Related Blog Entries:

• Radically Rethinking Leads Management
• The Real Meaning of Days on Market
• The Aflac Lesson for Real Estate
• The Manager has Left the Office!

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Ford is the best historical example of the Failure Mindset: Where it once dominated the automobile industry, its “you can have any color you want, as long as it’s black,” mentality led it within a few short years to a second- and then third-tier spot in the business. Other companies followed the same path. Motorola once held the largest share of the cell phone market with its popular Razr phone; then slipped into obscurity after its “we’ll stick to this model” formula left it out of touch with increasingly savvy younger customers. And IBM’s story is legend: From global pacesetter to near-bankruptcy in one generation, the stories of how “the IBM way” tried to rewrite its customers’ businesses rather than support them are basic reading for how not to run a corporation in the modern economy.

One might think that with such clear examples over the last century that modern businesses would clearly understand and avoid the Failure Mindset. Wouldn’t a constant policy of  innovation and customer responsiveness be the standard, not the exception, in the 21st century? Obviously not, especially in legacy industries like booksellers and real estate brokers.

Barnes and Noble is a case in point for the Failure Mindset. A simple anecdote explains it all. Yesterday I ventured into the bricks-and-mortar of the local B&N for the last time. Not just because I am a proficient consumer who does more than 50% of his shopping online already. But because the experience of the Failure Mindset was so pervasive that B&N might not even earn my online business in the future, either.

Browsing the bookstore on a chilly winter Sunday afternoon isn’t shopping; it’s a pass-time that used to involve sipping coffee while getting started on your new book. Except that I couldn’t find the book I wanted, because I had forgotten the author’s name. It was then that I encountered the Failure Mindset.

I expected to find no employees on the floor – razor-thin margins limiting staff these days. What I didn’t expect was a complete obliviousness to the modern consumer: There wasn’t a single computer anywhere I could use to search for the book I wished to purchase.

There were two computers on each floor, but both were unattended by staff. As a Gen X’er, I attempted to access them anyway, but they were blocked by passwords. After looking around in frustration for another machine, I got into the checkout line. When my turn came, I asked if there was a computer somewhere I could use to search whether my desired book was in stock and where it might be located.

That’s where I experienced the Failure Mindset full force. I was told that there were no computers for customers to use. I had to tell the staff what I was looking for and they could look it up for me. When I replied that there were no staff to ask on the floor, I was smugly told that I was talking to one now. When I noted that it seemed silly in this day and age not to have a computer for customers to use on their own, I was informed that it wasn’t “how we do it” at Barnes and Noble. So either tell the clerk what to search for me, or move out of the way for the next customer.

What made the Failure Mindset even more amazing was that – as I walked away, having refused to comply with the smugly unfriendly process – there was a Nook kiosk off to the left of the registers. The Nook is an e-book reader that lets consumers search and purchase electronic books and magazines anywhere using wireless technology. It’s so advanced that it’s better than the convenience of purchasing online. Instead of visiting the physical store or logging onto the internet from your home computer, consumers can search and purchase from anywhere with unlimited 3G cellular internet access. It’s the next generation of book consumption, powered by a friendly interface.

The Nook is not smug. And it’s not mired in “the way we have always done it.” The Nook is an example of the Success Mindset. And it was right there in the middle of the Barnes and Noble store.

Now I’ll admit that I didn’t purchase a Nook at that moment; I was too frustrated to think about giving Barnes and Noble any of my money. Yet I left the store wondering how it’s possible for a company to be so smart and dumb at the same time? There wasn’t a computer for customers to use – in this day and age? I had to tell a staff person what to search for me – like I was incapable of doing it myself? I had to wait in the checkout line – without anything to checkout – in order to talk to a cashier whose mindset was do it our way or move out of line?

Of course, this made me think of my own industry. Failure Mindset still occurs when consumers try to navigate the brokerage business – online or offline. We still have real estate websites that make customers register before letting they can search for homes. Agents smugly throw away online leads from customers who are “just looking for information.” Either make an appointment or contact me later when you’re ready. It’s still common practice to hold a bricks-and-mortar open houses on Sunday afternoons, a time totally inconvenient to busy Gen X and Gen Y consumers. Because we’ve always done it that way.

And then I heard a beep, as my smartphone alerted me to a new message on my Facebook page. It struck me that I could ask my friends for the name of the author of my book – and they’d readily, quickly and pleasantly reply – plus refer me to other books I might enjoy. I could have searched for my book’s author using the smartphone’s browser. I could even have ordered it – from Barnes & Noble’s online competitor who didn’t even have bricks-and-mortar stores or an eye-rolling staff member. It was encouraging to think that some companies had learned the lessons of the Failure Mindset, and were actively pursuing the opposite.

It seemed paradoxical that Barnes and Noble would have such a poorly engineered in person experience for customers, within sight of it’s modern, wireless, customer-driven always-ready-to-search-and-serve product. If I do order an e-book reader in the future, I’ll probably order it from online. After checking with my friends in my social network for feedback. And probably from a website with friend chat-based customer service if I have any questions.

E-readers could finally close the doors of every remaining brick-and-mortar bookstore forever. They are products built from a strategy that listens to customer feedback and designs an innovative experience geared to the way the customer wants it to happen, not the other way around. They are even better than internet ordering, because you don’t have to wait for delivery. Some people lament that e-readers will eliminate an entire industry of traditional book sales – including the experience of browsing the aisles and touching the books.

From what I experienced of the Barnes and Noble Failure Mindset, perhaps they should.

Imagine if automobile manufacturers did what technology vendors did every so often: Changed around the reliable basics. Your new car might have the steering wheel on the right, where your current one was on the left. The brake goes from a foot pedal to a hand crank. And just where the heck did they put the horn now? Oh, under the seat. Right next to your Windows button and your Facebook news feed…

Somebody please tell companies to cut it out!

Consumers love predictability. Consistency is the promise of branding. Great companies build reputations around establishing and fulfilling a set of expectations for consumers. And while they “upgrade” their features from time to time – like new LCD televisions at the Ritz Carlton or a GPS in your new Acura – these modifications never get in the way of the expected (and valued) methods by which their customers enjoy their products or services.

This is the mistake that companies like Facebook make when they suddenly change their user interface. When their members log in one morning to find significant differences in how they use the system, it causes distress. It’s fairly certain that thousands, perhaps millions of users will express their displeasure in their status box when it happens.  And this cannot possibly be good for the Facebook brand.

Even if its members will eventually get over it.

There’s a big difference between upgrading how consumers access a product or service and how they consume it. For example, when Hertz put its rental system online, it made it possible for its customers to access their cars in new ways. But the changes had no impact on how the customer actually used the car. The online system sent their reservation by email, but when the consumer arrived at the airport, everything else stayed the same. Take the bus, look up your name on the board, go directly to the car, get in and drive away. The innovations to the reservation process had no effect on the use of the rental service; and possibly it made it even better.

Ironically, Facebook’s recent face lift did the exact opposite. Users didn’t wake up to find newer or better access to the system – such as a much-needed upgrade to the Blackberry Facebook app or the ability to access Facebook from their cable television network. Instead, they found everything moved around, hidden under new menus, flipped from bottom to top, and generally discombobulated. Millions of users didn’t use the system, but instead had to waste time posting “how do I now do this or that,” to their friends. Even a few days later, users are still asking how to do things, where to find content, how old features work anew, and even when some are going to get the new interface, because the change didn’t happen to everyone.

Just the unlucky members.

Of course, it’s not just Facebook that makes these big “reset” mistakes with its customers. They are just the most recent ones to do it, and on the scale of hundreds of millions of people at once. But it’s a lesson for all companies not to disorient your customers in the process of improving your products or services. Innovation should enhance the experience. It should build upon what a consumer already knows, but also not disorient them. Asking customers to relearn their computer, television or automobile dashboard cause anxiety and dissatisfaction. An extreme example is relearning cell phone menus: it’s why so many customers stick to older models, rather than reset their hard-won mastery. Customers just don’t like having to fight with their products, even if they eventually conquer them. So while Facebook’s members will quickly get over the new changes, their sense of frustration will linger on, as a fear of the “next time’ it will happen.

That’s no way to create confidence in a brand.

Even service industries without hard-wired products, like real estate brokers, appraisers or mortgage bankers need to bear this in mind. When the rules change radically, it causes deep confusion and lingering frustration in the minds of consumers. Innovation – whether moving from the phone to email or from printed documents to a paperless transaction – can cause consumers to hesitate to engage in the future. It can be worse if there is little help for the consumer when they get stuck – such as wondering why an email remains  unanswered when they reach their agent. It can be a nightmare when the innovation leaves customers bewildered about what is exactly going on with their information or account. Facebook is free, so it didn’t provide support other than some online screenshots.

When customers are paying hundreds or thousands of dollars for service, innovations must increase the value, not cloud it.

This year there will be hundreds of innovations in the real estate industry. Some will be in technology, others will be in service. They will all aim at improving how the business is done – for companies and for consumers. Brokers will upgrade their web sites, move agents from cell phones to smartphones and transition large parts of the transaction online. Bankers will create new loan procedures and documentation. And the government keeps changing the rules every day. It’s enough to cause consumers to give up – and shut down.

It could send consumers back to the sidelines rather than into the market.

While real estate sales has never really followed a consistent set of rules from agent to agent, office to office, major systems over which the consumer has little control, but affect their personal deal have set some expectations. Facebook isn’t the only site to move things around and confuse customers. REALTOR.COM does it just about every time.  MLS systems are certain to do it, too, with rules that expand or prohibit or simply rearrange how photos or text or videos are used. Sometimes it will work for the better; other times it will not.

Hopefully before any of it is done, the industry and the programming geeks will ask an important question:

Are we about to press the Facebook reset button?

On Screen: Real Estate Industry news launch for February 9, 2010:

• The Wall Street Journal reports that Fannie and Freddie have already consumed more than $111 billion in taxpayer dollars. And they are likely to need more.
• A real estate bubble in Canada looks like it’s already inflated and expanding. Some markets are experiencing surges of 20% month-over-month, and it shows no signs of stopping.
• NAR Economist Lawrence Yun finally acknowledges that the tax credits are causing housing data to skew wildly every month in the latest release of pending sales figures from the National Association of REALTORS.

On Screen: Expert Advice from Industry Leaders:

• Steve Harney reminds REALTORS that the housing “recovery” is shaky in “Built on Jenga Blocks.”
• Stephen Fells offers ideas on how REALTORS can keep an eye on what the social sphere is saying about their business in “Why Every REALTOR Should Use Google Alerts.”
• Ron Hahn offers thoughts on how branding differentiation works in the real estate industry in “Interesting Branding Insights: Real Estate Companies Pay Attention!”

On Screen: Technology Trends (with Comments)

• Cisco says there will be more than 5 billion personal devices connected to wireless mobile networks. (Important trend considering under 50% of REALTORS reported using a smartphone last year).
• Comscore research shows that more than 178 million US citizens watched more than 33.2 billion videos in December 2009. (Amazing considering so few property listings have videos on them.)
• Nielsen research says that use of social networking online soared more than 82% last year over the year before. (Yet less than 35% of REALTORS had a social networking presence in 2009)

On Screen: Smart Ideas to Sell More

• Entrepreneurs should beware “vanity metrics” when measuring true performance, says the Harvard Business Review.
• Timeless ideas on innovation from Peter Drucker at Human Resources IQ’s website.

On Screen: But Wish it Were Not!

Here’s the MLS photo of the week from “Really Bad MLS Photos” group on Facebook:

As usual, let’s start with the research. Last year, more than 50% of home sales were to first time buyers. The average first time home buyer was 30 years old, and the vast majority are under the age of 44. The move-up seller is also squarely within the 30 and 47 age bracket. From a real estate standpoint, the target buyer and seller for the next few years is essentially Gen X and Gen Y. With less than 19% of sales happening with consumers over the age of 55, let’s just say the 401k-home-equity-drained-downsizer is not going anywhere for quite some time.

Now let’s assume an operational premise: Successful real estate sales requires brokers to sell real estate the way buyers want to buy, not the way they (or sellers) want to sell. Of course, we know this lesson goes largely unlearnt in the industry, as the proliferation of newspaper and postcard marketing are two of the three pillars of failure for most brokerages (constant recruiting being the third). But for the sake of argument – and hope for the future – let’s assume that someday soon this lesson will be understood and brokers will sit down and ask themselves:

How does my customer use the internet?

Not, how do I want to market homes to customers? If we leave it to brokers, we know exactly how they want to market homes – even online. We don’t even need to mention them here – but a fruitless search through REALTOR.COM should prove the point. And when it comes to social media, the case becomes worse, not better. Just based upon the number of friends updates I’ve had to “hide” in Facebook lately, it’s clear that many agents have not understood that social media is about relationships, not e-blasts of their overpriced listings or open house dates.

If we think about how the real estate target buyer uses the internet – especially social media – we’ll see that games are vital, not incidental, to our marketing strategy. Playing online video games isn’t just an introvert’s pass-time any more. Farmville has more than 72 million active users. That blows away every real estate website – combined – if you consider these visitors play multiple times a week, and often for 20 minutes or more per visit.

Now would you like to play a game?

