Home Real Estate How Do You Compete With WalMart?

How Do You Compete With WalMart?

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So I’m trying to put my thoughts on cluetrain real estate together.  And while all those thoughts are swimming around my head, I read this fantastic interview of Alex Chang, CEO of Roost.com, over at 4Realz.

Specifically, I read this section:

I don’t think it is a stretch to say that the big brokerages are only just beginning to use their websites to create a compelling consumer experience that competes with REALTOR.com. Why do you think it has taken the national brokerages so long to complete on this front?

It’s a question of core competency. It took a long time for retailers to get good at building e-commerce sites which is one reason why Amazon has done so well. Clearly, forward thinking brokers get this and are investing in their own websites. But the bottom line is that building great customer experience online is hard, even if that’s all you focus on all day long. And it’s not cheap. Also, I think it takes a little while to start to be able to measure and see a return from a broker’s site in this industry. So you have to have the appetite to make longer term investments in technology. That can be a tough pill to swallow.

Then I read this:

To date, many of the most successful real estate professionals do most of their marketing off-line. If one of these experienced real estate agents wanted to jump-start their online marketing, where would you recommend they begin?

It starts with your own Web presence. First, create a couple great websites and blogs that get across why you are the best at what you do in some specific ways. Ensure that there are all sorts of ways for consumers to contact you on these sites, and obviously make sure you have some excellent ways for consumers to search for homes on these sites (you knew we were going to say that). Second, get some tools that will help you actually see what return you’re getting from traffic to these sites. Where is the traffic coming from? What leads is it generating? When those are done, find targeted marketing vehicles that send traffic you can actually measure to these sites at budget levels you can afford.

Did you get that?

So on the one hand, the large brokerages like RE/Max and Coldwell Banker lack the core competency to build great customer experiences online.  On the other hand, Alex is recommending that agents create “a couple of great websites”.  Not just one, mind you, but a couple.

Alex’s parenthetical comment above, the “you knew we were going to say that” is actually illuminating.  Here’s my translation of what he is actually saying:

You need a couple of great websites if you’re going to be successful marketing yourself online.  Thing is, building good websites is very hard work, even if that’s all you do every hour of every day.  It’s also very expensive.  In fact, great big companies like Realogy and Re/Max can’t do this right.  Ergo, there’s no way that you, Ms. Agent, are going to be able to.  Thankfully, Roost.com provides you with an excellent search solution and a great IDX-compliant website to you.  You only pay for the traffic you want.

I dig it.  It’s smart marketing on Alex’s part.

There’s a saying in the retail industry, of which my wife is part, that you don’t out-WalMart WalMart.  How do you compete with the behemoth that is WalMart?

If you try to compete on the same basis — price — then WalMart will kill you.  Their operational efficiency is many times greater than yours.  Having invested billions of dollars into their IT system, WalMart knows when a lightbulb in Aisle 4 of their store in Topeka is about to go out.  They know that Store #1422 will run out of Purina CatChow day after tomorrow, so they send the truck out with Purina CatChow with just the right number of units today, to ensure that Store #1422 never runs out, and the customer is never turned away with cash in her pockets.

You’ve got to compete on some different basis.  Target is doing it through designer labels, appealing to higher end customers.  Costco is doing it with more branded merchandise.  Neither competes with WalMart on price alone.  You can’t out-WalMart WalMart.

So here’s a thought for all you real estate agents out there.

Go over to Roost.com, to Trulia, to Zillow, to whatever site you can think of.  Check out what they have.

Can you out-Roost Roost?  Out-Trulia Trulia?  Out-Zillow Zillow?

Those websites have great user interfaces, wonderful data, and trained professionals who spend all day thinking about user experience, information architecture, and human-centered design.  You have none of that.

At the same time… I have a secret to tell you.  Guess what Roost, Trulia, and Zillow don’t have?  That none of the great and powerful websites out there have?

smilingface.jpg

A face.

Not one of these websites has a face.  Or eyes.  Or a smile.

You can’t out-Roost Roost.  But Roost can’t out-you You

Cluetrain claims that markets are conversations.  But it doesn’t say, nor do I think it needs to say, that markets are online conversations.  The Internet makes types of conversations possible that were not before.  But there are conversations that predate the Web, and will survive it.  Authentic, human, face-to-face engagement.

There is no substitute for it in business.

And you’ve got a face.  Roost, et. al., does not.

Think about that.

