When is a recession NOT a recession? When the definition of economics can be changed to fit the politics of the day, that’s when. How can the “country” be in a recession when so many companies are reporting great growth? Consider these headlines from the Wall Street Journal:
- Visa Inc.’s fiscal second-quarter net income rose 28%, as the credit-card transaction processor posted its first quarterly report as a public company. by ANDREW EDWARDS April 28, 2008 5:00 p.m.
- International Business Machines Corp. posted a 26% jump in first-quarter profit, supporting investors’ hopes that corporate spending, especially overseas, may be a bulwark against the deteriorating U.S. economic picture.
- Apple Inc.’s iPhone and iPod get most of the limelight, but it was the company’s decades-old Macintosh computer business that defied a broad slowdown in consumer spending to deliver a 36% increase in profit.
- Caterpillar Financial Services Corporation (Cat Financial) today reported record first-quarter revenues of $779 million, an increase of $66 million, or 9 percent, compared with the first quarter of 2007. First-quarter profit after tax was $124 million, a $1 million, or 1 percent, decrease over the first quarter of 2007.
- Oak Brook, Ill.-based McDonald’s Corporation, part of the Dow Jones Industrial Average, said it earned $946.1 million or 81 cents a share, up from $762.4 million or 62 cents in the first quarter of 2007. Foreign currency accounted for 5 cents a share of the latest quarter’s bottom line, the company said.
Ok, today’s blog entry is a cheap shot, but there’s a bigger story later on – so stick with me…. And you’ve heard it before, but if there’s one constant in this business, it’s that you can lead a REALTOR to water but you cannot make him think… or was that a horse and drink? Oh, who knows… but one thing’s for sure: You can give a REALTOR a digital camera but damned if they’ll use it.
Here’s the fun part. Go to REALTOR.COM and do the following search:
- San Diego, California
- $1,500,000 to No Maximum
- Single Family
When the search results appear, click Sort Results by Number of Photos.
Then click page 30 to go to those with the least photos.
Ok, I did it for you (you knew I would… )
How do you define insanity? Some say it’s doing the same thing over and over again, but expecting a different outcome. That sounds just like the real estate industry to me. In fact, two recent events I hosted might just prove that while all real estate may be local, the industry’s insanity is widespread.
First, zip out to the Midwest, where a group of about 85 brokers joined me for a breakfast meeting on “technology tips” to meet the challenges of the future. As usual, we start with a simple quiz. Just who is the customer of the future? What do they look like – today, and more tomorrow – demographically, economically, and most importantly, in consumption patterns? You might expect that a group that serves so many people might have some idea of just who they are – broad patterns of group traits. At the least, you’d think they would purchase some of the research from their own trade organization. Hopefully, an industry that says it’s all about the consumer’s needs would be able to say just what those needs were…
Nope. Not a chance. After a few easy answers – like how old the average buyer was or what percent of consumers used an agent – the answers were pure guesses. What percentage of buyers were over the age of 55? 20% is the answer; shock and awe was the result. What percentage of buyers had no children under the age of 18 at home – well, that’s 60%. Oh, no wonder my 4 bedroom homes aren’t selling…..
Read more…
Ever wonder why some REALTORS consistently take overpriced listing – even when they have access to pricing data in their MLS system? Is it simply because the agent is a wimp? Do they not know how to read the data, or generate an “absorption rate” analysis from it? Are sellers really so intimidating that, during the same meeting, they can force a REALTOR to take an overpriced listing, agree to endless newspaper advertising and cut their commission?
Naah. No matter how wimpy the agent is, nobody can be that much of a pushover (ouch, I just bit my tongue! I need to keep it out of my cheek…)
Maybe there’s another explanation. Could it be that something in the data is wrong - leading REALTORS to “accept” overpriced listings because the data has led them to accept overpricing as the correct position in the market?
