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Avoiding the Industry Disaster

August 27, 2008

Just how close is the real estate industry to duplicating the disaster achieved by the airline industry? Contrary to popular belief, neither industry has been challenged by serious technology developments that have created “alternatives” to their essential model. People still fly on planes. Most consumers work with agents. Yet anyone who has had to deal with either industry lately knows that REALTORS are coming dangerously close to recreating the airline industry’s sub-lawyer-sub-car-salesman reputation.

For REALTORS, it shouldn’t take much to avoid that fate. But we must act now.

Our concern must always be how the two industries come dangerously close to being similar to each other. Obvious examples come to mind: Inept real estate agents sometimes remind us of the drones of emptiheadedness that airlines put behind the counters at the gate. Agents saying “all buyers are liars” reminds us of how close we’ve come to that exasperated agent who says, “If i have to tell one more person that the flight was cancelled, I’m going to scream…” as if all passengers had the same telepathic schedule-updating implants that the airline industry obviously installs in the heads of its gate attendants.

Still, the similarities are instructive because REALTORS can still step back from the brink. Airlines are already over the edge. A recent call to a major international airline went like this:

“Thanks you for calling…. if you are calling about your frequent flyer miles account, press 3… thanks for calling the frequent flier account department. Please call this other 800-number. (dial number). Thanks for calling the frequent flier account department. If you’re calling because you’re a SUPER DUPER frequent flyer, please call THIS 800-number. (dial number). Thanks for calling the SUPER DUPER frequent flier account department. If you want information about your account, press 3.” FINALLY a live person: “Oh, sir, I’m sorry you’ve lost your frequent flier account number! If you’d we can provide it to you. Just fax us (yes, that’s FAX) your account number, name and social security number, and we’ll send you back your number and your PIN.”

I tried four times to see if she understood what she had said. Then I just hung up.

The lesson for REALTORS is this: If you’re still making it IMPOSSIBLE for consumers to get the simplest of information (the address of a listing comes to mind…) then you’re delivering the kind of “service” you get at an airline. If you require the consumer to fill out forms before you talk to them, or jump through a variety of strict communications hoops (like calling you, when they want to do IM with you…) then you’re not connecting with the consumer, you’re turning them off.

Every industry encounters bumps: Airlines cancel flights because of weather. REALTORS can’t sell homes because inflation is stalling the economy. Both homes and airline tickets are priced in dollars, so economic factors are always a consideration. On the other hand, I don’t get why both industries still make it so hard for consumers who are trying to pay them to actually do so…

For example: Some airlines now “hold” certain seats in the coach section of the plane for “premier” purchase or special customers. It’s an immediate turn off to not only put me in coach, but to then tell me there are even “more special customers” in coach than me. It’s insulting, and no way to build a rapport (or loyalty). If you hold seats for your customers who travel a zillion miles, then just upgrade them to business or first class. Leave the common customers amongst themselves - and treat us all equally - and, perhaps, with just a little courtesy. And for goodness sakes, take our money when we try to pay you! Don’t tell me a seat isn’t available when I can see it on my screen: I know you’re hoping Mr Moneybags will book it last minute, but I’m trying to pay you NOW! What’s the logic in putting off-limits one of the two seats next to the window (in a two-seat isle)? If two common customers try to fly together, only one can get the window. The other either has to pay THREE TIMES for the “premium seat” (at which point he should fly first class) or they have to split up. Now how is that supposed to encourage couples to take a vacation - especially in tough economic times. If we make the decision to fly on your plane, then sell us the seats in the back equally and fairly.

REALTORS do the same thing: which is why they court disaster like the airlines. The parallel experience to the “seat hoarders” in the airline industry are the “information hoarders” in the real estate business. A common example is that consumers who call a REALTOR will generally get them to tell you useful, helpful information about a property. Try to email one, and you largely get ignored, or at best, a choppy reply (usually ALL IN CAPS) that mostly says, “Call me and I’ll tell you the rest of the story.” Like the off-limits seats to the common people, differing levels of service to the consumer who chooses to inquire by email rather than drop into your office (or sit in your car, nice as it is) creates no less of a turn-off in the public’s mind.