There is nothing comparable in online real estate marketing as we know it to game-playing online. Of course, the activities are different: REALTORS are simulating their product catalog online, and game players are entertaining themselves. But the objectives are not dissimilar: REALTORS hope to connect with their sphere of influence via their websites, and game players are already connected to their sphere of influence – and interact with them nearly daily – through the gaming nexus. Social media gaming, in other words, is just another excuse to get together with friends.

Of course, some of those friends may also be clients – past, present or future. It’s no different than the days when we used to play games – like golf or bridge – with our networking buddies, past clients or Association friends. It’s simply moved online – because so has the consumer. Keep in mind that Gen X grew up playing Atari and Nintendo games; and Gen Y doesn’t know fresh air exists. The 20-something buyer literally evolved online, interacting with friends online via XBox and Playstation, while exploring dungeons and foreign planets. Their sphere of influence was largely virtual. And unlike the coffee shop or golf course, it met just as regularly.

Online.

This is why social media game playing is a powerful sales tool. It connects people to people, not people to machines. Gen Y doesn’t want to “search your website” and then wait for someone to return their email (assuming they ever do). They already eschew search engines, preferring to ask their friends what cars to buy, schools to attend – and agents to use – via social networks. They don’t talk on their phones, and they don’t check voice mail. They don’t go out to play – so they won’t be seeing their Baby Boomer laywer or accountant or hairdresser or real estate agent at the local pub or health club.

In fact they won’t see them at all – if those people won’t show up online.

Gaming is about relationships. Competitive “war” games let Gen X’ers pit their mobsters, vampires or poker hand against their peers’. Collaborative games like Fishville, Farmville and Cafe World let Gen Y’ers play nice with the collective. But note that none of these games is played alone. They all involve playing with others.

And that means building and maintaining relationships.

Relationships, which are the heart of successful sales practices. In the past, relationships were built by a traditional sales theory that revolved around an advertising-prospecting-proposal structure. Maybe that sales structure is evolving, along with the modern consumer. Decision making processes in consumption are not what they once were: Gen X’ers don’t believe one word of marketing from anyone, and Gen Y’ers are usually put-off by pushy-scary-closing methods that make up the classic Top Agent Betty Barricuda sales playbook. Even awareness marketing is changing, as fewer people use the newspaper-phonebook-mailbox channels to gather product information, but return to the “town square” model of friendly referrals and family advice.

For Gen X, it’s important to use trusted vendors their peers prefer. For Gen Y, advice from the family, extended but reachable online, is more powerful than any price inducement.

That’s why playing games online matters. It’s a chance for sales professionals to make friends and interact in non-traditional sales environments. They can play winner-loser games with Gen X prospects, and earn their respect through game-play competition. Such respect can later be translated into sales propositions and referrals in the future. Gen Y prospects can become part of your company’s family by participating in collaborative games, egg-hunts and “sims.” They will readily accept new connections from anyone working toward the same goal. Later, when the goal becomes buying or selling a home, they will be primed to trust someone who they have already worked with to reach a (entertainment) goal.

Clearly, playing social media games is time well spent building relationships that are the foundations of future business. There’s no doubt that the next generation of real estate consumers is socialized and prefer to interact through this medium. And it’s not just younger generations of consumers: According to a study done in the last 5 years for AOL Games, “women over the age of 40 play most often and spend the greatest number of hours per week doing so, beating out both adult males and teens of both sexes.” The study also shows that adults are more likely than teenagers to play online games. Maybe that’s why Nintendo’s marketing strategy for the Wii features people of all ages – young to old – playing together.

Now it’s time for the real estate industry to understand that social media can build relationships that turn into business.

And isn’t that the name of the game?

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I get it. Times are tough. It’s a recession, and most businesses are watching every penny. Business spending on marketing and customer service tools has dropped along with the overall economy. Yet the last time I went to my local shoe store or vet’s office, I don’t remember these fancy gadgets – that not only drew my attention, but taught me something useful about their products, and enticed me with up-sell offers.

In the same day, I got a glimpse of two industries that are headed into the future with every intention of remaining competitive. Take, for example, my vet: We actually don’t visit the vet often – maybe a couple of times a year – so certainly not often enough for us to browse their shelves of specialty cat-food, play-toys and pet wellness items. Today, however, one of my cats needed some blood work, so while the vet took her into the other room, we were left waiting in the examination room. Usually, in the past, these were sit-and-stare-at-the-wall moments, waiting for the doctor to return. Not this time, however: There shining bright and inviting on the wall was an LCD screen inviting us to “touch anywhere” to learn more about our pets.

Instantly, we were engaged in the system. The system called Pet HealthNetwork was full of learning content.  Touch here to learn about the breed. Touch there to learn about common health issues. Touch here to learn about products and procedures that can help your pet lead a healthy and long life. And – of course – such ideas could lead to questions about which products and goodies we could pick up on our way out the door, too.

What a clever idea – to put a pet-like-WebMD right on the wall, make it easy to navigate by touch, and get your “customers” involved in your business. In the few minutes it took for the test to occur, we had look at two short articles, a video and a checklist. We even emailed ourselves a copy and a link to the video so we could play it again back home. When the vet walked back in the room with our cat, my Blackberry had just beeped indicating our email had arrived with our requested information.

Later in the day, I was running some errands before heading on the road for another three-city tour of seminars and leads-management workshops this week. After such a busy fall schedule, I really needed a new pair of shoes, so I decided to try the local Main Street shoe-shop, rather than brave the mall on a pre-holiday weekend. I didn’t really expect much for selection or price, but not only was I pleasantly surprised on both, I was again amazed at another small-time-shop using technology to work with customers.

This time, it was a computer kiosk brimming with information about shoes. Not usually exciting stuff, you’d think, but the technology was full ofsurprised. Rather than focus on the inventory of shoes – like sizes, styles, colors, heels and straps – it focused on the experiences of wearing and enjoying life with shoes. You could look at activities and hobbies – and get a perspective on which shoes would support that activity. Or you could look up any feet troubles you may have – aches and pains or walking disorders – and learn how different aspects of shoes could improve or support proper foot function.

Again, a combination of text, diagrams, pictures and videos explained the issues and options that customers might be experiencing. Powered by a system called iStep, the overall experience focused on helping the customer reach hist goals as a foot-wearer, not just advertising the particular shoes the store had on sale. In fact,  I could actually step on a pad and the system would analyze my feet to tell me about my particular foot-features, and options for maximum footwear results!

In both cases, technology made it possible for customers to learn more about their options while the service personnel was busy. It let the consumer tailor their experience and find information they were interested in – and learn about related issues they might not have known. It used friendly touch-screen simplicity and sent home copies of requested information without a single printout or flyers.

In-store kiosks aren’t new technology. Bookstores have been using them for years, to make finding books faster – and self-serve. Even ATM machines are a kind of kiosk, displaying searchable information like balances and offering information on ancillary products like mortgages based upon the banking profile of the person using the machine.

You have to admit it’s new to see such things at veterinarian offices and shoe stores. Not to mention touch-screen, multi-media approaches. We’re talking about service locations where it was typically necessary for someone else to be involved in providing customers with information and recommendations.

Where the doctor or shoes salesman were in control.

In the  traditional model of vendor-to-consumer  information transfer and knowledge-to-decision consumption, the customer experience depended totally upon the particular person they encountered. If you got the good vet, you got great information and service. If you got the unhappy shoe-salesman, you got basic shoe-box delivery and a blank stare as you figured out if the shoe was on the right foot.

The process could be awesome or awful, and totally out of the control of the consumer.

This approach left consumers very much out of control – for either information or decision-helping knowledge. And for Gen X and Gen Y real consumers, it’s just not an option to be uninvolved in the process. Ironically, all it took was the introduction of a little technology – at the point of purchase – to make such a significant change. And engage the modern consumer.

Of course, there’s a parallel to the real estate industry here, and it’s fairly obvious. Look in the typical brokerage office’s reception area: Are consumers asked to wait – are they asked to get engaged? Can they browse your inventory, company information and ancillary services while they wait? Do they view your office as somewhere to go to learn about the market or access trustworthy educational content during their “exploratory” phase in real estate? If an agent leaves consumers in the conference room, are they consumers left to stare at the wall, or a dusty pamphlet, because your network geek is paranoid about offering unsecured internet access to visitors to your office? What if a consumer strolls by your window: Must they decipher printouts or are they stunned by a LED electronic experience  in the window?

Go one step further – to the hundreds of other real estate sales locations your company has. Oh, yes, you actually have hundreds of offices throughout your marketplace, didn’t you know? Every car of every agent, and every home they show is a place where a portable kiosk could make a difference. They’re called laptops – but just how many of your agents actually take them along for the ride?

And let’s not forget our favorite sales-failure location: open houses. Strategically placing two or three laptops throughout the house, with additional photos, videos, maps, and reports would make it possible for browsing buyers to get involved, and get excited about the home – even if the agent is still cowering with the cookies in the kitchen.

As it turns out, the vet called later to say the cat’s tests were fine. I watched the kiosk video again, and bookmarked their site in case I have other questions later. My new shoes fit nicely, and after filling out the customer service survey online, I received an instant coupon by email for a discount on shoe polish or water-proofing. What an efficient way to up-sell a recent customer; and it all started with the kiosk.

Yet I wonder what I’m going to see when I visit my neighbor’s open house tomorrow.

The house down the street just went on the market, with a local Main Street real estate shop. What do you think I’m going to see when I enter the $1.2 million dollar property’s sales event? Will there be a laptop glowing on the counter? Or do you think I’m going to be asked to sign in on a photocopied sheet and encouraged to take a copy with me of the – ugh – pathetically-printed listing sheet?

Download a copy of the latest survey of REALTORS by the Center for REALTOR Technology and you’re certain to be fascinated – startled, perhaps – at what’s happening on the Bat-belts of modern agents trying to make buying and selling homes a twenty-first century experience. While the report is no page-turner – in fact, it looks a bit like it was produced on a Commodore 64 with dot-matrix fonts – a few facts stand out, highlighting just how easy it should be for serious salespeople to scoop up market share in the months to come. And all they really need would be a Blackberry and a thousand bucks.

Speaking of Blackberry, while a whopping 32% said they used one as their primary mobile phone, the report barely breaks 50% of REALTORS using any smartphone, even including Palm or iPhone devices. So that means consumers have a 50/50 shot of their agent having mobile access to email, MLS data or social networking. I wonder just how many Gen Y buyers can do that kind of stuff? But I digress…

Of course, who needs a smartphone when the top three methods for keeping in contact with past clients was (in ranking order) email, phone calls and postal mail. Surely you can always boot up your Windows 95 machine and log on to AOL to send that email, and crank out some ALL CAPS LABELS to send your holiday cards, right? No hope for active clients, either: same tools in the same order. A quarter ranked social networking for “business purposes” while an equal 25% were “not sure” what they were supposed to do with it – joining the 16% who didn’t use it at all. Now, where did I put my envelope sealer? Damned paper cut again….

No surprise, then, when you get to page 10 and learn that 54% of the respondents did only 1-10 deals in the previous year. Too bad the survey didn’t break that down to further, because I’m betting a lot closer to 1 than to 10.

Ironically, 73% of respondents said they used the internet to shop online for both business and personal reasons; yet a third of them had never used YouTube. Almost six in ten did not download podcasts; iTunes, YouTube, it’s all for kids… And one in five never sent text messages either. Well, it’s hard on their Ernestine-era bag-phones, right?

For those REALTORS trying to avoid the government’s 1-penny per email message fees (didn’t you get that email, too?), their strategy of hiding behind  tin-can-era systems seems to be working. About 1 in 3 REALTORS were using some form of free web-mail, like Yahoo or Google, while 14% were still using Outlook Express (stop giggling) and some 6% were keeping AOL on life support. The rest were making a few blips on the flat-liners like Earthlink, Comcast or AT&T mail. Only a third of REALTORS were using Outlook – and the survey didn’t mention if that was downloaded or on corporate Exchange servers. Still, two out of three messages potentially related to the largest financial transaction a consumer can make is likely to be transacted on a public, un-accountable, can’t-reach-tech-support and is-it-really-confidential email system. No worries there.

In the “you don’t say” category, 33% of respondents ranked their MLS system’s value as “neutral to poor.” That’s an amazing number for something someone pays for monthly; of course, most MLS systems are monopolies, so it’s not like the local REALTOR really has any choice. Agents usually have little choice but to pay for data locked into one vendor platform; even if they pay twice to use third-party software, that doesn’t rebate their MLS fees. Even gerrymandering the Association lines with “board of choice” didn’t offer relief: too many MLS systems are statewide. Still,  the MLS industry’s  1 in 3 customer unhappy-ranking is higher than a car salesman, right?

Deeper data on social networking usage shows some optimism: About half of respondents said they used Facebook daily-to-weekly; 25% said the same for LinkedIn. About 6 in 10 REALTORS did not have a Twitter account – about the same that didn’t have a mobile smartphone, so that makes sense, since most tweets are mobile and only 62% of REALTORS sent regular text messages on their phone. And less than 1 in 5 used ActiveRain daily or weekly.

More than half of REALTORS said they used social networking to communicate with other REALTORS, but only 7% to communicate with family and friends. Good news, at least, came from data showing 73% of social networking efforts were toward consumers. That’s good, because most REALTORS also indicated that the “very important” sources of their business were repeat clients and referrals – nearly 30 points higher than plain-old “internet” advertising. Pretty cool.