Here’s an analogy: Ever wonder why the airline industry drives itself into bankruptcy on a regular basis? It’s simple: The pricing of seats in the entire airline industry is set by the dumbest CEO in the business. That’s right: If El-Cheapo Airlines decides they’re going to run seats at some crazy-low price, at the tiniest profit, all of the other airlines rush to match their price! That’s because, airline seats (like home listings) are commodities: and the lowest price in the marketplace sets the baseline for consumption for all buyers. In the same way that one airline with under-priced seats causes all airlines to drop their prices in order to compete for the buyers, perhaps a similar effect happens when real estate listings are overpriced in a marketplace. In either case, bad pricing policies ruin the industry for everyone – nationwide or in the local neighborhood.
This is the danger with un-carefully using MLS data for pricing references. The “dark side” of the data used for a CMA (market analysis) is this: if you don’t know how to analyze the data, then you’re only presenting it. So, in the old computer lingo: Garbage In, Garbage Out. Bad MLS data will lead to bad pricing decisions: and a bad marketplace. And where does bad data come from? Well, overpriced listings, of course.
Look at it this way: If the current listing inventory has been priced incorrectly (by even just one agent who will take any listing “at any cost”), then the MLS data becomes corrupt. Other agents, relying on the data to make “comparisons” with comparable competing properties are sabotaged. Their market analyses will become faulty, too, at least in the eyes of the seller, who wants the most for their sale. So a few agents overpricing a few listings could cause all agents to overprice their listings, too. Because listing price is public. And sellers have it before they even ask an agent to stop by with a CMA.
Read more…
ver wonder why is seems like some companies employ technology in ways that actually decrease their efficiency or harm their customer service? It’s amazing how this happens over and over again.
Of course, it all started years ago – when phone systems introduced the autoattendant. The initial idea was to use technology to reduce the manpower and provide better options to callers – routing them to helpful departments with less wait time. Well, we all know what happened with that, don’t we: Today’s autoattendants are labyrinths of chaos, offering so may choices that callers end up going in circles, jabbing “0″ repeatedly to get to someone live and defeating the whole purpose of adding technology in the first place.
Same thing has happened with the real estate industry, it seems. The biggest example is the advent of the online “inquiry” form on listings: The idea is that the e-consumer can “conveniently” browse listings on the web, then fill out a quick form requesting additional information. And, as we all know, what does the consumer get from this techno-innovation? Nothing. Literally. Ok, maybe they get an “auto response” which is basically an email “confirming” that someone is actually ignoring you (your email is sitting in a queue somewhere waiting for someone to get around to it.) But at least half of the time (NAR stats), email inquiries from the public end up in the same “routing” hell as the autoattendant system.
Read more…
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- Matthew
So here’s a great story Amy told me the other day, that’s a perfect example of “who’s in charge” of the technological changes happening to the real estate industry. The story comes from a manager in a group that Amy was coaching. The topic was: What’s happening in your offices with technology?
The manager tells this story: During the office meeting last week, one of her agent’s cell phones kept ringing. He’d hear the ring, grab the phone, flip it open and say, “Hello?” Nobody would be on the line. A few minutes later, the phone would ring again; he’d grab it and flip it open; Still no caller on the other end. This happens two more times. Finally, another agent becomes a little frustrated and asks to see the phone, thinking perhaps something is wrong. She looks down at the phone and says:
“You’re not receiving a call. You’re getting text messages from someone!”
So, it turns out, the agent was getting SMS/text messages from a client who wanted to arrange to make an offer on a property. And he thought the sound the phone was making was ringing for a call! He didn’t even recognize that the phone could get messages; that it would make a sound; and most of all – that his client would do such a thing RATHER than call him.
And that’s the story; simple. Technology change is going to happen TO YOU whether you like it or not; whether you’re ready or not; whether you get it or not. And you can’t change or stop it. Your clients know how to use text messaging (or who knows what else) and the phone you bought IS READY to do it.
The question is: Are you?
Thanks, Amy, for recounting that story for us. Life is so much better than fiction.
As many of you know, our company plays many roles in the industry: consulting, training, leads management, coaching and help desk services. From each of these inputs into the industry, we see a lot of operational procedures. Some work. Others are woefullly broken. A trend, however, is readily noticable pattern of real estate agents and brokers who continue to use outdated equipment and software.