Unfortunate parallels continue to plague the two industries. Recently I was on the phone with an airline who said they were charging a $20 call center fee for me to book over the phone; because the trip was complicated, I decided to talk to a person - worth the twenty bucks. Ironically, the price quoted on the phone was seven hundred dollars less than the price quoted on my screen. Bad information on their website almost caused me to go to another vendor. REALTORS should consider that when it’s not uncommon to find listings whose prices aren’t accurate, photos are from the last season or the scrolling-banner advertises an open house date from last month. If you’re using information to attract and sell to customers, it had better be right (and easy to get).

I think the airline industry is, for the most part, only a half-step behind the domestic automobile manufacturers. Their level of quality, service and customer relationship has fallen so low, that unless you “really have to” you’d much rather walk than give them your dollars. Exceptions are there, but mostly rare. A few good pilots or a cheery gate agent can’t erase years of customer neglect. Neither can one top producing agent, surrounded by dozens of deal-killers. Charging for checking your bags - or a lousy bag of peanuts - adds insult to injury; much like charging your full fee when you only delivered partial service. Consumers get it, and they’re becoming tired of getting it, you know exactly where.

REALTORS have one tiny advantage over the airlines: Most real estate consumers only use their services ‘rarely’ over their lifetime. Maybe 3 or 4 times at best. Airlines torment customers frequently, as travel by air is a regular occurrence for most people every year. Yet that “time interval” may be changing, as trends for younger buyers indicate earlier first-purchases mean more repeat incidents over their lifetime, and perhaps over shorter intervals.

Ironically, it wasn’t technology that doomed the airlines: Nobody invented the transporter or an alternate form of travel that challenged their fundamental product. It was their people and processes that because so self-centered that the customer was merely an afterthought. Even with Southwest’s example, the rehabilitation of the industry’s reputation is a clear impossibility. Same is true for the real estate industry: Regardless of the proclamations heard at speakers-who-are-really-paid-sponsors conventions, there really isn’t a technology disruption that’s pushing the industry to the brink of disaster. It’s always the people and the process.

Keep in mind: Both the airlines and the real estate industry call their most public-facing people their “agents.”

Written by Matthew Ferrara · Filed Under Featured, Management, Next Generation, REALTORS, Strategic Thinking 

Comments

2 Responses to “Avoiding the Industry Disaster”

  1. elissa on September 1st, 2008 7:28 pm

    Actually there is a lot of truth to this. i was surfing realtor.com for a property that looked interesting as an investment purchase. Found something that looked interesting so i sent the email for more information. Guess what I got back? - An email asking for my name, address, income and a bunch of other information that, at that point was no ones business. Not only did I not receive a direct reply about the particular property I had expressed an interest in but was deluged with emails from other agents from this chain of companies. That’s too bad really because I was a potentally serious buyer and now have no interest in doing business with that company. By the way i am an appriaser so am well aware of the ways of some members of our industry.

  2. Karin Hanna on September 2nd, 2008 10:03 pm

    I agree , we are an Industry in trouble , and doing more of the same is only fuelling the problems we face. It is People and Process that must change for our Industry to survive and even thrive in this ever changing world we live in. We all have to take responsibility for what we do and what we practice, but we also need some strong leadership and vision to take our industry and our businesses where we want them to go.
    The scarcity mindset and protectionist attitude this Industry has will be it’s downfall and we need to change that or change who we look to for leadership.
    We need to recognize that consumers everywhere are crying out for change, and realize that businesses succeed by educating consumers and delivering to them what they want, when they want it, and in the ways they want it. It is not about us, its about them. Denial is not the answer, action and change is, and there has never been a better time than right now.

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