Somewhere amongst the bank transfers from Nigeria, it seems that 1 in 4 REALTORS didn’t get the memo that making consumers register for listing information isn’t a good idea. It’s likely they made up a higher proportion of the 73% of REALTORS who said they were not satisfied with the number of leads their website generated. And said they didn’t receive “enough” email from their former clients. Connections, anyone?

Amongst the weirder questions asked by the survey was, “If you use mapping on your MLS, which elements do you find useful?” Huh? Shouldn’t this be asked of consumers? Who really cares if 13% of REALTORS use maps to find places of worship or 23% used a map to find house numbers (???). Of course, the 71% who said they used mapping to create driving directions does make a little sense – considering they didn’t have a fancy-schmancy smartphone with GPS to help them get there. Now I get it….

In the end, it always comes down to money, so let’s run the numbers. Looks like 49% of REALTORS spent $1-100 per month on productivity technology. About 11% spent $250 or more per month on technology. About 52% of agents spent less than $500 annually on their websites, with 11% spending nothing (yes, zero was a choice). 5% of agents spent more than $2000, and 7% of brokers spent more than $5,000.

At least there seems to be a trend: half of agents do less than ten deals annually, don’t have a smartphone and don’t invest that “savings” into their websites. The only question the survey doesn’t answer is: the chicken or the egg?

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Social bookmarking refers to the dozens (hundreds?) of little icons that you now see at the bottom of every news article, blog entry and video clip that enable you to “share” something you’ve found online with entire social networks. Systems like Digg, Reddit and StumbleIt are the modern evolution of the “Send a link…” function that Web 1′ers used to rely on to email their entire address book with their latest finds online. With social bookmarking, though, you can recommend your findings to both your personal network – and the greater social sphere – at the same time.

Social Bookmark networks can be powerful promotional tools for any business. Initially, they started as a way to save your personal web favorites online, so you could access them from anywhere, not just the specific browser on your personal computer. As people became more comfortable with the concept, these networks added features to “suggest” and share your bookmarks with others. Soon, the systems we’re familiar with today were born – where people are sharing, recommending – and promoting – others’ web content with  millions of clicks a day.

Unlike the old days, however, social bookmarking doesn’t use email as its communication tool; instead, bookmarks  appear each network’s front page in a never-ending stream of members’ suggestions. In addition, members can “vote” on recommended links, to keep sites ranked higher, plus add their own comments, creating social networking around social bookmarking. While it may lack the “personal stream” you’re used to seeing about your friends in Facebook, social bookmark sites like Digg offer far greater variety of content and information because the suggestions come from a global membership. And while Twitter may be slightly more torrential in update speed, social bookmarks go beyond mere snippets to catch your attention, sharing the full titles and descriptions (plus user comments and ranking) on each site, article or video clip.

All of which presents tremendous opportunities for marketing your company, inventory, services and sales team to a massive audience every day. While many of us have added the obligatory “Share on Facebook” features to our blogs, and maybe even our inventory, adding options for many of the top social bookmarking networks can do wonders for driving visitors. Both direct web traffic and enhanced search engine optimization – as your content appears linked from more and more credible web sites – can boost your ability to reach new customers and generate public relations. And did we mention, it’s all pretty much free?

Reddit as 4th largest source of our traffic, beating Google, Q1&Q2

To maximize the social bookmark networks, companies should rely upon passive and purposeful strategies for hitting the lists daily. Customers and casual readers of your blog will likely create some passive traffic for you, as interesting content causes them to share your site with their preferred network. However, most users will likely take only the time to suggest your content to one social bookmarking site – their favorite. That’s why a purposeful strategy to have your marketing department – and perhaps a few staff members and agents – suggest key content to multiple sites every day can help increase your results. As more people suggest the same site to these networks, they rank higher and have a better chance of reaching the first page. And first page ranked links create avalanches of visitors from the vast membership fo the social bookmark sites.

While it will be tough to compete for top spots with the “suggestion traffic” that sites like the Wall Street Journal or ESPN will naturally receive, companies should still try to mobilize their internal and external social networks to recommend their blog, inventory and press-release content to the social bookmark sites. Even a company with 10 people can create inroads if everyone consistently makes the coordinated suggestions to the same sites. Considering the opportunity for free web traffic without increasing your marketing costs, social bookmarking can pay off for the few seconds each day it takes to make the effort.

Blogging is both art and tax. Good blogging means turning a steady flow of useful ideas into interesting content. Bloggers must be good writers. And developing a readership takes a lot of time each day and week. So it’s not unusual for busy salespeople to worry that they’ll never really leverage the medium, tending instead to go for quick contributions in their Facebook updates. Yet there is opportunity in between the blog and the burst, providing ample opportunity to show off your knowledge, influence your contacts and develop new business. It’s called LinkedIn Answers, and it may just be the answer you need.

LinkedIn’s Answer forums provide an alternative to creating, maintaining and distributing a blog, while still accomplishing the tasks of social networking and idea exchange that can grow your online presence. The online forum contains literally thousands of questions and answers from the social network’s members, each one a potential opportunity for real estate professionals to show off their smarts and demonstrate their willingness to help consumers.  And the format has certain advantages over blogging, including instant distribution, no technology requirement and a steady stream of issues to address – that already interest your potential consumers who are asking the questions.

A quick visit to the LinkedIn Answer area is all it takes to see how easily agents and brokers can leverage the forum to build their sphere of influence. LinkedIn starts by presenting you questions from people within your immediate connection network. Even if you don’t answer any of the questions, it’s an excellent research tool to see what’s on the mind of your contacts, in dozens of categories both personal and professional. You can drill down into specific areas which interest you and in which you have expertise. Beyond the obvious choices like “Personal Real Estate” the possibilities to be helpful seem endless.

Answering questions is far simpler than blogging, because it’s just a “fill in the box” approach. No graphics or text formatting. Just focus on the question and write a direct answer. No opening paragraphs or closing statements needed. It’s not article writing, so it’s fast. Likewise, you can answer the main question, then clarify or add more ideas later, if others also answer and a conversation develops.

Contacts who ask the questions can also “rate” your Answer. This creates the opportunity to be a “top rated” specialist in different categories, which can lead to new contacts as others see you listed as a subject matter expert. Even if you don’t make the top rated lists, though, you’re likely to make a new contact at least half of the time, since many people like to just read the exchanges, then reach out and connect with some of the participants whose ideas interest or intrigue them.

With each answer you post, you can also suggest web links to helpful resources. Adding links back to your personal or company website maximizes each answer’s opportunity to generate traffic back to your inventory and services, without paying for search engine clicks. Answers are also stored in the system permanently (at least so far) which lets you maximize each response to influence others, especially new users who enter the social network each day.

Answering others’ questions is the easiest way to meet new contacts and grow your business, but posing questions can also provide a wealth of business opportunity. Asking questions encourages your contacts to interact with you on issues that directly affect your business. You can gauge their sense of the market, address hot topics and become a resource to your network. Posing questions also provides “contextual” information about your contacts values, perspectives and desires on certain topics, in a way that a basic poll or survey does not allow. A strategic series of questions can help you discover the answer to the question, “What does my customer value?” which you can use to create competitive advantages by tailoring your services.

For many agents and brokers, blogging may be just beyond their desire to develop. Social networks like LinkedIn provide powerful alternatives to engage consumers and expand your sphere of influence using essentially the same “idea exchange” techniques as a blog. Incorpoating the LinkedIn Answers forums into your weekly social networking activities should become a powerful part of your prospecting plan, to leverage your experiece and expand your social influence online.

For some time now, I’ve been asking myself if I’d missed the point about Twitter. Give it some time, I told myself. Sometimes these new technologies just need to shake themselves out. Originally, Motorola  shelved the mouse as an input device, only to have someone dust it off years later and make it the tool of choice for personal computers. So I gave Twitter a chance. I tried it myself, and even started to “follow” some people online. Alas, with the release of a new study, I now know  that I should have stuck with my initial reaction. Twitter is really dumb.

According to a short-term study by Pear Analytics, found on the Marketing Vox’s website, only 8.7% of Tweets have value to most people, which they defined as containing “news of interest” to followers. In fact, after studying more than 2000 Tweets, and following their message, links or content, more than 40% of the messages were ranked as “pointless babble.” Large chunks of the rest of the Tweetosphere were filled with self-promotion, shameless traffic generation and superfluous “navel-gazing.”

What did we expect, War and Peace?

My high school English teacher would have said he’d seen Twitter in use for his entire career, capturing and reading out loud our endless stream of secretly-passed-notes. Our back-of-the-class whispering he used to call “diarrhea of the mouth,” an ugly if not accurate description of the incessant hissing that we mindless teenagers felt we needed to emit in real time. Twitter simply updated that constant mind-dump and made it possible for billions of people to learn instantly one very important fact:

Most of the time, people really have nothing interesting to say.

Is there  a lesson here for business people barely hanging on to their livelihoods these days? Yes, indeed, and it’s one that we could have learned fifty years ago. Peter Drucker, the guru who virtually invented modern management made the critical insight that should have buried Twitter the day it hit the web:

Effective executives must be in control of their time.

That’s why Twitter is detrimental to productivity. It has little to show for itself in terms of  ”return on investment” with customers, compared to email communications, or even the oldest-school technologies, like the telephone. Everything about Twitter is anti-time: Sending a tweet may only take seconds to send, but the urge to then follow who is reading your outburst, re-sending it to their network, responding to it, and so on, is a tremendous waste of time that could otherwise be spent directly with customers. Monitoring Tweetdeck or other sites that report what other people are posting about you in real time is only slightly more exciting that watching grass grow; and mostly less productive.

Unless, of course, you’re just trying to burnish your ego.

Sending Tweets also destroys your precious moments of well-invested time, too. Time Wasting Tweets are frequently sent when you’re supposed to be paying attention to something important, such as sitting in a training class (like whispering in seventh grade English class). You’re supposed to be investing your time into something valuable. Instead, you are goofing off.

And don’t say you were multi-tasking, because that’s just mumbo-jumbo. You are either listening and thinking, or twittering. You can’t be doing both. That’s why Tweeters often ask the same question that was just asked by someone else in class a few minutes ago – wasting MORE of the time for rest of the class and instructor.

Wow – what a great technology.

The real problem with Twitter isn’t that it’s a dumb technology. Nor that it’s redundant, since Instant Messages, text messages and updating your Facebook status works just as well, perhaps better because it’s targeted to people who might, possibly, slightly care. No, the Twitter danger lies in the fact that it’s “online” and as such, instantly gets the “seal of approval” from those of us who equate “online” with “better” or even just “good.”

Or cool.

Lots of stuff is online. Does that make it all good? That depends upon how many times you’ve replied with your bank account number to your good-friends the Nigerians who wish to share their millions. There’s a whole “shadow” internet out there of complete, utter dumbness. It offers far more discount Viagra than we could ever consume, an unlimited number of ways to grow rich right from our kitchen tables, and shed pounds with the super-fruit of the month. Even pseudo-silly sites, like YouTube, where millions stare mindlessly for hours at the banal antics of cats, clowns and claymation makes you wonder who has so much time to just sit, watch, comment, watch, refute, and repeat?

Doesn’t anyone actually work?

But it’s online! So we be doing it! Our kids are doing it – doesn’t that mean we have to do it just to “keep up” with them? Companies are doing it – there was a story about someone the other day who Tweeted something and they sold some stuff for some money – so doesn’t that mean I gotta do it too? Thus the cycle of nonsense was started, is recycled and now perpetuates itself 140 characters at a time. With an occasional cropped-hyperlink thrown in to reference a bit of real news or information.

I’ve always suspected that Twitter was a plot by a super smart social scientist who wanted to study whether he could get millions of people to do something online that had virtually no redeeming value. Apparently, it’s not that hard; and the vast amount of data will certainly yield decades of studies on various psychoses of boredom, self-centeredness, quest for celebrity and general emptyheadedness.

Maybe that’s a little harsh. Maybe not. But one things for certain: Anything with a 92% “valueless” estimation by its own participants is probably something that those of us with limited time – and bank accounts – might want to reconsider.

Wait! What’s that I see? Something shiny…. ooooh…. .wow…..

Perhaps Pavlov was right?

Readers of our column know that we called the beginning of the end of search engines some time ago, when we noted that Facebook and MySpace had already started to generate more ad views and targeted traffic than Yahoo and Google. Unfortunately, Microsoft didn’t seem to have read our post, and went ahead with Bing. Microsoft calls it a “decision engine” and it certainly works differently than the traditional search sites. Yet technology improvements aside, none of the  search engine players have considered the basic question: Do people really “search” for things on the internet any more?

When the internet came out, nobody could find anything on their own. Most website traffic came from somebody writing a magazine article about them. Readers would then punch in the URLs manually in a crude browser. Then Yahoo and Google came along, and started the  ”yellow pagination” of the web. On  early versions of Yahoo, the better content was found by drilling down in the categories, click by click, until you found the right list of sites. Google’s approach was different, with it’s empty-box approach, capable of responding to your questions. The trouble is, if you’re looking for something, you usually have empty-brain, as well. Getting Google’s box to give you the right results is still mostly a guessing game, even today.

Then came the monetization of these databases. Advertising penetrated the search world. Search results have become, well, somewhat polluted. Even the most direct searches are  surrounded by “competing” websites from paid advertisers. And that’s not to mention the silliness of a million search results for any search topic.