-rsh

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Rob Hahn
Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

20 COMMENTS

  1. I don’t know exactly when you started, but you have very quickly risen to one of my favorites.

    I think the one thing that scares the Roosts of the world to death is that it will likely that an individual will be able to out-roost Roost. It’s only a matter of time before somebody white lables the process for the little guys.

  2. I don’t know exactly when you started, but you have very quickly risen to one of my favorites.

    I think the one thing that scares the Roosts of the world to death is that it will likely that an individual will be able to out-roost Roost. It’s only a matter of time before somebody white lables the process for the little guys.

  3. Why, thank you Todd. 🙂

    I started pretty much as soon as I joined OnBoard and no longer had to worry about a legal department coming down on me for having a personal blog. I love the people at Realogy, and the company is great in many ways, but it’s not exactly the most risk-taking organization in the world.

    With respect to out-Roosting Roost… perhaps someone will white label the process. But the business model has to support that, because Alex is right that building a good consumer destination site is very expensive and very difficult.

    -rsh

  4. Why, thank you Todd. 🙂

    I started pretty much as soon as I joined OnBoard and no longer had to worry about a legal department coming down on me for having a personal blog. I love the people at Realogy, and the company is great in many ways, but it’s not exactly the most risk-taking organization in the world.

    With respect to out-Roosting Roost… perhaps someone will white label the process. But the business model has to support that, because Alex is right that building a good consumer destination site is very expensive and very difficult.

    -rsh

  5. Rob, I am really stoked that I came across your blog. I read a group of real estate related (technology) blogs that are great, but finding something totally new with a fresh perspective is awesome. I will be back for more.

  6. Rob, I am really stoked that I came across your blog. I read a group of real estate related (technology) blogs that are great, but finding something totally new with a fresh perspective is awesome. I will be back for more.

  7. Great advice. As a successful realtor I can attest that while the consumer goes to the internet to begin the process, that is just the beginning. Nothing, in my opinion, can replace the personal interaction that takes place when I work with a buyer showing properties; pointing out features, reminding them to focus on the finanicals of the condo association, explaining the strategy of making a strong offer. It doesn’t end there. Often times we realtors are the ones who after the offer is accepted take the midnight phone calls and weekend emails to prevent the deal from falling apart. The lawyers, mortgage lenders, home inspectors all get paid regardless. We are the only ones who have a vested financial interest in seeing the deal close – plus the emotional satisfaction that comes from finding my client a new home. Often, that client becomes my neighbor and friend. Walmart can never say that!

  8. Great advice. As a successful realtor I can attest that while the consumer goes to the internet to begin the process, that is just the beginning. Nothing, in my opinion, can replace the personal interaction that takes place when I work with a buyer showing properties; pointing out features, reminding them to focus on the finanicals of the condo association, explaining the strategy of making a strong offer. It doesn’t end there. Often times we realtors are the ones who after the offer is accepted take the midnight phone calls and weekend emails to prevent the deal from falling apart. The lawyers, mortgage lenders, home inspectors all get paid regardless. We are the only ones who have a vested financial interest in seeing the deal close – plus the emotional satisfaction that comes from finding my client a new home. Often, that client becomes my neighbor and friend. Walmart can never say that!

  9. Jay Thompson http://www.phoenixrealestateguy.com/
    just turned me on to your blog and I am SO glad he did! I will be sending the agent clients I work with a link to your blog and this post specifically. fantastic. great writing, solid considerations that nail the points very simply. I like how you think.
    look forward to more reading!

  10. Jay Thompson http://www.phoenixrealestateguy.com/
    just turned me on to your blog and I am SO glad he did! I will be sending the agent clients I work with a link to your blog and this post specifically. fantastic. great writing, solid considerations that nail the points very simply. I like how you think.
    look forward to more reading!

  11. Your blog is my find of the day, courtesy of Joseph Ferrara’s post. I gave out links and recommendations today as well. It’s a always a pleasure to find original thoughts , ideas and refreshing voice on the RE.net. IMO, your blog has it .

  12. Your blog is my find of the day, courtesy of Joseph Ferrara’s post. I gave out links and recommendations today as well. It’s a always a pleasure to find original thoughts , ideas and refreshing voice on the RE.net. IMO, your blog has it .

  13. Why… thank you Stacey and Faina. 🙂 I owe Jay and Joseph both a drink next I see them (which will be the first time I meet them in person…).

    -rsh

  14. Why… thank you Stacey and Faina. 🙂 I owe Jay and Joseph both a drink next I see them (which will be the first time I meet them in person…).

    -rsh

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