Our help desk handles almost 20,000 calls a month: trust me when I say: We’ve heard it all. The agent with the Windows 95 desktop; the personal assistant with the dot-matrix printer for labels; the manager who has finally “upgraded” to Outlook 2000 (that’s not a typo).
Why get a new PDA, when the six year old model still “turns on”? Why change to the new MS Word 2007, when Microsoft Works still makes nice documents. What do you mean, it will take 2 hours to download the update to my Winforms; could it have anything to do with the fact that I’m still on dial-up?
Read more…
I thought it would be appropriate to start with a quote:
The greatest wisdom, not applied to behavior or action, is useless data. — Peter Drucker (1909 – 2005)
No better summation of the challenges facing the real estate industry deserves our attention, especially in the wake of endless media accounts that the housing market continues to slump (of course NAR”s reports aren’t so chipper either). But what does this quote mean, really?
Well, in my mind, it means that its time to stop nodding our heads and saying, “I know, I know” about all the things we “know” we’re “supposed” to be doing and to actually start doing them!
And most importantly, this means focusing on technology – especially the stuff you already have – and getting more out of it. Rather than seeking the next quick-fix, snake-oil solution to our woes, why don’t we just focus on all the tools, training and techniques so many of us have been building for the last few years and start putting it to work. Especially on critical issues such as capturing leads, pricing homes more competitively and promoting listings with enhanced multimedia instead of bullet points and still photos.
That’s the real challenge for this year: Not waiting for some amazing new technobauble to arrive that will distract us from the hard work that has to be done – but actually doing the hard work!
Read more…
As the Spring approaches, just about the only thing that’s heating up hot in the real estate market is the temperature at open houses. Or at least that’s what many brokes are telling us: slump, slump, slump. Inventory has stalled, buyers are cautious and choosey. Sellers are unreasonable. Oh, and the internet now REALLY sucks.
At least, internet leads are “terrible” – if we’re to believe the agents who seem to have no problem throwing the vast majority of them away. Still, everyone’s focused on “redesigning their website” or “pay per click” or “driving traffic” or whatever other form of pixiedust they think will bring in the business.
And everyone’s forgotten about prospecting.
You know: sales basics? Generally getting back to customers who call/email/IM/visit your open house? Following up. Checking in. Chasing the sale. Any of this ring a bell?
Probably not if you joined the industry in the last three to five years. Who prospected when you could just take orders for scarce inventory. Sorry – fun time is over. Now it’s time to do what all salespeople – in all industries have to do: Prospect.
And it’s not like agents haven’t heard about prospecting somewhere before. I mean, it’s the number one thing agents are “screaming for” nowadays. How can I prospect better? Like the lady on the northshore demanded in class not too long ago: “I came here today so you could tell me the one thing I can do when prospecting to MAKE internet customers get back to me!” (We had to sedate her when we told her we had just ran out of Slick-Sales-Serum…)
Look, Prospecting isn’t MAGIC. It’s a skill; habit; a process. There is NO TECHNOLOGY that will MAKE customers build relationships with you. Not email. Not websites, Not IM. Not even blogs. If you’re reading this, then you’re reading something from me; from a person. And that’s the only way prospecting will ever work. When people talk to people. Using technology: sure. Just technology: never!
Read more…
Everyone knows I love the Blackberry – especially the Pearl, and it’s Boomer-friendlier partner the Curve. Everything about them screams “Look! You can succeed in sales!” They are slim (unlike the Reuben-sized Treos) and bright screened (unlike classic cell phones) and you can type with either hand, one-thumbed, and you don’t need a “stylus” or to poke the screen like Bobo the Chimpanzee (unlike the iPhone). And most of all, what really makes the Blackberry the ideal sales platform is that it’s solid. Rarely do you have to “reset” your Blackberry (whereas I had to reset my Motorola Q so many times I finally reset it using the front-wheel of my car).