Yes, it essentially works. But will it in the future?

Think about your last visit on the web, even how you got to this article. I’m willing to bet it didn’t involve a “search” event. For example, when I fired up the browser to write this entry, I went directly to my blog’s administration page. I used a bookmark, not a search. While I’m writing this, I also have other sites open – Facebook, the Wall Street Journal and my company website. I didn’t search for those pages either; I typed them directly or used my links-bar to launch them.

In fact, most of the time, this is how I use the internet. Not searching for stuff, but going to places where I already know I’m likely to find answers.

If I need to travel, I go directly to one of the major travel sites, like Travelocity or Priceline. To order a book, I type in “bn.com” for Barnes and Noble. If I’m thinking of a new laptop, I punch up “lenovo.com” or “dell.com” or maybe “cnet.com” to look at some reviews. I don’t perform a search for any of these things on a search engine. Mostly because I know the results will be useless. And any sites on page one will be companies I already know.

Why waste my time searching?

Interestingly, within my favorite  sites, I conduct all sorts of  searches. I search for flights and hotels on the travel site; comptuer reviews and comparisons on the computer sites; and books and music on the bookseller sites. So I do search for things; I just don’t use the search portals.

The same is true for real estate.

Do we really think people go to Google and Yahoo and type in “real estate, AnyTown, USA” these days? Doesn’t the Average Internet Joe know that places like REALTOR.COM, Zillow and Trulia exist? Hasn’t he just seen a television ad or even – gasp!- a newspaper ad for his leading local real estate company or its parent national brand?

The average consumer – if they are anything like average me – searches for real estate on sites he already has bookmarked. He already has his “go to” sites for almost every major commodity. He understands the web, and now uses it to patronize the companies he already knows. For most consumers, the “search and find” excitement has worn off the web.

If I’m looking for vacation ideas or hotel suggestions, I am just as  likely to search reviews on the Wall Street Journal website as I would go to the travel portals. Both are already “bookmarked in my head.” I am least likely to go to a search engine and type in “hotels in Las Vegas” or “fine dining in Rome” because I know I’m going to get 1 bazillion useless results. The front page will be dominated by the biggest paying players – and  I am already familiar with them. So why did I need to search?

If there are any “hidden” treasures hidden on the web, the search engines aren’t going to help me find them because they are probably too small to compete for prime spaces. The best real estate company in a local town still probably can’t outrank the major sites – and the search engine noise – that a typical search will likely return. The first few pages are dominated by the same companies that dominate my common knowledge for any product. Search has just become a waste of time.

The exception is for super-targeted information. A particular phone number. A street address of a company I know, but just need to locate on a map. A news story that I wish to find more information about. Even these searches, however, are becoming useless, when top spots are taken up by “related” results like a dumb YouTube video parody of the news story I’m looking for.

Search has become “ugh” more than “wow!”

Finally, let’s not forget that nowadays, I’m more likely to ask my friends in my social network for suggestions on products and services, like what book to read, where to vacation and a referral to a good REALTOR. Not a machine – but a real person. I think people prefer hearing ideas from other people, not HAL.

Now, if any of my experience is even partially the same for others, we could arrive at some very interesting consequences for the real estate industry, such as:

1. Real estate brokers can shift considerable marketing dollars away from search engines and into other marketing activities. The pursuit of pay-per-clicks and the tyranny of the “unguessable” keyword game will finally end. Brokers can shift resources into activities that generate “persistent” brand recognition in their target customers’ minds, using customer relationship management campaignsrather than trying to  ”guess the keywords” to trigger an ad.
2. Agents should give it up when it comes to search engine advertising. At least anything paid, like keywords or ads. It’s all cool and fine if your blog or Facebook page help you rank higher for certain searches; but remember, it still depends upon consumers to search in the first place.
3. Making and maintaing friends on social networks is likely to outpace search engines as a source of future traffic, especially amongst a broker’s sphere of influence. That’s good news, considering most social networking is free, and costs for effective search engine page domination continue to skyrocket.
4. Start looking for the next consumer awareness channel. If searching is declining – perhaps fastest amongst Gen X and Gen Y who are masters of the web – then find the next medium that will reach future customers. Maybe it will be social networks, maybe not, if  consumers quite  social networkingsites en-masse once they become more commericialized. Check out mobile marketing. Consumers won’t use smartphones to search. They keys are just too small. But they will be connected to trusted partners – through applications, widgets and feeds.

Except for the last item above, which could end up like all predictions, real estate professionals should already be able to measure their search engine effectiveness. Web traffic reports might possible be reflecting this shift already – especially if companies have cut back on their pay-per-click budgets during the recession.

Of course, most of us could just monitor our own internet usage for a couple of weeks. How many times do you use the internet effectively without conducting a search? It’s a matter of internet maturity: As we have become more comfortable with the tools, and have demystified the web, we have started to memorize the areas that are most important to us. We find ourselves going on directed and targeted journeys on  the web; more in control and less at the mercy of 1,985, 434 suggested search results.

It has happened before. It’s just like memorizing your favorite television channels. When we first got 500 channels of cable, we were excited to endlessly flip through the onscreen guide. Now most of us  are familiar with the system – and because our time is limited – we click to our favorite channels directly. We record our favorites shows with one click, like downloading a podcast, without searching the guide for the next episode’s time. Our habits change.  We don’t flip through the paper, but turn to our favorite section. We don’t scroll through the dial, but click a preset radio station button.

Now we use the web from bookmarks sites and familiar URLs.

The game of out-guessing the search is over. When nobody picks up the TV Guide at the checkout counter, why advertise in it? The next great challenge for companies won’t be getting a page-one ad spot, but earning a position as one of the “preset buttons.” And not on the computer screen or the control panel, but in the minds of consumers.

It’s time for the real estate industry to implode the MLS model so they can build something better suited to the next generation of real estate practices.

To prove the point, let’s try to list 10 Reasons why MLS systems really must go. Only then can we see that we’re out of fingers on which to count the ways they might survive.

1. They are expensive. It’s absolutely incredible that brokers pay the kinds of fees they do, on a per-member per-month basis, for essentially data warehousing. A Google Mini, which is a kind of server/software system to let you create your own in-house Google database, only costs about $4000 for 100,000 document capacity. Clearly even a few years of local housing data doesn’t reach that capacity level, but double or triple it and it’s obvious the exorbitant fees aren’t for the hardware. If a 5000-person MLS pays $100 per person annually, that’s still $500,000… and we know it’s more than that in most systems. Deduct staff, technicians and programmers, you’re still overpaying for data warehousing. How can Craigslist store so much more data for free to its users?
2. The data integrity is awful. And that’s pushing away consumers. Let’s stop pretending that there’s any policing of MLS data; maybe a few fields are required and a few token fines issued. But one look at any site whose data is fed by an MLS (like REALTOR-dot-we-don’t-care-dot-com) and it’s clear that once you transfer responsibility for data quality from the broker/owner/manager to a MLS staff member, nobody is watching out for the consumer. Seller are horrified to see their property information incomplete online, with “too new for photo” for days, while buyers are duly unimpressed by the quality of data and its arrangement into pathetic “listing sheets.”  Data integrity is actually a barometer of brokerage oversight, which eventually falls to zero with the existence of MLS systems.
3. MLS “organizations” are dominated by No Men. These are the programmers, directors, engineers and others at the “software/hardware” department who essentially say “No” to anything brokers want to do with their own data. No, you can’t use your data in the ways you want. No, we can’t add that field. No, you can’t store more than 20 photos. No, you can’t feed your data by FTP but must type it in manually. No, it doesn’t work on a Mac. No, it won’t work with Internet Explorer (any new version for weeks). No, we won’t program it to look good on a smartphone. No, No, No. We won’t let you ruin our nice, neat little database!
4. MLS rules are anti-competitive. Forget any legal rulings, because they are meaningless. What’s anti-competitive about MLS rules is that they continually suck the life out of any competitive advantages a broker might try to implement. In a death by a thousand cuts, brokers are prevented from using their own data in ways they want - such as watermarking a photo or filtering certain results on their web page. They are forced, through horrific concepts like IDX or data-exchange, to display the uber-crappy data/photos of their worst competitors on their own million-dollar-plus websites, simply because it’s all-or-nothing in the rules. If one broker invest huge sums of his own money to get ahead with new feature on his website, you can be sure his competitive advantage will be diluted once the “MLS” adds that same feature for everyone else to benefit from later – at a group-subsidy rate.
5. MLS systems inhibit business model innovation. What if your company didn’t want to market properties by price – just features or neighborhood or some other feature. No chance, say the MLS software priests: price is a “required field” no matter what your marketing plan, simply because the gestalt says so. Want to link-out to your own video library. Nay, ye aren’t permitted, sayeth the Village Elders. We don’t supporteth links to the external world. And any further attempts to innovate or trick the system will land you in the Tower of London, you blasphemer!
6. MLS systems think like databases, not consumers. Consumers buy homes because their family grows or shrinks, they lose or find a new job, they want a longer or shorter commute, they need more or less space, and so on. They type real words into search engines. On Zappos.com you can search by terms like “high heels” or “disco” and find relevant shoes. Yet MLS systems force consumers to search like a computer, not a person. They’re all “beds, baths, price” driven. How dull. But if you try anything else, you end up with HAL staring red-eyed at you. I’m sorry, Dave, I must insist you enter a town. I’m sorry, Dave, I’m afraid I can’t display that without a price. I’m sorry, Dave, but registration is required before I can show you any data…
7. MLS systems spawn MLS committees. And committees make horrible soup. Everything that makes committees good for wasting time makes them bad for developing MLS policies that bind the business practices of other members. Name one good, effective rule-making body on the face of the planet…. Ok, end of discussion.
8. MLS systems distort markets by creating artificial operational costs and barriers. In addition to the other ways they constrain a broker’s use of his own data, MLS organizations create artificial markets of “our MLS” and “their MLS” based upon mercantalist concepts like geography. Lest we forget, all real estate is local, except in the minds of consumers. That’s why “local” MLS systems perpetuate such barriers (often controlled by committees of competitors, see #7) while they distort operating costs for brokerages who must operate as “multi-regional” rather than “one cohesive organization.” Costs for different software, training, support, standards and data management soar for companies who grow beyond their “local” markets. Even single “statewide” MLS systems, usually found in smaller states, creates borders between neighboring states in mobile regions, such as New England, for traditionalist reasons. While other industries have worked to eliminate operational incompatibility across regions – and around the globe – the persistence of multiple different MLS systems within close proximity can may artificially preclude the formation of innovative business models of larger scale. Potentially even consumers are harmed as these barriers prevent cost economies that could otherwise be passed along in lower commissions.
9. MLS systems are a layer of operational redundancy. Huge portions of the real estate industry operate within a franchise structure that provides (at little or no cost) a variety of operational systems that already do what MLS systems can do, and frequently better. Since most brokers use MLS to communicate primarily with other brokers, the residual value of this purpose is waning daily. In olden days, MLS sytems served a purpose of collectivizing costs for computing power which smaller, independent companies could not afford on their own. After nearly two decades of consolidation and dramatic decreases in computing and programming costs, that reason for MLS existence has disappeared. Even non-franchise companies have to maintain their own internal listing databases, of highly redundant information to what they input into MLS, for accounting and management purposes. And every broker duplicates significant portions of their own data yet again, when they add it to their website and internet marketing. Even if they receive a feed of their data “back” from MLS into their website, they frequently have to add “more” content than what MLS can handle if they want to create marketing advantages like additional photos, videos or text-message response systems. No matter how you look at it, most brokers are double or triple-entering their listing data every day. Without MLS systems they would eliminate a layer of redundancy, and could still share data with other brokers by sharing data feeds with each other on a peer-to-peer basis.
10. MLS systems confuse agents. Perhaps the final nail, and most ironic at that, in the coffins of the MLS systems is that most agents cannot really use them well. The technical support for MLS systems is enormous, even after training is offered. Sadly, most of the hurdles are on elementary activities, such as uploading, resizing or managing photos. Generating reports or emailing listings to consumers, also rudimentary activities, require agents to perform arcane or counter-intuitive activities, even on newer systems. Yet agents can’t take the blame for this: When they can master dozens of other web tools within minutes, without training or technical support, but still struggle as frequently as they do with their primary sales data tool, something is fundamentally wrong with the model, not just the technology.

Unfortunately, none of these ten reasons (and perhaps dozens more) are likely to make MLS go away soon. MLS is one of the few places the real estate industry is holding on tightly to its past, even when the information revolution has already passed it by. Like a Pontiac dealer down the street from newly built Honda factory, it might take another ten reasons, and as many years, for brokers to face the facts. So for good measure, let’s add just one more. Perhaps this one – a consumer reason why MLS must go – is enough to push the industry over the edge.

11. Today’s sellers are Baby Boomers and Generation Xers. They are computer savvy enough to come to the conclusion that MLS printouts and web displays are pathetic. They are horrified to see their homes on “ink-jet” display on their kitchen tables at open houses. And they are mystified by any system that would permit the display of their property online with the icon “Too New for Photo” rather than forcing the agent to upload at least one. Yet even if we ignore Boomer sellers in a buyer’s market, that leaves us with Gen Y first-time buyers who doesn’t use a computer to shop for things or print things to take to the store any more. In an age where iPhones and Blackberries can order movie tickets or plane tickets, the crudeness of so many MLS  displays on smartphones isn’t something that can be “fixed.” Because the Gen Y consumer has already book-marked some other site, where homes display nicely and searches are touch-screen simple.

