Taking advantage of the competition: Service as a team sport demands mutual accountability for the real estate professional, the company and all support personnel. The mission of service excellence for the consumer needs to be communicated, understood and accepted as part of partnership mission. Success depends on the performance of many and mutual accountability is essential for success.
Service is not a key performance variable
Most companies measure sales, productivity, revenue, expenses, profitability, recruiting and retention – each is important. And if the business enterprise sees itself fundamentally as a sales organization then the measurement can stop there as it does with most real estate companies. If on the other hand, the business views itself as a service organization, then service must be defined, standards need to be developed with progress measured and assessed. Every human endeavor of importance includes measurement.
Taking advantage of the competition: Companies that are serious about their service measure their service results. In a service business, service is the product. Standards for delivery and assessment must be consume-centric (consumer centered and defined; sometimes in conflict with company and agent interests). Setting standards, measuring results and benchmarking performance for progress – many remain afraid…early adopters are already experiencing the advantage.
Service is an art not science… it can’t be managed
Quality service delivery is the new science. Most other industries are farther along in recognizing that quality service delivery is essential to business survival. Real estate companies continue to develop and invest in systems and technology related to accounting, transaction management, telecommunications, Internet strategies, websites, PC/PDA devices, and lead generation. Service delivery, the customer service experience and long-term customer relationships flounder.
Taking advantage of the competition: Systems and proven technology for managing service delivery exists. Measurable results can be achieved relatively quickly in terms of increased revenue and expense reduction. Customer retention, risk management (fewer threats, claims and suits), savings in E&O premiums, productivity improvements, higher e-lead conversions and increases in referrals and repeat customer sales are all being realized.
Managers have other priorities
Recruiting, developing and retaining agents, marketing activities, sales, productivity, revenue, (sometimes expense control and profitability) and with increasing frequency the sale of “other” services are commonly included as a branch manager’s responsibilities. Rarely does one find managing service delivery, the customer service experience and customer satisfaction included in such a job description. The system remains flawed.
Taking advantage of the competition: Branch Managers’ job descriptions must be expanded to include responsibility for managing the delivery and quality of the product (service). Anything less creates an accountability short circuit (how can the agents’ be held accountable) and sends a mixed message to the organization regarding the true importance of service.
What practitioners are doing to change
Thousands of of Broker/Owners and real estate professionals across North America have recognized the opportunity for change; here is what they are doing:
- Undertaking an ongoing formal program of service delivery training (promise keeping)
- Adopting consumer-centric measurements and standards of service
- Implementing systems, processes and disciplines for service delivery and quality control
- Utilizing written service commitments and service guarantees
- Holding managers and agents accountable for service quality
- Raising the organization’s visibility of service quality results
- Incorporating higher accountability and measurable standards in agent recruiting and selection
- Utilizing real time customer feedback and reporting technology
- Marketing independently validated customer service and satisfaction results to prospective clients, current clients, past clients and prospective agents
- Offering new levels of agent and office recognition based upon measurable service excellence results
Note from the Editor: The following information refers frequently to “Quality Service Certification,” or QSC, a company which the unpaid editorialist penning this post co-founded. The Real Daily has no financial relationship with QSC.
What are the results?
Real estate professionals (Quality Service Certified®) of companies that have implemented formal quality service delivery training, standards, systems, processes and the use of technology as outlined above are achieving remarkable measurable results.
Ongoing research of more than 500,000 consumers comparing service quality feedback and customer satisfaction results of between “traditional agents” to Quality Service Certified agents in the same companies, same offices, same markets, and during the same periods of time, reveal the following results (see graph):
- QSC professionals have 50% fewer less than satisfied buyers (51 per thousand versus 102 per thousand) than “traditional agents”
- QSC professionals have 64% fewer dissatisfied and very dissatisfied buyers (23 per thousand versus 64 per thousand for “traditional agents”)
- QSC professionals have 57% fewer less than satisfied sellers (67 per thousand versus 153 per thousand)
- QSC professionals have 55% fewer dissatisfied and very dissatisfied sellers (41 per thousand versus 90 per thousand for “traditional agents”)
- Clients of QSC professionals are 61% more “very likely” to do business with them in the future and send referrals than clients of “traditional agents”
The economic impact of an effective quality service strategy is clear, measurable and substantial. Service quality impacts every area of business. It also impacts relationships, reputation and results both long-term and short-term.
The upside to the downside
The downside of any market situation creates an upside for those who are willing to embrace change. Success is more than surviving… success demands more too. And while the risks and rewards associated with doing something are not always clear in the short run, the long term risks of doing the same thing or doing nothing are quite certain.
Brokerages rarely write an internal communication strategy, here’s why they should
(BUSINESS) Almost no real estate brokerages have an internal communication strategy, but they absolutely should.
It’s still early enough in the year that you can start fresh, personally and professionally. Help your organization by taking into account what’s happened in recent history and where you want to go. From there, you will determine what steps are necessary to achieve your goals.
Writing an internal communication (IC) strategy can be the first step in mapping your goals and is virtually unused in the real estate industry. According to All Things IC, an “internal communication strategy is like a map, an outline of your organization’s journey. It’s the big picture of what you want to achieve.” This can be done by a brokerage, or an independent agent alike.
Great! So, where do you start? First, know what an IC strategy needs to address. This includes the where, how, what, and why.
Write down the current state of the company, then state where you’re heading, or where you’d like to be. Create a list of objectives to support this.