The very “solidness” of the Blackberry is what makes it ideal: your appointments, tasks, address book and email work accurately and quickly every minute of every day, mostly because they perform most of the functions of Outlook, but they aren’t Outlook. Palm tried this with their own apps that “synchronized” with Outlook, but they took years to include their own synch-condiut. Users just got fed up trying to get three programs to work with each other – Outlook, their Palm calendar and the conduit. Blackberry set the standard in real-time synchronization without any additional software – and completely wirelessly – long before others figured out that their “cradles” meant that their devices were still babies. Even the web browser and RSS reader in the Blackberry is fast and easy to navigate – especially when you set it to emulate the Blackberry mode and turn off the clunky Microsoft javascript compatibility. Once again, Blackberry excels because it mostly “turns off” the Micro-craftiness of Microsoft tools, most of which only cause mobile devices to crash throughout the day.
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For most of us with important online business presence, email represents a vital aspect of our customer relationship management efforts. Email is almost always the first-contact with new clients who come to us from our Internet sites. Email is frequently the method of second-contact, too, for example with my students who follow up with questions after first-contact in a seminar. Email has become the preferred daily communication method for millions of businesses, eliminating voice mail and interrupting phone calls during work hours. Entire companies have sprung up to make email the premier replacement for direct mail (Bulletmail), newsletters and client follow up marketing efforts. Like the telephone of the 20th century, email has become the 21st century’s tele-tool for lead generation, customer service and daily communication. Given its central importance in our businesses, you still would not believe how embarrassingly awful email communications remain today…
Let’s start with an example: Here’s an email I received in request for more information on our seminars.
From: [Sender's name eliminated to prevent embarrassment]
To: Educator@att.net
Subject: thanks for replyingHello sir,
How r u i need ur invitation card i want to attend ur seminar
i am to intrested plz send ur invitation card i hope ur sending me ur
invitation card thankss waiting ur reply
bye
I debated (for about 2 minutes) whether or not to post this message. Some of you may think it’s vindictive (or just mean) but I think it’s too typical of the kind of attitude I encounter in the industry that it warrants exposition here. Yes, I’m going to present to you an email I received from someone this morning. And yes, you’re going to gasp with horror when you read it (or at least, chuckle with incredulation). Unfortunately, too many of us may recognize someone “we know” in this message. And that, my friends, is why so many REALTORS fail.
The email I received was in response to my latest article that appeared in the Commercial Record in Connecticut. Here’s a piece from the article:
…. . For some, the pace of transformation far exceeds the incremental improvements their companies or MLS systems usually roll out. During the boom-cycle, most of their focus was on deals rather than building skills for the future. So it’s no surprise that the tech-gap between agents and their clients is wider than ever. And it’s equally common to see looks of bewilderment agents’ faces when a Gen X buyer asks them to SMS an MP4 of a listing to iPhone.
Read more…
by Matthew Ferrara
By now, every real estate professional knows the power of Google. Need to find something on the web? Go to google.com and type it in. Don’t worry about spelling (it suggests corrections if you mistype) and just use normal language. In nanoseconds, more pages than you could ever click are presented for your perusal. The same approach applies to Google News, Google’s Froogle shopping area, pictures, blogs, you name it. Search and find. And that, most of us think, is what Google is all about.
But what about the other Google? You know, the one in which the multi-billion dollar behemoth puts its marketing clout to work for you and your website in ways you could never do by yourself. And not just the search engine placement and pay-per-click stuff either. I mean the other Google – the one that makes radio ads available for as little as $2 and newspaper ads for up to 93% off.
by Matthew Ferrara
A recurring theme I’m hearing lately from some clients is that they are in need of a “system” that they can use to “automatically” prospect their new and past clients. You know, a database or something with some sort of “drip marketing” campaign tools. Isn’t there something like that, where I can just put my clients into it and ‘forget it’ while it keeps sending stuff to them.
Well, yes, there are things like that. Databases. Campaign managers. Drip email tools. Autoresponders. Even integrated versions of all of the above.
Problem is: none of them really lead to sales.
Now, don’t get me wrong: programs like Top Producer or ACT or even Outlook are great ways to organize data (and calendars and to do lists and the such). They even make it possible to create the ever-exhalted LABELS that are the staple of real estate relations worldwide. And sure, some of them even do a darned good job sending out emails, especially those (yawn) template kinds of mailings that are oh-so-exciting…