There’s little to no chance the consumer is going to be wooed back by the “we can renovate it” last-gasps of the MLS monster. The faster REALTORS realize this, the quicker they’ll be able to move forward and revitalize their industry.

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]]> http://www.matthewferrara.com/rssfeed/10deadmls/feed/ 13 http://www.matthewferrara.com/rssfeed/stillpathetic/ http://www.matthewferrara.com/rssfeed/stillpathetic/#comments Thu, 16 Apr 2009 04:45:17 +0000 Matthew Ferrara http://www.matthewferrara.com/?p=1788 A while ago I wrote a short article comparing some of the “standard” real estate marketing tools with those of other industries. I remember commenting how REALTORS, who sell commodities in the hundreds of thousands of dollars range, try to entice buyers with printouts made from an off-the-shelf inkjet printer on recycled paper, while automobile companies readily offer super-glossy-multi-page professional brochures to promote their lowliest of models. Of course, times change: When Baby Boomers invented the real estate industry, printing anything was a mimeographic achievement, so the small office printer was a revolutionary upgrade in marketing in the 1990s. Yet today’s buyers and sellers increasingly come from the Gen X and Gen Y demographics.

Does anyone still think we’re going to re-start the housing market by handing out listing sheets?

Let’s review some basic facts: Last year the average first time buyer was 31 years old, smack-in-the-middle of the Gen X/Y profile. This means many buyers were in their early twenties, while some lagged into old-age-thirties. Even the average seller was only 45 – the tail end of the Boomers, even if they try to pass themselves off as early X’ers. Either way we’re talking consumers who entertain on YouTube, read the news on their iPhones and post video clips to their Facebook page with their eyes closed. Whether it’s a kitchen faucet from Kohler or a new laptop from DELL, the way to attract these consumers is modern multimedia.

Of course, some printed items still work to provide information about products and services. For example, luxury products like the LearJet – comparable in price to some premier homes around the country – feature downloadable PDF spec-sheets complementing their virtual tour and video marketing. not completely unlike a property listing sheet found on some better real estate websites. Still, even LearJet could improve its printed marketing tools compared to a travel site like Abercrombie and Kent, whose Royal Scotsman Train Holiday offers an eight-page brochure online for a $7000-10,000 product. Even an inexpensive piece of software like ACT by Sage offers a multi-page full color product brochure.

The bottom line: One-page property listing sheets are simply pathetic.

To be fair, it’s not just the one page printout that’s awful; it’s the one-page information presentation that most real estate websites provide as well. Whether it’s a jet or a vacation or a software program, all of which have stiff competition in their price range, the marketing tools on their websites offer much more than a single page. Yet most real estate presentations stick to an address, a couple of photos, a few bullet points and a paragraph describing the product. Forget about the huge gap in multimedia – the Learjet site is NASA-like in it’s design while the ACT site offers a full-product video demonstration and a trial mini-site. It seems nearly impossible that real estate would ever reach that level of product marketing, considering the continuing challenge to get agents to put more than a half-dozen photos on every listing. Yet you have to wonder if the real estate industry has some other reason why it continues to propagate the one-page minimalist approach to marketing its products.

Oh, right: They want to force the customer to call.

Does providing less information lead customers to call, email or otherwise contact the “broker” of a product? Possibly. But has anyone ever wondered how many people simply don’t reach out at all, when so little marketing information is presented? Why do so many buyers who visit an open house fail to call for a second appointment? Was it because they didn’t like the house the first time – or that the listing sheet was such a poor “sales support piece” that it failed to inspire them to consider a second look? What percentage of online leads never inquire on a listing – or at best, delay that inquiry because the presentation of home information is flat, one-dimensional, and mostly organized like an IRS form?

Could the listing sheet actually be harming sales?

Any of this could be possible. But perhaps it’s not even that complicated. Maybe it’s just another example of how the Gen X / Gen Y consumer has moved far beyond the Baby Boomer modality of the real estate sales industry (I almost typed “stales” industry – what an interesting slip that would have been…) Listing sheets aren’t just a bad marketing piece; they are a bad marketing mentality. They reduce homes to uniform, tabular experiences that mostly fail to excite, entice or even adequately inform the potential buyer. The “just the facts” approach to room sizes, amenities and taxes smothers emotional excitement about buying a home.  Everything about the listing sheet presentation is dull, rough, plain-paper-bag.

Where are the download-ready multi-page flyers, with edge-to-edge high quality photography? Who is handing out CD’s or flash drives at open houses with dozens of photos, documents and videos to help the buyer learn as much as possible? Have you ever seen an agent offer to SMS a video clip from their smartphone to the buyer’s smartphone after touring a home? I’m guessing these aren’t the ordinary experiences that real estate agents are offering to their customers today.

Think about a great product experience. Perhaps it’s the thrill of flying on a private jet. The luxurious feeling of a train ride through the Scottish Highlands. The creativity of a powerful, intuitive piece of software. There’s no way those emotional responses can be conveyed on a single web page or printout. Complex sales take complex marketing tools. Capturing the value proposition of these products simply can’t be done in a sanitized one-page format.

Real estate is perhaps one of the most complex transactions – emotionally, financially, intellectually. Trying to excite buyers by handing them a single piece of paper seems – well – just a little pathetic.

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And forget about the competition – since they’re mostly not really competition, when you look at the numbers. In that spirit, let’s start with some startling numbers that may indicate that NOBODY in this business is really in competition for the online consumer: The sorry state of social networking usage by real estate professionals.

According to the latest numbers from the 2008 National Association of REALTORS Profile of Home Buyers and Sellers (which, by the way, most REALTORS don’t even know exist – so here’s the link to go buy it) 44% of all buyers use social networking every day. If we look at age groups 18-44, which represent the first-time Gen Y buyer through the move-up Gen X seller/buyer, the number rises to 61%. Another 34% of that same group participates in social networking at least a few times a week. Add them up, and here’s a critical consumer fact:

95% of consumers between the ages of 18 and 44 who bought a home last year used social networking sites at least a few times a week, and a majority used them daily.

Now, let’s make some sense out of those numbers. First, it means that nearly everyone who bought a home last year with a REALTOR has made social networking a way of life. We shouldn’t be too surprised. Last August MySpace beat Yahoo for online ad displays in one month – which means more people were viewing pages on a social net than on a search engine. Yet the real estate industry is still talking about SEO and PPC and other search-portal strategies. The consumers on train have already left the station, and they’re not coming back.

Where is the pent-up demand in real estate today? When the market comes back, it won’t be from the 45-and-older group, especially not the Early Baby Boomers aged 60 and older. Why? Because their homes will have returned to 2001-level values, their retirement accounts largely decimated by the recession and their willingness to make another move limited. Certainly, the retirement trend will continue to push Boomers to sell and buy “one more time” but it will be a segment of highly risk-averse, commission-sensitive sales. Boomers are going to demand super-low commissions because they have no equity left to spare in their home segments; and no extra income to cover the costs, because, after all, they are retiring.

The growth segments for this business – and for any brokerage and agents who plan on being in the business beyond the Boomers’ Last Hurrah – is the move-up and first-time consumer market.

These are the new income-earners, whose families are expanding, and whose lifestyle needs are already creating pent-up pressures to make moves as early as possible. Remember that 43% of buyers bought last year because “it was just the right time” and 30% bought homes because of family situation, jobs and large-space needs. Only 3% bought to “downsize” last year, which may bounce up in the next five years, but certainly not apace with the Gen X / Gen Y trends.

And now, the problem: While nearly all of the current (not just future) real estate consumer population uses social networking sites every day, most real estate professionals barely know what social networking is. Not that social nets are new phenomenon: there are hundreds of millions of ordinary people worldwide on MySpace, LinkedIn and Facebook. So it’s not a secret technology, or a fad. And it’s not going away.

According to the 2008 National Association of REALTORS Technology Survey, as of July 2008, daily REALTOR participation in social networking looks like this:

• 10% on Facebook
• 11% on MySpace
• 15% on LinkedIn

There is a little activity on RealTown and Activerain, but these are largely blogging sites, not really social networks in the same sense as FaceBook or LinkedIn. They are also heavily slanted toward agent-to-agent interaction, whereas MySpace and Facebook are more heavily agent-to-consumer-sphere oriented. The broadest measurement in the survey found that 60% of REALTORS did not engage social networking sites or blogs for business (with an additional 7% “not sure” if they did or not).

At the same time, 61% of REALTORS said they were “dissatisfied to very dissatisfied” with their experiences on these social network sites. Whatever that really means, it probably boils down to “I don’t get easy leads or sales” from them.

Of course.

If we’re wondering why the industry is struggling – and why the downward spiral isn’t entirely the economy’s fault – there’s only one way to make sense of the research: A new REALTOR-Consumer gap has emerged. It’s larger than the chasm the industry crossed when it moved from printed MLS books to online inventory. It affects much more than how homes are marketed, bought and sold. And it makes a mockery of the cliche that “my local market is different.”

When social networking moved online, the primary mechanism by which consumers meet people and create relationships moved with it. Real estate is a sales business. It depends upon meeting people and building relationships. It requires sales people to chase customers,  not the other way around. And by the looks of the numbers, it means that the industry’s woes are only just beginning. When consumers have moved to an entirely virtual country club, it should be little wonder why REALTORS aren’t getting any leads from their postcard golf carts.

So this year, why don’t we resolve NOT to make any resolutions, and try something much better, instead…

One of the most common characteristics of successful companies (and indviduals) is that they don’t actually make “resolutions” at the beginning of each year. They don’t need to “remind” or “decide” to do something that’s critical to their business success – because they implement those actions every day. Successful companies don’t “resolve” to become successful; instead, they have a plan to be successful, and they consistently implement it every day. Even New Year’s Day.

Resolutions are dangerous. They can provide us with a temporary boost in productivity – whether it’s to eat better or to prospect more customers – but they are also a “package deal” that comes with a built-in “excuse” for that moment shortly after making the resolution when we give up. When we stop implementing our resolutions, we can excuse ourselves because they were “just resolutions” to try something; and heck, don’t we just forget about our resolutions like everyone else every year, too?

It would be much better to have NO resolutions each year. Instead, it would be more effective – and ultimately more successful – to have a fairly clear business plan (or any plan, for our health, our education, our family time, etc.) and stick to it. In fact, you don’t even need a GREAT business plan with the “sticking to it” strategy. Most of our clients at Matthew Ferrara & Company are brokerages who have solid, straightforward business plans whose  effectiveness does not come from it’s fanciness. Instead, it comes from it’s consistent implementation – year in, year out. Successful real estate brokers and effective real estate agents never resolve to accomplish crazy goals – but to regularly implement forward-moving goals. Rather than trying to “lose 50 pounds in three months” they decide instead to “maintain a good, solid diet every day of the year.”

Companies everywhere might find they spend less money and time on “failed resolutions” and see more results from keeping-going with their everyday plans. In the first quarter of the year, when their competition is trying to learn, finance and implement their new “resolutions” they will be silently chugging along with their everyday-plan for consistent results. And consistency is the key to effectiveness.

If you believe sales are accidents, right-place-at-the-right-time, luck-driven events, then resolutions to increase those rare moments make sense. If you believe sales are the product of a business plan with clear goals, targeted consumer segments and consistent prospecting and client relationship management, then you don’t need any resolutions. Of course, you’ll make decisions and adjustments – as you implement your plan, you will measure results and modify tactics – but those are not the same as “resolutions” which ask you to take on Herculean-objectives that are far beyond your everyday-implementation reach. Which is why they end up in failure too often.

Too often, we think of resolutions like magic pills to solve our woes – whether it’s losing a few pounds or gaining a few customers. In fact, we even know, deep down inside, that they are fads, fantasies, future-excuses for failures. Successful real estate professionals tell us every year - when they are asked to be on “top agent panels” at our conventions – that the simple, everyday secret to real estate is to consistently do the simple, everyday activities of a sales person. Adopt new tools when needed; adjust your technique to the changing consumer marketplace and economy. But stick to a simple, everyday plan and you’ll create simple everyday results.

At a time when everyone is making resolutions to do the crazy, the bizarre, the un-attainable, maybe your best bet this year is to resolve to keep it simple: Stick to your business plan. Implement it every day, one step at a time. And in about one month, when a lot of people’s resolutions fizzle and they find themselves confused as to why they didn’t meet with success, you may find that the best resolution was not to have any new resolutions at all.

Wishing you success for 2009!

- Matthew Ferrara

Your million dollar website now looks awful because the data from your friendly cooperating brokers sucks.

It’s not like we didn’t know that MLS data is pretty much useless anyway. Let’s be honest: If you’re using “current listings” to create a pricing report for a potential new seller, you’re perpetuating the “over-priced” market disaster because you’re using bad data – the prices set by other brokers who don’t know how to price inventory – to yet again overprice your next listing. Days on market is totally unreliable too, since many MLS systems have adopted practices to let brokers “trick” the system into only representing the “current” days on market – not the total days on market, since that little “two week off-market hiatus” a while back. Good stuff when it comes to using MLS for running your business…

But IDX is a really, really, really bad idea. We’ve been doing it for a while now. So why not step back and ask: How is it working out in the “real world”?

