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Interesting Branding Insight: Real Estate Companies Pay Attention!

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This post by Marty Neumeier on @Issue (from which the above graphic cometh) might be the most interesting branding-related insight I’ve read in quite some time.  Go now and read the whole thing.  I’ll wait.

Let’s assume that he can back up the assertion via survey data, focus group data, and actual market results.  The conclusions are very cool and very interesting indeed.

If They Don’t Hate It, You’re Not Doing It Right

The most interesting insight for me was this:

This is because radical differentiation doesn’t test well in focus groups. When you ask people what they want, they’ll invariably say they want more of the same, only with better features, a lower price, or both. This is not a recipe for radical differentiation. This is a recipe for me-too products with pint-sized profit potential.

Marty Neumeier is talking about focus groups, of course, not actual consumers in the marketplace.  But there is a lesson to be learned here.

Brand differentiation inherently means “different” — and people don’t necessarily like different.  The famous Henry Ford quote, that if he had asked people what they wanted, they’d have said faster horses applies here.  Real innovation, the kind that disrupts markets, the kind that establishes real industry leadership, means that some people just aren’t gonna care for it because it’s weird, it’s a little nuts, and it’s different.

Real Estate Brands & Companies

In all of the past discussions about brand and branding in real estate, and how little real estate brand means today, I don’t know that we’ve ever thought of things in quite this way.  But if you do… there are only two well-known brands in real estate that draw any sort of negativity for being different: Keller Williams, and Redfin.

When Keller Williams first appeared on the scene, various people within the industry called it a cult, a gimmick, crazy-wrapped-inside-cheezy, and so on.  Agent teams — a construct that some brokerages and brands fear and dislike — are baked into the KW DNA in a way that they are in no competing national brand.  I myself have scoffed at some of KW’s efforts that placed an agent front and center in national ad campaigns, thereby neutering the value of the brand itself.  Yet, a few years later, KW is one of the fastest growing real estate brands, and its brokers and agents are starting to dominate top performer rankings.  There’s something there.

Redfin was hated by some right from the start, and even today, there are plenty of detractors.  Their agents are supposed to be morons, the rebate model is stupid, and Redfin is just a web-powered buyer agency, and so on.  And yet, I personally have never seen a more active base of customers who are so willing to recommend Redfin to one and all, at least in social media.  Redfin users are constantly posting on message boards and blog comments, telling others to use Redfin if it’s available in their market.  There’s something there.

Both KW and Redfin are about “radical differentiation” — love ’em or hate ’em, they’re doing things that are pretty weird by traditional real estate standards.  That doesn’t mean, of course, that they’re going to succeed necessarily.  As the chart shows, you could be Different but Not Good.  But at least they’re on the Different side of the chart.

In contrast, I think it’s fair to say that virtually everyone else from individual agents to national brokerage brands in real estate are trying to do the “Good but Not Different” model.  They all want to be seen as professional, as advocates, as caring about customers, topnotch local experts, etc. etc. and stand out about as much as teardrops in a rainstorm.  Neumeier thinks these “Good but Not Different” companies and products are me-too brands with pint-sized profit potential.  I agree.  Because that’s what most brokerages are: me-too brands with pint-sized profit potential.

The Caveat

The biggest issue, of course, is distinguishing between Different and Good, and Different but Not Good; they look a whole lot alike, especially based on customer feedback.  As Neumeier puts it:

What makes the good-different chart tricky, though, is that some of the potential winners in the upper right corner look a lot like the dogs in the bottom right corner. The line is often blurry, and the consequences for making a bad call can be extreme. It takes an experienced innovator to know the difference – someone who can match customer comments to a previous pattern of success.

And I would add that even experienced innovators can often get it wrong.  Steve Jobs is an experienced innovator, and even he produces duds like AppleTV from time to time.

If you’re interested in playing it safe, then focus simply on being Good: efficient, fast, priced right, etc.  It might be pint-sized profit potential, but at least there is the potential for profit.  But if you’re looking to be really innovative, if you’re looking to do something no one else has done, if you’re looking to bring a new way of doing the same old thing to the market… then you’re going to want some hate, some negativity, and some criticism.  Otherwise… it’s not different enough.

The road less traveled is less traveled for a reason.

-rsh

9 COMMENTS

  1. Most people try to be different by being good. Since most consumers think adequate is good enough, it is very hard to stand out just by being very good. I think now is a time where real innovation is needed but the risk of trying has not changed.

  2. KW is the new Remax model. Hire the best agents and make them profit share to train Newbies. Duh

    I'm surprised Redfin has made it this far. Kudos.

    Great Posts. I'm going to be following your blog.

  3. KW is Exit… just with touchy-feely corporate image. What they (and Exit) do differently is not consumer facing, they both just moved the constant recruiting battle that every office manager deals with down to the agents themselves. The agent offerings from KW, at least in our market, are no different than that of C-21 agents, CB agents, etc, etc.

  4. […] Updates from Apple's press event heralding its new iPad tablet computer. 2 Likes Interesting Branding Insight: Real Estate Companies Pay Attention! | Notorious R.O.B. – Conversatio… This post by Marty Neumeier on @Issue (from which the above graphic cometh) might be the most […]

  5. Interesting … One area I'd like to dig a little deeper is around the definition of “Good”. It's subjective, particularly around a professional services business, and the experience is not again repeated by the client for some time. Therefore, the brand is built around the experience at the agent level, no?

  6. Interesting … One area I'd like to dig a little deeper is around the definition of “Good”. It's subjective, particularly around a professional services business, and the experience is not again repeated by the client for some time. Therefore, the brand is built around the experience at the agent level, no?

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