Screw consumers… Let’s use internet tools to do what REALTORS do best!

I gave a presentation last week in Portland where I asked the audience of about 300 REALTORS two questions:

  1. Do you drive most of your business from referrals… friends, family, past clients, other agents, etc.?
  2. Do you drive most of your business by reaching out directly to consumers… ads, online home search, etc.?

A little over half the audience raised their hand to the first question, while under 10% raised their hand to the second, which didn’t really surprise me because I asked a similar (but more convoluted) question in an online poll about a month ago and got similar results (i.e. 58% said referrals).

I think it’s extremely safe to say that in terms of generating business, most real estate agents (and most professionals for that matter), are better at reaching into their network of friends (and friends of friends) to drive business than reaching consumers directly.  And yet, almost all online tools, commentary and critiques of social media within real estate focus on the inability to of the tools to directly reach consumers.  (One of the more eloquent critiques was written by Marc Davison).

Let’s break down the skills and tools that an agent needs to successfully run online campaign that directly targets consumers:

  1. Project management. Hire someone with web design, marketing and coding skills (or sometimes a team of people with these skills) and make sure the site actually gets built!
  2. Writing. Either need to write content, or at least advising and managing the person creating the content.
  3. Online promotion. Either need to optimize your landing pages and drive lots of inbound links to your site (so that you can get free traffic from the search engines) or buy traffic through online ads
  4. Conversion optimization. Optimize your site to get consumers to register (probably through a IDX/home search tool, which also has to be integrated into your site)
  5. Prospecting. Prospect the database of users (assuming your IDX allows for this) and ask them for your business. Otherwise, wait for the consumers to contact you (probably when they “request a showing”).

None of these skills are particularly hard, and I’ve seen agents with almost zero internet experience pick them up and start generating business in less than half a year. However, I’ve seen way more agents get frustrated at the lack of results afte they “master” only one or two of these skills…

For example, I’ve seen agents spend two years just trying to get a good site built (project management #fail)… or they get a beautiful site built for them, but never add any content (writing #fail)… or they write well, but don’t know how to get anyone to link to their content (promotion #fail)… or they get people to their site, but don’t give users a logical way to register (conversion #fail)… or they get people in their database, but aren’t setting appointments (prospecting #fail).  In other words, none of the skills are all that hard, but they aren’t necessarily intuitive to everyone either.

Now, let’s compare that to the skills and tools used for a referral campaign that’s the bread and butter for most agents:

  1. Networking. Make a connection with friends, family, past clients, other professionals, etc. (could be through events, organizations, or outreach via postcards, etc.)
  2. Sales. Ask them for your business (or more likely, if they know of any business they can send your way)

If it’s not obvious, the skills that drive the bulk of real estate business today (i.e. referral business), are vastly different than the skills needed to convert consumers into clients on the internet… so no wonder most agents get frustrated when their initial internet activities don’t effectively reach online consumers.    It’s a completely different set of skills.

    Instead, if you’re an agent that does most of your business from referrals, you should be thinking “how can I use internet tools to reach and build my referral network?”

    And the answer to that question is definitely something I’m going to continue exploring in the near future.   My opinion is that the tools currently marketed to real estate agents do really crappy job of building up a sphere because they almost inevitably focus on helping REALTORS reach consumers directly.  When I searched for a referral networking tool last month to feature in this article: Getting Serious about Lead Management, I couldn’t find one that I liked well enough to mention.

    However, I’m going to write a post in the next day or so on a new favorite tool of mine: Gist.   It’s the best sphere building tool I’ve used, because of the way it let’s me filter through people within my network based on criteria that I set… a feature simply not available on tools like Facebook, Twitter, Google Buzz, Seesmic, TweetDeck, etc.

    I’m going to be presenting the general idea mentioned in this post at lots of conferences in the next few months (Chicago, Atlanta, Las Vegas, Toronto, etc.) and more than your agreement, I would really love to hear your critiques…

    Where are the holes in my argument?   Am I screwed up thinking agents should forget focusing on reaching consumers directly and instead focus on building up their referral networking?

    4realz Roundtable is Back: Using Facebook Pages to Generate Business!