The first thing we might find is – contrary to popular belief – more listings on the website do not necessarily generate more leads. Especially when the plan is for brokers (with unknown websites) to share more data with other brokers (with equally unknown websites). So we’re all keeping the secrets now, is that the plan? Spreading the data amongst brokers does not necessarily mean it’s spread to the consumer. Why? Because brokers are broke these days – so they’re not putting too much extra money into online marketing and traffic generation. When cash is low, SEO and PPC goes right out the door.

The next thing we see is that the shared-display of listings between brokers has led to a substantial number of anti-competitive policies for the use of listing data. For example, some MLS systems have an absurd rule that no signs, logos or other brokerage-identifying information can appear in the photographs of the listing. The “reason” is because those photos are going to show up on a competing broker’s shared listing display. Of course, along with those photos will be – by another rule – a line indicating who is the actual listing brokerage (a “courtesy of” line) but otherwise no marketing content can appear in the photo. Just the front door, toilets and darkened bedrooms. Can anyone tell me why this is a good marketing move for brokers – any of them? Is the “benefit” of getting your stuff on someone else’s brokerage website really greater than the benefit of marketing your listings with the maximum amount of branding? You take a guess.

But the really, really, really, really bad effects of IDX aren’t even the silly, “it takes a village” restrictions of the MLS kibbutz system. The danger comes in a quieter, more insidious attack:

Putting other broker’s listing data on your website directly undermines your company’s image in the marketplace. Here’s how:

Let’s say you have built a website. If you’re a major franchisor, you’ve spent millions on it. If you’re a local broker, you’ve still spend tens of thousands. In fact, you may have spent tons of money your competitors aren’t spending – because they opt for the cheap, silly-looking “virtual office website templates” that can be had for free or a few hundred bucks from the MLS, too. In fact, there’s a disincentive for smaller, less-funded brokers to build websites when their bigger, more businesslike competitors are going to spend the money anyway: the smaller guys know that their inventory is going to show up on that website because of the “rule” that requires all listings to be shared by all participants. So IDX’s first destructive outcome is that it forces some of the companies in the market to make all of the website and marketing investments, while other freeloaders just go along for the ride. But that’s okay, right? I mean, we all “co-broke” each other’s listings – so can’t we all just get along?

But wait! There’s more damage to come. As we all know, not all agents are trained equally. Any quick look at REALTOR.COM’s poor inventory will show you that, in fact, the vast majority of agents have no idea how to take photos, write property descriptions or even completely fill in the data (like taxes, heating, etc). So, most listing inventory data sucks. It’s minimalist – just enough to fill in the required fields in MLS – but hardly anything that makes consumers swoon. The goal continues to be to force the consumer to contact the agent for “more information” – which is exactly what you’d expect from companies who don’t take internet marketing seriously enough to build their own websites. They’ll just put their junk-data into MLS, with a blurry front-door photo, and wait for the better websites to bring in the traffic for a “co-broke” offer.

Except for one small issue: Your million dollar website now looks like (fill in the blank) because you’ve been forced to post this (fill in another blank) listing data from your “cooperating competitor.”

On your website, you might require your agents to have a minimum number of photos – higher than the MLS’s minimum probably. You may even have managers review the listing comments to make sure they’re written in some recognizable language. Your website may accommodate (or even require) a minimum number of virtual tours and multimedia videos. Perhaps it automatically generates local town information and map, because your system accepts GIS coding that’s not required in the “MLS data feed.” In every conceivable way, you have spent the money, time and programming knowledge to create a powerful website with the features consumers want. You can even send listings to Blackberries and SMS text messages. You’re armed and ready to compete for consumers.

But, wait! What’s this? Listings on your site that say “Too New For Photo”? Property descriptions written in Latin abbreviations like “2 BR / 1 BA with a Lg Fm Rm nearby PubTrans.”

Wow – classy stuff there? Now it’s splattered all over your website. Your well-groomed website has been infected with graffiti marketing. And since the “rule” is all-or-nothing, your inventory may actually end up low in the search results because your competitors will take any listing, at any price, crowding out the key spots at the top of your inventory.

You’ve now become the pimp of poor performers. And you’re supposed to like it. Because REALTORS cooperate.

This is why IDX is a suicide pact. Much like the airline industry, IDX let’s the poorest performing companies set the public’s perception of the industry. Websites like Orbitz put the Cheap-O Airlines’ prices right alongside Top Quality Airlines, and the public is left to tell the difference. Like consumers know the difference…

IDX logic is faulty: It assumes that consumers are looking for the “most” amount of property inventory – not the “best” information. It assumes that having “more listings” automatically leads to having “more business” or at least, more leads. IDX logic actually assumes that inventory is irrelevant – because any policy that simply gives away the data to anybody who is in the REALTOR-Club means, by default, that the inventory itself is worthless. Which, by the way most REALTORS post their descriptions, photos and un-marketable pricing, it might likely be worthless.

There is a solution to the problem. But it’s one in which the “village” will need to accept “private property.” Here’s how to eliminate the dangerous outcomes of current IDX policies:

1. Let MLS only warehouse the data. Just create a centralized database with an open-sourced system for participants to pull data as they want (see #2 below). No rules. No forced displays. No limits on content. If a broker wants to add 100 photos, 20 videos and put their logo on every corner of their data, let them do it. It’s their data. It’s the product of their work. And it’s the way they make a living. Tell the rules-making committees to just shut up.
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2. Create a filtering system to pull data that each broker customizes according to THEIR standards of performance. Let’s say a luxury property broker doesn’t want their site to be filled with sub-million dollar listings. They could create a filter that only pulls the MLS data they wish to add to their site. A different broker might only want to show competing properties that have at least ten photos and twenty key fields filled out. They could set the filters to restrict the inventory according to those requirements. By permitting brokers to setup their own filters for “sharing” a part of their marketing tools and financial investments with other brokers, you will let the market determine the standards of performance. And it will let brokers ensure their websites don’t become polluted with trash from less-capable listing houses.
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3. Put the data into a universal data format. Any MLS system that is still running a “proprietary” data warehouse or data feed system should be fired. If I can post a Wall Street Journal article onto my Facebook page using my Blackberry, all for FREE, then it’s absurd that proprietary systems or formats continue to impede the full marketing deployment of listing data to web sites, social networking pages, cell phones and iPods. IDX and MLS policy must get out of the way. They should have NO SAY in how a broker uses their own data. (Hint: MLS systems need to remember who pays them, and start acting accordingly). (Another hint: Eliminate any MLS committees. Just warehouse the data and let creative brokers do (and pay for) whatever they want with their data.)

Most imporantly, get rid of the “all or nothing” rule. This policy is anti-competitive. It forces some brokers to accept the dumbing-down of their investments by other brokers’ ill-trained and no-standards marketing efforts.

IDX isn’t spreading the wealth. It is poisioning the well.

I can say this: Xobni is something every busy Outlook user needs to check out!

What is Xobni? Essentially, it’s an email indexer. What that means is that Xobni creates a better, more useful search that Microsoft’ various “Find” and “Advanced Find” functions (which are more like, “Beg” and “Really Please find it!” to most users). Xobni adds a new “pane” to your Outlook, so it sits in between your displayed messages and the calendar/task bar on the right side. Unlike other “search” tools, however, Xobni is real time. Every email that comes in is instantly added to the search index. Click on any email and Xobni immediately tells you everything relevant about the email – everything you “might” have needed to search for after receiving the message.

For example, if you receive an email from Amy Chorew about a seminar she is teaching with the Savannah Board of REALTORS where the Host is Sally Smith, Xobni instantly pulls those connections together. In effect, it’s more than “just” search – it’s an instant “network” search for every email. When I click the email for Amy, it shows her latest messages to/from me, but it also shows the latest contacts that are related to her (people we have both recently corresponded to) and lists all of the recent files that have been sent/received or collaborated with from Amy. This “mesh” or social network of data is based upon the email sender; so if I click on another email from someone else, another set of recent emails, common contacts and related files are displayed.

All at light speed, too. Which is REALLY cool.

Xobni has some fun features too, such as instantly ranking each person you click on based upon most number/recent number of emails corresponded. Plus it instantly pulls out their phone number from their email signature file and makes it clickable; Skype users will love this because you can click right from the Xobni pane and Skype your contact. For those of us always offering meeting times with clients, and then other times, and then other other times, because nobody’s calendars can mesh, Xobni has a nice “Schedule time with Person” function that creates a new email, looks at your Outlook for the next 5 days and instantly puts a selection of open dates and times into a message for you to finish up and send.

For geeks without customers to work with today, Xobni also has a lot of tech stuff built in. You can click for reports on how many emails you get by person, hour, month, day, etc. All that kind of stuff to satiate the graph-crazed amongst us…

Back in the real world, the last item of mention is really the best: Xobni Search. When you use the search box in the Xobni pane, it’s fast, accurate and multi-format. Searching for a few letters, such as “Pru” finds emails with “pru” in them as I type; plus any contacts with those letters in it at the same time, and any email subject lines with the search term as well. No extra windows are needed (no pop-ups) and there search happens as you type each letter – so you can add/remove letters to narrow/broaden the search as you go.

So far, Xobni has been a very worthwhile plugin for Microsoft Outlook 2007. I have already saved lots of time and effort managing communications – especially finding recent email correspondence. It’s currently free, although I think they should probably charge a small fee for it – although for now, I don’t even see any ads or integrated marketing, so perhaps they’re planning to charge later. In the meantime, I think it’s a potential winner (hey, Microsoft, just buy these guys for a couple-a-million now and they’ll be happy and so will your users!). Check it out.

Too bad, then, that it’s just another example of totally meaningless marketing. What’s worse: Generation X and Y know it.

I never understand why real estate company marketing departments feel compelled to release numbers – usually just because they are big. Are more leads better? Possibly – but if anyone knows, it would be Matthew Ferrara & Company. We have helped more than agents (a big number!) worldwide adopt and implement some of the most advanced leads management software in the last four years. We have literally delivered more than training webinars (do you want to know how many? It’s big!) in that time to the agents, brokers, relocation directors and managers of these companies. We’ve seen the reports and we’ve seen them way agents treat (and sometimes mistreat) leads. In the end, we continue to say what we’ve already said:

Most companies should brag about the number of leads they generate. That is, unless they really convert a good solid percentage of them.

Oh, we get it: Releasing your lead generation numbers is very wink-wink nod-nod. Some marketers love to do this kind of marketing, called “associational” relevancy. They combine two concepts – a large number and a seemingly important criteria of success – and then turn it into a sign of “prowess” in an industry. For example, Ford sells more cars than anyone in America (or they did for some years). But does anyone really want a Ford car? Not at all, if you look at their loyalty repurchase rate, say, compared to Honda, Toyota or Mercedes. So the “volume of a criteria” is frequently a shallow factor of competitive performance.

The same is true for the number of “leads” a company generates. It’s a totally meaningless sign of performance of a website’s ability to help you achieve the only thing that matters in real estate: Selling the home.

Why do they do it? Two reasons: First, it’s supposedly a way to “recruit” agents. A company must be more attractive to agents if it generates more leads – business opportunities – than its competitors, don’t you think? No, we don’t. Who cares if a company generates a lot of inquiries that a) their agents are ill-trained to respond to and b) their agents are unable to convert because they are poor-quality. It’s like competing on the number of listings a company has: Another meaningless number, because any fool can take a listing if they don’t feel like fighting the seller on setting an appropriate price and not marketing in the newspaper. Sorry, folks: Neither number is meaningful.

If I’m an agent, I want to know the quality of the business opportunities generated by my brokerage firm. In other words, my time is valuable; I only get paid if I can apply my skill to real business opportunities. If my broker generates a lot of un-targeted, ill-qualified, busy-making leads that take up my time, then is he really helping me? Not at all. What agents really want to know is the quality of the leads generated, which is wholly indicated by the percentage of leads that are converted into transactions within a sensible time period.

Of course, the conversion ratio will be significantly affected by the ability of that company’s agents to convert them. But there’s a direct correlation between the conversion rate and the skill level of the company’s agents and managers. So a company that converts a higher percentage of leads can very accurately be said to a) be generating more quality leads, b) the training effectiveness of the company and c) the management coaching and accountabiity performance. In other words, converted leads are a sign of a healthy, productive organization. Lots of low quality or generated-but-abandoned leads isn’t so good; but that’s why they only market the “number” of leads generated.

Ironically, agents understand all of this. Especially Generation X and Y agents. They aren’t so willing to accept “any” marketing message. When they decide which brokerage to affiliate with, they are looking for real results – of a company’s marketing, training and management – not just how much busy work it creates. But brokerages aren’t ready or willing to compete on these criteria; for now, they’re still in a “we’ve got more of everything” mode of recruiting agents.

The second reason companies spout these meaningless metrics is that they somehow believe the public will be excited by them. Once again, they are sorely misguided. Today’s sellers are more tech savvy than ever. And they understand the difference between fluff and results. Sellers don’t care how many leads you generate: They care how many buyer inquiries you can turn into buying events – for their house. In fact, super-savvy sellers are likely to have an opposite reaction to the higher number of leads. For example:

You mean you have to generate that many leads in order to sell the number of houses you sell each year? That sounds awfully inefficient!

