From BetaMax to Blackberry, Blockbuster to Borders, the landscape is littered with products and companies that fell from grace because they failed to adapt to new technologies and changing customer demands (and that’s just some of the B’s).
Time Magazine recently published a list of the 20 most successful failures of all time, and this should serve as a warning for all businesses today (sadly we can now add Toys ‘R’ Us to the list; the popular outlet responsible for lighting up the eyes of generations of children is the latest in the long line of retailers to be undone by debt and a failure to adapt to the shift in online shopping). So what can those of us in the real estate industry learn from the unfortunate downfall of others?
The Case of Your Home Direct
When it comes to technology, it’s not just about being on the cutting edge, but about knowing which technologies will meet your customer needs. Most of you are probably familiar with Your Home Direct (YHD), though the startup was such a flash in the pan that some of our youngest readers may not even remember the firm. In the early 2000s, YHD hit the real estate scene like a bull in a china shop. CEO Glenn Cohen said he was going to “revolutionize the real estate industry,” and for a brief moment, it seemed he just might. His tech-driven discount firm listed nearly 2,700 homes and sold more than 1,400 listings in its first year alone; in a single week during March of 2001, the firm sold more than 70 homes and took in more than 90 listings. But by 2007, YHD had gone bankrupt. What happened? Customer service and transaction management were considered horrible and word quickly spread, leading to a swift downfall for the discount brokerage.
Figuring Out What Customers Want
While everyone loves a deal, discounts aren’t always a top priority for people as evidenced by YHD. According to a Harvard Business Review study of 75,000 people, the most important factor for customers is the reduction of effort; they want simple solutions and they want them quickly. However, most buyers continue to want an experienced real estate agent on their side during real estate transactions; in fact, 88 percent used an agent or broker to buy their homes last year, an increase of nearly 20 percent since 2001. So what can today’s brokerages do to marry the idea of convenience and customer support?
Making Progress by Going Paperless
One way many brokerages are adapting to new technologies and meeting the needs of customers and agents is by migrating to a paperless office. By utilizing a document cloud, files are accessible anytime from anywhere there is an internet connection. Paperwork can be initiated and completed quickly and conveniently, and valuable time is gained by eliminating the need to sort through disorganized files and overflowing filing cabinets. Not only that, going paperless gives agents a professional and tech-savvy appearance (and helps save the planet).
Determining the Right Technologies
Other than going paperless, today’s brokerages have a lot of technologies at their disposal. There are products for lead generation, customer relationship management (CRM), marketing, accounting, eSignatures, and more. When determining which make the most sense for your brokerage, you’ll want to look at six factors:
- Your budget. This will be one of the biggest concerns for the smallest of brokerages, and while hesitation due to cost is understandable, brokerages also need to consider the benefits that can outweigh costs in the short- and long-term.
- Your needs. Sure, most brokerages could benefit from all the technologies listed above. But if budget is a consideration, then next should be a needs assessment to determine which technologies can have the quickest and greatest impact.
- Scalability and load. Small brokerages will want to be sure the technology can grow with them; having to change platforms within a few years due to growth, and the platforms inability to manage it, is inefficient. On the other hand, larger brokerages will want to look at load; can the platform handle your teams’ needs?
- Mobility. These days, most agent work doesn’t take place in a cubicle. It’s happening from home, on the road, and at a buyer or seller’s residence. Making sure a technology platform works with iOS or Android interfaces is a must.
- Ease of implementation. Most brokerages want to support their agents by providing them with useful tools and resources but may unwittingly make an agent’s job more difficult by introducing confusing new technology. Make sure any platform your brokerage adopts has a user-friendly interface for fast onboarding, and that it provides proper support for any issues that may arise.
- Integration. Your brokerage may already have other platforms in place; you’ll want to be sure any new technology platform integrates with those or you may inadvertently create more inefficiencies.
What’s Next for Brokerages? Digital Transaction Management
A comprehensive technology that’s sweeping the real estate industry is Digital Transaction Management (DTM). Embracing a DTM means each step of the transaction process is performed seamlessly in one platform, eliminating the need to enter the duplicate information across products. This process increases productivity, expedites transactions, and boosts customer and agent satisfaction. A recent National Association of Realtors (NAR) report reveals that millennials represent the largest share of recent homebuyers. Adopting a cloud-based, mobile platform that makes the transaction process convenient for this new generation of buyers and sellers is one-way brokerages can keep up with changing customer demand; it can also help attract newer, younger agents that don’t want to be burdened by paper files or clunky technology.
Real estate is a one-of-a-kind industry. But that doesn’t mean we can’t learn from the mistakes of other industries. Indeed, it’s an exciting time to be a broker. If you’re building a new brokerage, it’s important to weigh the technologies available and adopt those that can benefit customers and agents the most. And if you’re an established brokerage, you can never rest on your laurels; continuous innovation is a must. Just ask Toys ‘R’ Us.