    [Update: What a great roundtable discussion. Thanks so much to Reggie Nicolay, Ricardo Bueno, Loren Nason, Mike Mueller, Stacie Wells and Brad Nix for joining the roundtable! If you missed the call, you can now listen to a recording via the TalkShoe widget to the right.]

    Inspired by a conversation with Ricardo Bueno, I’ve decided to bring back the 4realz Roundtable radio show for a ONE more show!

    This Thursday at 2pm PST, we’re going to have a conversation with real estate professionals on how to use Facebook Biz Pages to market yourself and I want you to take part!

    Taking part is easy, but there are so many ways to take part it can seem a bit confusing. To simplify things, I’ve tried to break down the most common options here:

    • To simply listen to the conversation from your computer, return to this blog post at 2pm PST (5pm EST!) and click on the play button of the widget in the top-right of this post! This will stream the conversation to you through your computer!
    • To simply listen to the conversation from your phone, at 2pm, call this number: (724) 444-7444 and use this call ID: 20339. You’ll then be able to listen to the entire conversation from your phone (or more likely speaker phone!)
    • To listen to the conversation AND join the chat room, head over to the 4realz Roundtable TalkShoe page a few minutes before 2pm. As soon as you’re logged in, you’ll be able to start chatting with everyone else who’s logged into the call. You’ll also be prompted to stream the call on that page. While it’s not necessarily, I recommend that you sign up for a free TalkShoe account because it will let the rest of us identify you easier within the chat room!
    • To talk part in the call AND join the chat room, a few minutes before 2pm, call this number: (724) 444-7444 and use this call ID: 20339. Then join the chat at the 4realz Roundtable TalkShoe page to let me know you’re on the call. I’m not going to let EVERYONE who’s interested be on the call at all times (the quality deteriorates quickly with too many people), but I will unmute people as they let me know (through the chat room!) that they have an interesting question to ask and/or some insight they’d like to share.

    Hopefully, you can see that taking part is really not that complicated… For most folks, listening to the conversations while taking part in the chat room is the best option!   Because the 4realz Roundtables attract some great people within the industry, I think you’ll find we’re going to have a great conversation where we’ll be able to share some great insights!

    So far, I know that Ricardo Bueno will join me on the call, and I’m pretty sure Loren Nason is going to join to talk about some of the ways he’s been adding interesting apps to business pages.   In addition, I’ll be updating this post to add a few more people as we get closer to the call. If you’re doing some interesting things with Facebook Pages and interested in sitting at the roundable, let me know in the comments!

    By the way, if you’re new to the concept of the 4realz Roundtables, check out some of the conversations we had last year where I was able to bring together some really great people talking about all kinds of interesting real estate conversations. If my consulting work hadn’t ramped up in such a major way, I’d probably still be doing these conversations on a weekly basis because they were so much fun (plus, I learned a bunch each week!) Some of the topics we took on last summer were:

    The 1st 4RealzEd event was yesterday and…

    4ealzEdI think I’ve recovered enough now to actually post about it! 🙂

    Despite our best efforts to be prepared, the day started off a bit rough with a nearby mudslide taking out power in our building in the morning (meaning no hot coffee and no projector) and a 9-car pileup on a nearby freeway slowed me down tremendously. AHHH

    So, to say it started rough would be an understatement… But once it started, things seem to get on a roll quickly.

    I started with an overview of consumers expectations in a web2.0 world to set expectations for the day… Jim followed up with presentation on optimal features and design for a real estate website. Then it turned back to me for a presentation on social networking… lunch… then another presentation by me on creating value through blogging about communities. And we returned for the day’s finally with Jim giving a engaging presentation on measuring and tracking marketing results to ensure a positive ROI.

    All around, it was a wonderful day! And, maybe they were just being nice, but the attendees who talked with me said only good things about the education.

    Because I promised attendees I would give them a list of all the sites I mentioned in my presentations (so that they wouldn’t have to ask me to spell out each URL), here is the list for everyone’s benefit.