Then break into your “how.” Explain how you are going to get to where you want to be, as well as how long it will take and why.
You’ll then venture over to a “what” by outlining what is involved along the way to your goal. Then, throw in a little “why” by explaining why this approach is the best for the job.
Go back to “how” and tell how you’ll know when you’ve reached your destination. This part will require tangibles, measurements to support a change in reaching your goal.
Finally, give one more “what” and address what will happen if you don’t change the way you’re currently operating. If things are working for your organization, that’s great! But, there is always room for improvement.
For an internal communication strategy, it is important to include the following: a title, an issue/purpose, structure, executive summary, audience segmentation/stakeholder mapping, a timeline, channels, measurement, communication objective, approval process and responsibilities, key messages, and an appendix.
Now, what was missing from the initial inclusions was a “who.” So, who should be the one to write this document?
Well, it needs to be someone with a strong understanding and implementation for internal communications. This can be done internally by someone on staff who is an expert; or, it can be outsourced to an expert. Regardless of who writes it, make sure it is clear and concise for the audience at hand.
What is most important to remember is that writing an internal communication strategy is just half the battle. Your work is not done once this document is agreed upon by the leadership team. And finally, you must be willing to enforce what’s written on these pages and be ready to make the changes you’ve outlined.
COVID-19: Huge list of resources to quickly help you and your clients
(NEWS) NAR has compiled a comprehensive list of resources for Realtors, homeowners, and insights on how the stimulus bill will impact the industry.
As the COVID-19 crisis continues to rattle the globe, many of us have far more questions than answers. Realtors are trying to figure out how to be socially responsible, stay healthy, and maintain their business.
The National Association of Realtors (NAR) has collected several resources to help you and your clients stay informed of industry happenings during these difficult times.
Click the following headlines for the full lists.
This guide collects resources curated by trusted sources like the American Land Title Association, bank regulators, and the Consumer Financial Protection Bureau to provide property owners with guidance during the COVID-19 crisis. Some of the resources provided include:
- A real-time list of county record office closures
- Disaster recovery and business continuity plans
- Information from major banking institutions regarding their policies and customer outreach
- Information from mortgage insurers
- Federal Housing Administration (FHA) foreclosure and eviction moratorium
As more states head into lockdown or shelter-in-place situations, open houses are a no-go now and for the foreseeable future. While many are concerned about what this means for their business, there are options available as long as you are willing to get creative and embrace technology. In order to help facilitate this shift, the NAR has created a set of guidelines to help members navigate this situation in a way that is safe for them and their clients.
A $2 trillion economic relief bill just passed the U.S. Senate and is expected to pass through the U.S. House and Presidential office without issue. The NAR has been hard at work to make sure that self-employed and independent contractors will see relief from this stimulus package.
Realtors are a vital part of their communities; they know the neighborhoods and small business owners whom they see every day. During the COVID-19 crisis many realtors across the country are doing their part to help the most vulnerable people in their communities.
This is a constantly evolving situation as every state is being faced with tough decisions that affect the health of the citizens and economy. We encourage realtors to stay safe and continue checking resources as the situation progresses in their area.
Project Hatch: Advice directly from successful people
(BUSINESS) Project Hatch shares stories of major founders around the world in an effort to help others grow professionally and “found” their dreams.
Even if we’re at the tip top of the professional food chain, there is always something that we can learn from those who came before us. Additionally, there is always something that can be learned from peers (or mentors if you’re continuing the career-ladder climb).
This is the intent of Project Hatch, which is designed to tell the stories of founders in order to inspire others who are looking to go down that path. “The best way to learn how to build a company is from those who have done it before,” according to Project Hatch’s official website. “Project Hatch features case studies and analysis from the view-point of founding teams.”
Examples of case studies include some current heavy hitters, such as Tyler Handley – founder of Inkbox, Alex Zaccaria – founder of Linktree, and David Ciccarelli – founder of Voices.com. Their stories include where they are and how they got there.
“So for us, the primary drivers of growth have typically been performance marketing and the associated word of mouth and the organic and return off that. So Facebook, Instagram, Pinterest, Snap and we’re experimenting with TicTok right now,” – Tyler Handley
“We created a solution to a problem that we thought was unique to us; but it turns out millions of other people had the same problem. One of the key moments of validation for us, was early on, when the platform was uploaded to Product Hunt,” – Alex Zaccaria
“Exactly two years ago, we raised $18 million USD from Morgan Stanley Expansion Capital out of San Francisco. As growth stage equity investors, they were attracted to a large and growing market for voice and audio products,” – David Ciccarelli
The case studies include four key areas that are broken down for major industries. These include: ecommerce, media, agency, and SaaS. With ecommerce, you can learn how to create scalable stores; with media, you can find out how media giants receive hundreds of millions of views on different social platforms; with agency, you can learn how to be more innovative in order to standout in today’s competitive market; and, SaaS offers the most passive form of online income when done correctly, so they feature those who have done it (and are making $600k per month!)
Project Hatch boasts over 15,000 monthly users, over 33,000 monthly page views, and 111 monthly interviews. The site also includes run downs of celebrities’ net worths (so, be sure to look through that if you want to feel bad about yourself).
This is a solid platform that offers something interesting for everyone at any point in their career. However, I would be remiss if I didn’t mention that, since there is so much professional advice out there, don’t go overboard looking into so much of it that you forget to do your own work.
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