Generation X and Y sellers will put you in a no-win situation. If you “promote” that you generated 5 million leads from your website, then could easily say, “That’s all?” especially when they see the number of daily visitors to Amazon or Google. Conversely, they could justifiably say, “If it takes that many leads to create your deals, then you must be pretty poor at marketing because even goofy websites like YouTube generate more business opportunities than that!”

Eventually, the real estate industry will learn that meaningless numbers create meaningless value statements in the marketplace. The endless war between “which company has more” leads, websites, listings, etc., continue to distract companies (but not the consumers) from their real mission: to create the “most” meaningful events, which are sold homes. Some companies say they can do both. We’re not so sure. If they did, they’d be better off releasing their competitive metrics, not these silly stats. Tell the public what percentage of inquiries you turn into deals, what number of listings you sell at above 98% list-to-sell ratio, and how many you sell below the average days on market of the competitors.

Those are performance numbers worth marketing. And that’s the only thing consumers find meaningful.

M

Or MySpaced. Or RealTowned. Or Facebooked. Or a member of just about any of the hundred or so major social networking sites. No matter how you look at it, the opportunities just add up.

First, look at the research. No, not the online web blather: of course the social network sites are going to “claim” they are the next greatest thing to croutons (which recently replaced sliced bread as the next greatest thing). We mean the consumer research. It looks like this: Baby Boomers are quickly losing ground as the “largest” source of real estate business to the combined numbers of Gen X and Gen Y. With more than 100 million X and Y’ers still in the market – yes, they are, and going to be the driving force for the next 30-40 years – it’s time to start propsecting on their turf.

In the “olden days” prospecting for sellers and buyers meant going to the Boomers’ watering holes: television, radio, newspapers and mailboxes. Yet fully 40% of homes were sold to first-time buyers last year, and the majority fo those were Gen X and Y’ers. Who don’t read newspapers, watch television on their computers, listen to satellite radio or download commercial-free podcasts and don’t ever check their U.S. mailboxes (they receive and pay their bills online, not with stamps!).

Now, if you’re just getting around to social networking, you’re pretty late to the game – by about 3 years. That’s still par for the course for most REALTORS and technology, though, so if you do it after reading this blog post, you’ll likely be ahead of the curve for most of your competition anyway. If we really wanted to turn social networking into real estate’s next money-making frontier, however, we’d get managers to start mandating it for every agent. Yeah, pretty impossible; managers can’t even get them to show up at an office meeting.

No question about it: Social networking will be a key method for contacting future buyers and sellers. A large source of sellers in the next 5 years will be Gen X’ers who are about ready to move up. They only work within friends or vendors who are referred to them through their sphere of influence. They think all REALTOR marketing – and marketing in general – is baloney (and they are mostly right). So you’re only going to get their attention if you can leverage their sphere of influence. That means someone they know knows someone you know who can put in a good word for you. Like LinkedIn’s “Recommend Me” function. Maybe even just an email. But it’s certainly not going to be an air-brushed glam-shot on a postcard that catches their eye…

Making eye contact with Gen Y’ers is going to be even harder. That group of attention-deficit, multi-tasking, wireless networking socially shy first time buyers (and we do love them!) doesn’t pause long enough to read your e-newsletter (who gets email these days? send them an IM!) And since they’re co-dependent purchasers using Mommy and Daddy’s money (ie., Bank of Baby Boomers) you’re going to have a double-deficit to work from when creating relationships. So once again, they’ll want to get to know you – which doesn’t mean your ego-centric website of awards and typed testimonials. It means they’ll check out your “real-ness” on your social networking page, look at who’s connected to you (and do they trust them) and maybe throw a virtual martini at you. And then, maybe just then, they’ll write something on your virtual “wall” and accept a “friend connection” from you and bingo! You’re making friends in cyberspace.

Look, you don’t get to write the rules. So stop writing ads. No, you’re not going to need an avatar and some virtual dollars, or go walking through a 3-D fanstasy world to find future customers: That’s kids stuff and it’s going to remain that way as long as human beings don’t live in bubbles. But as long as the party stays online – and it’s only getting bigger – you’re going to need to work the room. No more going “to the club” to rub elbows with future customers. For the future – starting today – you’re going to have to social network online.

Now, get to it!

I thought I’d seen it all. I could even get used to the bad photos. Now it has moved into video – and if this is what we’re going to get from REALTORS, I’m thinking I might do better herding cats.

Take a look at this video (Click to open in a new Window; then hold on!) – courtesy of one of our Senior National Trainers, Amy Chorew:

Does anyone besides me remember Mystery Science Theater 2000? Talk about CREEPY!

Now, let’s be fair: At face value, this video is called a “Sample” by its creator. There’s a second one on the user’s profile, which features a woman (still creepy). From what I can tell, it looks like someone is testing some technology to “automatically” make a video from photos of a property, the agent, and computer generated animation (of the mouth) and text-to-speech. Maybe these are example videos from a potential new web video vendor, and not REALLY videos from an agent.

If that’s the case, here’s some unsolicited business advice to the vendor: Pack it in.

Oh, I’m sure there will be lots of agents who would just love this technology. Imagine, they can put up videos by simply uploading their creepy photos, their high-school picture from their website and some text. The “computer” will magically assemble it into a “video” and they will not have to do any work! I bet at leat 100,000 agents would use this technology – and pay for it – in a jiffy!

Sellers, however, should be mortified. In an age where the average seller is 47 years old, and has sold 3.3 homes already in their lifetime, to think that they would be happy with their agent putting up this “Monty Python” style marketing for their home is absurd.

Why don’t they just let their answering machine do the marketing for them?Sounds like the text-to-speech is about the same quality……

Certainly, this technology itself doesn’t hold a lock on creating bad real estate sales videos. If you’re looking for laughs, just check out any of these similarly home-grown B-rated films:

This is a real person, doing their best to imitate a robot’s voice. A “just the facts” approach to narration.

This next one’s great: It’s a cross between a stake-out and someone who just learned how to use the ZOOM feature of their camera and is so happy they make it go in and out repeatedly. Get your air-sickness bag before watching this one:

The next one combines the best in poor photography with the classic style of a 1930s silent movie. Shows a real grasp of the concept of “video”…

This one gets kudos for the music, but someone teach the agent where the Shift key is on the keyboard. If you’re going to use text, maybe you should capitalize sentences? Be sure to check out the “capacious” family room (their word, not mine…).

Of course, if we’re not careful, we’ll end up looking like this SPOOF of an agent. Given some of the videos I’ve seen, however, maybe it’s not too far from the truth?

I’m supposed to write some kind of “wrap up” at the end of this entry. But I’m stuck – really – for the right words. You’ve finally done it: You’ve rendered Matthew Ferrara speechless with your real estate marketing. Now that’s the power of the internet!

Somebody, please: Just shoot me!

Oh, yes. And it’s free!

Viigo is an RSS reader. For some of us – even avid blog readers – RSS is still something we do on our “PCs” (oh, and I think even Macs can do PCs? Lou, what do you think? Can they handle them?) Modern websites and blogs can provide a “mostly text and a few graphics” in a “feed” that allows readers to subscribe to their content in a streamlined fashion. This “Really Simple Syndication” of content not only lets computer users pull in many feeds into their browser, and just scan the headlines (sort of like Google News brings in headlines and then lets you jump out to a variety of web news sources), but the RSS format permits something really special to happen: Streamlined access to website content on non-computer devices.

Like your Smartphone.

Even if your Smartphone isn’t really that smart – some basic phones without keyboards can even accept RSS feeds – the key is that the RSS content has been “stripped” down to the bare essentials, so that the simpler screens on wireless devices can display their content effectively. For those of us who remember “Associated Press” reports that used to come in on a pin-printer to the radio station, it’s the same idea: Plain text, just-the-facts data pushed onto plain-screen formats.

The beauty is that, with RSS, you can not only surf site content faster, but you can surf multiple sites faster on your Smartphone if you use a “reader.” RSS Readers are a kind of “bookmark browser” that lets you enter the URL of lots of RSS streams, then just check an “Index” of their headlines. The RSS technology (or the reader, or both) will frequently ask for “updates” of the content from the sites you have subscribed to, without asking you to “refresh” or actually visit the sites. Content is pushed from the sites regularly (or pulled by the reader every time you start it up).

So, that’s the RSS process. Now, let’s talk about Viigo. You can go to their site and download the software – or just install it  “Over the Air” (OTA) by surfing your smartphone to their site. It’s a tiny application and it installs in seconds. Viigo starts you out with some “popular” RSS feed categories or “Channels” as it calls them – such as News headlines, their own blog, a localized automobile and weather traffic feed, etc. Adding your own channels is a piece of cake – just click your menu and Add Channel. Enter the URL and presto!

Viigo has more than 5000 channels to choose from and you can create your own custom feeds from just about any site, too. Some specific channels are just too cool – such as UPS/Fedex/DHL channel which lets you track packages from your Smartphone. (All Graphics from http://www.viigo.com) All channels can have “alerts” setup to monitor new content for any “key words” you might be keeping an eye on. So if you have added a “Wall Street Journal” feed and you want to monitor the words “housing market” or “inflation” that may appear in new stories, Viigo will send you an alert when they next appear in the feed.

But wait! There’s more!

One of the features I use the most is “Send Article to Me” which instantly takes whatever page I’m reading and zaps it to me in an email. There is a “send to a friend” function, too, but I prefer to send it to myself first, then forward it to friends (so I get the relationship- building benefit of adding my signature file – grin!).

Viigo is very customizable. You can set the maximum number of articles it pulls from each feed (or all feeds) which is important if you didn’t get a large memory stick for your smartphone. Plus you can create a schedule for it to update the feeds (or it does it automatically), which can conserve battery power (or minutes, if you didn’t get an unlimited data plan on your smartphone (not so “smart”)).

When reading each posting, you can scan the basic summary, then pull in the full article in “plain text, minimal graphics” format directly into Viigo, or click to see the full website (graphics and all) in your smartphone browser. If you read articles in Viigo, there are integrated buttons to add them to Del.icio.us, Stumble It! and Digg, too, so you can save articles and share them with friends (or the world) in the blog-posting-promoting networks.

In true Boston fashion, Viigo would be considered “wicked cool!” It’s a must have for smartphone users to be connected to web content in a fast, friendly way – especially for managers who can scan headlines and zap them to agents and clients (who can send them on, too). Adding your own site to Viigo makes it easy to send your own stuff to clients by email, who may be checking up using their Smartphones, as well.

Customers worldwide are breathing a sigh of relief as the Redmond Behemoth seems to have remembered a fundamental premise of running a good business: Listen to your customers!

There’s no magic in that premise. Your customers will tell you everything you need to know to be successful. After Microsoft launched Vista, both customers and industry reviewers provided it feedback. As expected, some people hated it (usually those whose computers were manufactured by Henry Ford Senior) and some loved it (those of us who understood that an OS change means, well, some things are actually going to be different). But more and more, especially amongst corporate clients with large installations, lots of proprietary software and sometimes older hardware in the field, the message was simple: Please don’t take Windows XP away. We might get to Vista in the future, but right now, we’re happy (and in a recession, without extra finances) still using XP.

Unfortunately, Microsoft, whose engineers and sales people are rightly enamored with their own products, just wasn’t listening. They were so certain they were right, so sure they could push the change through, that they turned a deaf ear to their clients. Even after giving a little – pushing back the mandatory cut-over date for computer vendors to sell machines with Vista only – Microsoft continued on the path of most resistance. They said: Vista or Nothing!

So customers started opting for nothing.

Now, don’t get all excited. People weren’t actually switching to Mac or anything (as if) or suddenly learning Linux code (huh? I just want to type a letter…) but they were opting simply not to upgrade their systems. Microsoft didn’t lose market share to the competition with their silly blustering sales approach, but they did lose sales. Their “our way or the highway” approach forced their customers to decide they could live a little longer with their older OS.

For most customers, it wasn’t a crisis, either. Most of us do email, write blogs, do a letter or a puny spreadsheet. Hardly do most users push their computers to the limit. So Windows XP was perfectly fine. For now, we could continue getting along in our lives and business with XP. Maybe add a little more memory and drop in some extra hard drive space. Really – most of us are perfectly fine running Solitaire and watching YouTube on a four year old XP unit. So we simply decided not to upgrade. It wasn’t a crisis, for us.

Unfortunately, not upgrading WAS a crisis for the computer manufacturers, whose sales slowed rather than soared when new technology like a snazzy-new OS emerges. Under Microsoft’s sales approach, they even faced the possibility of being unable to sell units with XP on them – for emergency replacements of broken equipment out there. Certainly no home user could have purchased an unbundled computer and loaded their own copy of their old OS on it. So Microsoft caused their “other” customers – the hardware vendors – some problems too. And they just wouldn’t listen. So those customers, also, started buying less copies of Vista, because they had less machines to sell.

Finally, Microsoft got the message. Both in the market research department and the finances department. Don’t listen to your customers and you won’t have any. No listen = no sales.

This is, of course, an excellent lesson for REALTORS. How many of us are truly listening to buyers and sellers? Not too many – since less than a third of us own Smartphones (NAR’s latest numbers) and most lsitings online look ridiculous. Fuzzy images and no videos aren’t going to attract customers who say the number ONE and THREE things they want to see online are – um – PHOTOS AND VIDEOS! Hello? Is anyone listening?