    Consumer Expectations in a Web2.0 World:

    Engaging in Social Networking to Earn Clients

    Using Blogs to Build Communities

    I wasn’t tracking the sites that Jim mentioned, but there were not nearly as many of them in his presentations…

    And thanks again to all the bloggers who have helped spread the word about the event, the sponsors who helped us keep the price low and all the attendees who made the day possible!

    I received some incredible feedback from all three groups, which is going to lead me to make some changes to the upcoming events (I’ll announce those early next week!). Great stuff all around. Thanks again to everyone!

    45 Things I Learned at RE Connect

    (some names left anonymous to protect the innocent)

    1. There’s a hell of a lot of VC money floating around this industry. I was surprised at how many people there were with lots of VC funding. Joel seemed to notice the same thing: “a whole new crop of real estate search sites that are going to be hitting the market”
    2. Reporter from the REALTOR Magazine was in the audience of our presentation. (thanks to Ines for pointing out the story: NAR is opening their eyes to blogging.)
    3. Zillow dropped their beta tag.
    4. Zillow’s big press release (picked up by many others) was a case of “make-news”. I’d be worried for their business if they weren’t making the improvements they announced (adding more listings, improving the quality of Zestimates, dropping beta, etc.). Joel doesn’t write much about of the improvements, while Greg quotes it extensively and seems to gush about their RETS announcement, which even the Zillow team pulls back from in the comments.
    5. Trulia was profitable for at least one month last year expects to be profitable at some point this year.
    6. According to comScore, Trulia had more traffic than Zillow in December! (Congrats Mike on the awesome prediction)
    7. comScrore and Hitwise are measuring traffic on two different internets. (Hitwise shows Trulia with 1.45% of category traffic and Zillow with 2.28%).
    8. Also interesting from the Hitwise report is that Move.com moved from #2 to #5, while RE/Max moved from #2 to #5. That’s big enough news where I would have expected to see a Press Release. Realtor.com at #1 and Move.com at #2 is huge for Move, Inc., even if it is only for December. (Oddly, I’m getting all the Hitwise numbers for December from an Inman Blog article on my feedreader. The actually article was removed from their site for some reason, so maybe the numbers are butchered!)
    9. Vast.com acquired Adaptive Real Estate Services (ARES). (That answers one question, although it does not give me any confidence that Vast.com has thought out their listing content acquisition strategy)
    10. Lots of neighborhood projects coming out. Here’s my (unsolicited) advice to anyone looking to build a successful social network in this space. If you really want consumer adoption, you’ve got to have a clear answer to this question: “What’s the consumer benefit?” So, so, so many of the “social networks” I saw this week were focused around real estate professionals. ActiveRain was an anomaly. Be able to explain your consumer proposition clearly, or don’t expect success.
    11. With that said, VillageMaker from RealProSystems will likely be a success… in that agents will the product, not in the sense that consumers will use it. This is the ultimate social network with the real estate professional at the center of the transaction in that a real estate agents must invite consumers to this platform. Sounds great, except it won’t work for all but a few agents.
    12. I am now the owner of “all the marbles”.
    13. Google staff really don’t like it when you take pictures inside their offices. Don’t be evil (Jay noticed this too!)
    14. Saul Kline is still the same great guy even after becoming CEO of Point2. (Frances has photos). His stated approach for moving Point2 forward is sound, although I’ll let him explain that approach when he’s ready.
    15. Lots of start-ups are twisting and turning to think how they an make their products more REALTOR friendly in the hopes of catching some Second Century funding! Mark Lesswing is a popular man at these conferences.
    16. I was surprised how many tech start ups get funding with only the roughest plans to get listings. Teresa gets that this is a mistake!
    17. Trulia launched their Publisher Platform. Robbie loves this! I can’t tell what Joel thinks… and Greg pans the service. I don’t follow Greg’s logic that it weakens overall traffic to Trulia… Mainly because nobody in the online real estate space has enough market penetration to think there are a finite number of users for their services. Trulia needs more listings. If this helps convince more brokers that they need to send their feeds to Trulia, then it is a good move. (Joel has an example of what the branded service looks like on FOREM)
    18. I really liked one startup and can’t wait until they launch in a little bit because I want to see how they market themselves. The product is an (solid) incremental improvement on search, but I don’t think it is enough of an improvement to go viral on its own.
    19. The beer for bloggers event is a great way to start off a conference. (photos on the Zillowblog and Sellsius).
    20. Teresa has some great photos from the week, including this action shot of me. Dito for Jeff.
    21. The WellcomeMat boys are quite the fun crowd. I really want to see them succeed because the technology is top-notch. Next step for them is figuring out a way so that their users don’t have to do their own marketing. If uploaded listing videos were getting hundreds (or even dozens), I think they’d be well on-their-way to being a a must-have product for most agents.
    22. I’m more bullish after RE Connect on Altos Research.
    23. Drew found a way to work at RE Connect. I’m not sure how he pulled it off.
    24. Professor Nouriel Roubini didn’t show up to RE Connect with the idea of making a lot of friends. He was consistently vocal in his belief that the downside to this market is going to be HUGE. He made Noah look like a moderate! (Here’s the video!)
    25. While I didn’t plan to go to many of the sessions, I surprised myself by going to only one session (see previous comment).
    26. I LOVE NYC.
    27. While I enjoy writing the occasional update, I’m simply not a good twitterer. On the other hand, Daniel is the twitter man.
    28. Apparently, there is a $15B dollar opportunity in the online real estate space since I heard multiple people throw that number around.
    29. Rumor has it that Cyberhomes is going to spend a LOT of money on advertising this year in order to reach out to consumers. This is a change from my take on their original approach in that they were going to focus on reaching out to agents by offering them a “white-label Zillow”. I like Marty Frame a lot, but I don’t think ads will do the trick. I hope they have one-more thing up their sleeve.
    30. Kris Berg is always lovely. Offline or online, she is one of my favorite people in the RE.net.
    31. Jay Thompson is another one that I found to be just as great in person. Networking with people like him is the reason to travel to NYC.
    32. The business mind of Damen Pace doesn’t stop moving.
    33. Rudy has some mad video editing skills.
    34. Daniel is the video man! It’s obvious he loves this stuff.
    35. As one would expect, Lockhart is quickly growing his team at Curbed and it was a lot of fun to meet them at the NYT party. From what I saw, Lockhart tried to dampen expansion rumors. He would only talk about Chicago at this point.
    36. BofA bought Countrywide. Lots of commentary on Jillayne’s post on RCG and Brian Brady’s post on Bloodhound.
    37. Redfin’s PR about returning $10M to consumers didn’t do much for me. I’ll be more interested to find out when they start making business model changes in order to get profitable.
    38. People have begun calling Rain City Guide “Ardell’s Blog” behind my back! LOL!
    39. Inman will soon be launching a new website with new features and a new design.
    40. Up Yours! Video TV war! Intothebox.tv rips on BrokerIPtv.com (around second 40). Not to take sides, but I was interviewed by the BrokeIPtv team at RE connect, and will be interested to see what comes out of that. On the other side, Rachel of Intothebox is oddly interesting… In watching, I just keep waiting for something to fall or break.
    41. I could never repeat linkation too many times. I keep repeating myself and people continue to act like it is new information. Please tell me if and when I need to stop with the linkation bit. 🙂
    42. ActiveRain introduced a few new people from their team. Rumor was that they have some funding that they will announce soon.
    43. Brendan King and other ex-Point2 folks were passing out business cards with the company name VendAsta. My guess is that the name is only temporary.
    44. Greg Tracy has branched out the BlueRoof brand to start doing consulting and website building for other real estate professionals. He “gets it”, so I can only imagine further success ahead.
    45. I really do enjoy just about everyone in the RE.net and real estate tech communities. 2008 is going to be fun!

    Phew! Now I think I’m caught up so that I can get back to regular updates!

    Still can’t wrap my head around IAC…

    …although I’m sure there is a logic behind the purchase of the brokerage Distinctive Homes and Land by their realestate.com division.

    Maybe my problem is that I don’t really get realestate.com. I’m presuming they sell leads to agents (or what would be the purpose of their When AgentsCompete… You Win! product and calls to action of “receive an immediate call” throughout the site). Are they buying a brokerage because they’ll be able to get a bigger slice of the pie if the agents are in-house?