Make me register to look for listings and I’ll go somewhere that doesn’t make me do it. Make me wait three days for you to get back to me by email and I’ll find someone who will answer faster – maybe just two days. Show up at my house with a printed listing presentation but try to convince me that you’re a high-tech marketer, while you can’t even turn off the ringer on your four year old cell phone and I’m going to really, really consider putting my own listing on the FSBO website.

Like Microsoft, too many REALTORS believe their own marketing materials. We are so in love with ourselves, that we even post our high school pictures on our personal websites. It’s all about US! Me! I’m cool! I’m the best! Even brokers recruit agents with ads that say: Agent – it’s all about YOU!

Um, no. It’s not. it’s about the Consumer. Sorry – but if you forget that lesson, you’re going to have to mend some broken Windows.

Just ask around your office. Agents can tell you all about mortgage rates, and the housing stats and the local number of listings on the market. But can they tell you the average age of the first time home buyer? Can they tell you how many single females bought homes last year? Or how many purchases were made by people with no children at home (as they list their 34th four-bedroom home this month…). Nope. We study homes. And rates. And other REALTORS. And we believe our own marketing hype. But we forget that the customer has their own ideas – their own needs, their own minds. And we just keep plowing on.

Don’t believe me? Then somebody tell me why – YET AGAIN – there’s still listings that look like these on REALTOR.COM today?

1. Pictures
2. Property Descriptions
3. Virtual Tours
4. Area info
5. Maps
6. Agent Info

Now, most real estate agents look at this list and immediately see #6 and get all upset. What? It’s not about me? They don’t want to see my high-school photo? Oh no!

Of course, they completely skip numbers 1-3, as countless entries in our blog continue to point out that too many sellers would be better off putting their own photos online, considering the complete lack or poor quality of some of the stuff that shows up on REALTOR.COM. And yes, the average listing sheet is still pathetic, compared to some of the print marketing that other companies – like computer and car companies – send out.

Yet even if more photos get online, and we work harder to write meaningful, interesting descriptions of properties, it’s still amazing that so many listings lack video tours online. In a world where Generation X and Generation Y are constantly entertaining themselves on YouTube, you just have to wonder how REALTORS can’t yet figure out how to put at least one video tour on every listing. Just one. I mean the average twelve year old can upload a video from their cell phone to YouTube with one eye closed and a mouse tied behind his back, but professionals being paid thousands of dollars will come up with every excuse not to put videos on every listing.

Now, it’s not like just anyone is using video to sell online. I mean, sure, it’s only car companies and faucet companies that really use video to sell their goods. For example, my favorite from Mercedes Benz:

Click the picture above and you’re going to get an awesome 55 second video from Merzedes Benz that grabs your attention, teaches you something about their product – which, at about $150,000 is as much as some houses REALTORS sell – and then provide you the option of a further guided tour with the sales lady who brings you right into the front seat of the car and takes you for an online drive. Just AWESOME!

And did I mention faucet companies? Yes, that’s right: The people who make KITCHEN SINK FAUCETS sell them online with a video clip.

Look at that – it’s a FAUCET – marketed by a powerful, emotional-response evoking video.

Now, it’s perfectly understandable that most REALTORS would look at these videos and say: Hey! We don’t have that kind of production studio or graphics capability. And you know, I’d agree with that entirely. But heck, what about a simple video taken with your standard digital camera, uploaded to YouTube and inserted into your listings? Just press the “other” button on your camera and take a video. if you’re really bold, try narrating it at the same time, even. It’s understandable if you’re not ready to create such a wonderful video as this AWARD WINNING REALTOR video from Mike Lefebvre at Century 21 Commonwealth in Massachusetts:

[youtube=http://www.youtube.com/watch?v=2WFV3S44Y6g]

I’d be happy with something more basic; even just a shaky vid clip of the kitchen, pan the living room and even a spin-me-around in bathroom will do. Anything, really. Just ANYTHING in motion will do!

Of course, if we don’t see more video on REALTOR listings, things might get really ugly. I already caught a lot of flak from my suggestion that REALTORS were like vending machines… People were really “offended” that I suggested they were outdated, coin-operated stand-in-the-hallway junk food dispensers. And while I stand by my initial thoughts, perhaps I was a little hasty. Maybe I picked on the wrong machine – sorry vending machines. Perhaps REALTORS without videos on their listings are not like vending machines at all.

One thing’s for sure: REALTORS without video on their listings aren’t even like gas pumps. Like these new gas pumps in the rest stop on the Mass PIke:

So, I can watch “Gas Pump TV” while I’m making a $75 gas purchase – but I can’t get a single video on most real estate listings that are asking me to pay hundreds of thousands of dollars, including the REALTORS’ commissions.

Can anyone explain that to me?

You have less than 6 seconds to capture a visitor to your website. Can video be the key to engage the consumer? Could be, if your video is professional looking and polished. Creating good video is an art form – it gives a good first impression each and every time. If you ever need to be reminded of how bad real estate video can be, just visit YouTube and search for some real estate videos there…. Okay, real estate video is evolving…

What can we learn from industries who have already made video on their websites standard fare? First off, the types of videos we should have on our websites. Consider:

• Welcome message
• Testimonials from Top Clients saying
• Property Showcase of particular listings
• Town Profiles and other “informational” video

The consumer comes to your website from many different entry points. Not everyone finds you on a Google search (believe it or not). And you only “begin” leveraging your videos through your website: adding them to your newsletters and email campaigns will help maximize each video production. One potential entry point could be video syndication on sites like TubeMogul which lets you to post a video and then “send it” to Youtube and other sites like Blip.tv, Googlevideo, Aolvideo, Facebook and more.

Adding your videos to these sites is free and leverages the social networking aspect of Web 2.0. Make sure you fully set up your profile on these sites, too; Add your photograph and pertinent information about your company. Them make sure they can click through – and back – to your actual website.

Just for fun, go to Youtube put in your city, state and the words “real estate” and see who is marketing this way. A great example of this is done by Coldwell Banker in Massachusetts. Check out their video below.

[youtube=http://www.youtube.com/watch?v=KTGRVAWOlco]

Notice that not all real estate video has to be about “houses” to attract and inform consumers.

Also keep in mind multiple uses for your video so you have a great return on your investment. Once your videos are produced they can be packaged and marketed as:

• Banner video ads on relevant websites
• Client videos sent to potential new clients
• Video on your blog or e-newsletter
• Video clips sent to the press for new services or updates on the market.

Also consider vendors, and industry websites that might welcome your video on their website.

As with all social networking sites, never, never SELL. A topical video will get more play, increase distribution and visibility. It promotes you to expert and thought leader in your area. Your goal is to “inform and entertain. This will allow you to take advantage of the viral nature of video on the web, people who find it interesting will recommend it and send it to others.

Web video packs a punch. It can be highly engaging, keeps people there and consumers can take immediate action on what they see.

So, don’t leave them hanging. Try to include between one to four call to actions Consider some of the following:

• Send more information
• Schedule appointment
• Ask a question
• Download PDF with more information
• Share video with a friend
• Subscribe to a newsletter or listing search

Make sure you track your results so you can gain insight into your prospects and develop better content as you go.

Next up: What makes a good video? Stay Tuned!

- Amy

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Been having a great discussion with the fellow over at 4REALZ.NET over the new REALTOR.COM Home Estimator tool just released – and quite quietly, we might add, since even we techhies missed the press release (so we suspect the public did too…. and about half the REALTORS who don’t even know REALTOR.COM exists…)

Here’s his initial post and my comment summarized:

The part that seems to be missing is accuracy of the listings.

And how right he is: Now we have TWO groups offering consumers basically FLAWED MARKET ESTIMATES of their home’s values.

Now, Zillow might have started this fight, but rather than fight back, the REALTORS have once again been coopted into losing a battle on the other guys’ terms!

My initial reaction was this: Instead of just copying everyone else, maybe REALTOR.COM (and by extension, NAR) could make some decisions based upon market realities. And the reality is that Zillow (and other similar tools) are really inaccurate because the “conditions” on the ground are always so fluid that “estimates” based upon “market data” which is always stale because of “time” are really bad education for consumers. REALTORS should know better. Many consumers buy homes “regardless” of their estimated market comparable – and many sellers are able to sell for higher (or can’t sell nearly the same as a computerized estimate) because of all sorts of NON estimated items – like poorly performing schools, local tax changes, crime, etc – NONE of which can be accurately reflected by a computer. Only by REALTORS who keep up with “the full marketplace” of issues that impact homes.

And Dustin rightly replied that, well, if Zillow has already captured the public’s imagination and attention with their estimating offer, why shouldn’t REALTORS get on the bandwagon, too? He notes that if REALTORS don’t provide the public with online estimates, they’ll go somewhere else to get them.

And he’s right. To some extent.

Zillow has changed the public’s expectations and caught the real estate industry with its pants down.

In fact, that’s what most of these “so called” industry changing companies do: They just go around the slow-moving, stay-in-the-same-lane REALTORS and go direct to the public. REALTORS really do a very poor job of even RESEARCHING the public – I ask in EVERY CLASS whether ANY of the attendees has purchased NAR’s Profile of Home Buyers and Sellers – and NONE OF THEM EVEN KNOW IT EXISTS! So how are they going to invent anything – a pricing tool, a marketing tool, a new service – if they don’t know a thing about the consumer themselves.

For two decades, while internet and technology companies have wreaked havoc on the industry, the COMMON theme amongst REALTORS was “hunker down” and close the shutters! Notice the San Diego MLS this week’s “latest technology” was to create another security barrier against – GASP! – customers getting into the MLS!

So copying the “estimator tool” is still silly – because it means that REALTORS won’t actually stand up and say that the “zestimates” are wrong; Instead, they’ll say, “Hey! If you want wrong estimates of your house values, we’ll give them to you TOO!”

The last part is what I’d suggest we focus on: If everyone “knows” that most online home value estimates are WRONG, then shouldn’t we assume the PUBLIC knows they are wrong, too? Or are we just going along with Zillow’s real estimation: the consumer is an idiot? The price of a home is RARELY simply the averaging power plus/minus adjustments of MLS data, recent sales, or even tax assessments.

I’ve been in towns where the market value of property is SOARING even in THIS DAY AND AGE. For example, Des Moines. Why? Not because the REALTORS are doing anything right – or the Zestimator or MLS is either. But the local government is – and the local employers are – and the full employment numbers are pushing up wages, which are driving up home prices. NONE OF WHICH is accounted for in the estimating power of MLS, Zillow or REALTOR.COM.

Go the other way: Go to Detroit – ground zero for an utterly destroyed real estate and business marketplace. Look at this listing (click it to go to the REALTOR.COM page for it)

Now, go to REALTOR.COM’s VALUE ESTIMATOR and put in that address. Click on it and here’s what you get:

Now help me out: If I read this chart properly: The VALUE ESTIMATOR says that 3 bedroom homes in this zipcode have recently LISTED for under $50,000. That’s FIFTY THOUSAND. That’s THREE TIMES LOWER than the current listing price – although the TWO BEDROOM properties are apparently in MORE demand in this neighborhood – listing for $75,000 more (on average) than the subject property we’re looking at – and FIVE TIMES the average of significantly LARGER homes (like the 5 bedroom ones).

Now, even if it were TRUE that two bedroom homes are more “desirable” in this area, if there were FIVE bedroom homes available for ONE FIFTH THE PRICE, don’t you think there would be DOWNWARD PRESSURE on the 2-bedroom prices? Even a “little”?

This is why ALL ONLINE HOME VALUE ESTIMATORS ARE SIMPLY CRAP.

Oh, but unmercifully, I won’t stop there. Those were just the CURRENT listings. Let’s look at the RECENT SALES for the area: OOPS! There AREN’T any – either in the data or for real, we don’t know… So how can any of the information in the estimate have any meaning, if it’s not VALIDATED by sold data – which is the only true test – EVIDENCE – that any market data is correct or not….

Just do what everyone else does: Look up your own house. I live in a 1750 sq ft condo with 3 beds and 3 baths; it’s REALTOR.COM estimated at $580,000; just a condo, mind you… Three doors down on the SAME STREET is a FULL SINGLE FAMILY HOUSE with 4 bedrooms, 3 baths, 2300 sq feet and built a full hundred years after mine (1949 vs 1840) and it’s only estimated at $530,000. And he OWNS his whole yard. I just get a piece of mine on the deed… Right. And his neighbor’s house, on the corner, with the same beds, baths and lot size: $1.64 Million. That’s a mighty increase for the house next to the stop sign on the corner…

Zilly Computer! Estimates are for humans!

This is why all REALTORS should fiercely resist computerized online estimator tools. They are senseless most of the time. This tool clearly can’t reflect anything but some raw numbers we don’t really know from where… Somehow smaller homes are five times more valuable than larger ones (no, it’s not that buyers don’t want to heat larger homes because of fuel oil… they’d buy the bigger house, trust me, and put on a sweater!) It’s because these tools can’t reflect the realities on the ground – like the fact that Detroit has outrageous taxes, no local industry and people are fleeing the city for myriads other reasons.

The REALTORS might think it’s just easier to “go with the flow.” Yet the proof that even the public could care less about computer estimates is this: They STILL INSIST on pricing their property FAR ABOVE whatever the computer says – whether it’s MLS, Zillow or REALTOR.COM.

If they really believed the computer and trusted it so much, would we really have 2-bedroom homes priced five times higher than 5 bedroom homes on the market in Detroit?

LOL!