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What I Saw At the Zillow Summit

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Picture from Zillow Summit in Chicago

Earlier this week, before my insane travel schedule hit in earnest, I had the opportunity to attend the Zillow Premier Agent Summit held in Houston. Since I’m not an agent, nevermind a Zillow Premier Agent, I’d like to thank Mitch Robinson of Zillow for extending the invitation. I sent out a steady stream onto the Twitterverse that day, I’m afraid. But I really haven’t had the time to think about some of the things I saw there.

Well, here I am at a Starbucks waiting for a flight, so this seems like as a good a time as any to reflect out loud. I really have no idea what I think, until I’ve read what I’ve written. So maybe by the end of the post, I’ll know. Let’s find out together.

The Event

The first half of the day was reserved for Zillow Premier Agents — people who are actually already customers of Zillow. And there were only three brief sessions: an update from a Zillow senior executive (this one was presented by Amy Bohutinsky, Zillow’s CMO, whom I think might be the single most impressive dotcom executive I’ve ever met — I mean, yes, Spencer is impressive, Errol’s brilliant, Pete is smarter than you and me, but none of those guys are also a mom to two young children at the same time….), an agent panel with people who are already Zillow Premier Agents, and an Economics update from a Zillow Economist (this one was by the big kahuna himself, Stan Humphries).

It was a smallish audience — perhaps 50 people in all? But that added to the intimate ambiance of the whole thing, and big bonus to Zillow for setting the room up with tables and chairs, not just rows of chairs. They of all people should realize real estate agents are going to have laptops and iPads and such. (They do need to get after the hotel to provide power strips at each table, but I know how difficult that can be sometimes.)

A few things to note right at the outset. This was a self-selected and Zillow-selected audience and panel. Obviously, very few people who are already Zillow Premier Agents are going to be attending some event like this just to shovel anger and crap at Zillow. This was a friendly audience (to say the least, see below), and the panelists were selected by Zillow. So keep that in mind.

Secondly, there are some conversations I’m going to consider private and confidential, but most of them were out in the open, and the Zillow people know what I do for fun on this here blog, so I imagine they expected to see some of this online.

Takeaway #1: Zero Fluff

My first takeaway was that this event might be one of the best agent-centric events out there. Of course it’s under the radar, since Zillow’s putting them on just for its own Premier Agents and people they want to recruit to become Premier Agents. But I’ve been to enough conferences, events, barcamps, and the like to know a thing or two about the content.

There was a fair amount of pitching, as one might expect, but zero fluff. Nobody talking about using Twitter to get leads. No “return on engagement” or “social capital” or some such thing. No theoretical hypothetical debate about the future of the industry, or handwringing over some perceived problem or another. Everything discussed was focused around money and how to make more of it. The advice given and the points made — while Zillowcentric, obviously — were 100% solidly focused on what actually works to make the agents more money.

For example, I can’t recall if anyone — whether a Zillow executive or one of the panelists — ever mentioned the phrase “local expert” when talking about leads and inquiries. Instead, they hammered home responsiveness. If you respond to an inquiry quickly, you get business, which gets you money. Period.

Advertising and marketing generated a return on investment, not “brand presence” or “opportunities for thought leadership” or whatever else is not more dough in than dough out.

In fact, you know what event this reminded me of the most? The conferences by brokerage companies and franchises, like the KW Family Reunion, or Coldwell Banker GenBlue. The pitches are about the tools and resources of the company, and the discussions are focused on how to use those tools to make more money.

Takeaway #2: The Value of Zillow to Agents Is Increasing

The second major takeaway for me is that the value of Zillow to agents — at least those souls gathered in that room, who are already paying Zillow — is increasing. Three pieces of “evidence” to consider.

  1. The three panelists all said on stage that Zillow was either the #1 or #2 source for business, after personal sphere. That’s… staggering. Then during the break, I chatted with a couple of attendees (smoke breaks are awesome for these) and they too plainly said that they wouldn’t be in business without Zillow. I asked the panelists about their brokerage company or their franchise (REMAX), and while the two agents both loved their office and loved REMAX, they admitted that they get no business whatsoever from either the brokerage or from the franchise website — and they didn’t expect to. They do get business from Zillow, and expect to, and are more than willing to pay for it.
  2. All three panelists talked glowingly about Zillow Reviews. And given that this is Houston, where HAR.com dominates the online landscape, and HAR.com has an Agent Review section, I was amazed that all three did not participate in the HAR Agent Review program. Like it or not, if Zillow’s not close to the tipping point on becoming the place to go for agent reviews, they’re not that far away.
  3. By far the biggest and loudest complaints about Zillow were that Zillow put a cap on advertising. That is to say, these Premier Agents were upset that they could not give more money to Zillow to get even more advertising exposure. Um, I’ve been in media before. I’ve never seen that before. This is what one might call a “good problem to have”. If people are thinking that Zillow’s ads are overpriced… think that one over again. When customers are pissed off that they can’t buy even more from you, you have what marketing pros call “pricing power”.

And this is based solely on lead flow. None of the panelists seemed deeply engaged with Zillow’s suite of tools, like the free IDX website, the free CRM (AgentHub), or Agentfolio (not in Houston yet).

Takeaway #3: The Branding Play

This part is based on nothing more than gut feel and intuition. We already know that Zillow’s been doing a lot of TV advertising, and that they’ve been making a whole lot of noise about them. We already know from Zillow’s quarterly reports that they feel like those commercials are worth doing.

Thing is, my main motivation for going to this Zillow Summit was to meet Amy Bohutinsky in person. I came up out of marketing, that’s my basic training. And frankly, my experience is that quite a few marketing executives like to do stuff like advertising and branding campaigns because they’re fun and sexy and creative. I’ve seen more than one major company bring on a new CMO to have the CMO spend a year doing surveys and consumer research and then unveil a new logo with new colors, spending millions in the process, in the name of “refreshing the brand” or “making the brand more relevant to demographic XYZ” or some such. The truth is that they did those things because (a) that’s all they know, coming out of ad agency backgrounds, or (b) doing focus groups and doing creative brainstorming over commercial ideas are a helluva lot more fun than poring over traffic reports.

Plus, it is my personal experience that most marketers are like public school administrators: it’s never too early to throw money at a problem, and if the problem persists, the solution is to throw more money at it. Sales lagging? Need advertising. Ads seem ineffective? Well, increase the spend. Product blows? Maybe with the right messaging and color schemes, consumers will start buying it.

Since I think Zillow’s brand whitespace play is the most interesting thing going on in real estate today, I wanted to see what kind of person Amy was, to see what to make of Zillow’s massive spend.

Remember what I wrote above about Zero Fluff? That applies to Amy Bohutinsky as well. Zero fluff. If she chose to do commercials because they’re fun, she did a really great job of hiding that. No, she chose to do commercials because she believed they would make the company more money. She keeps doing them because she can see the numbers. This is a marketer who understands in the best way possible that the point of marketing is not marketing or branding; the point of marketing is to make more money, either right now or in the future.

The exchange that convinced me was when she and I chatted briefly about rentals. As I’ve written before, I think Zillow saw the importance of rentals way before their rivals did, and all metrics indicate that Zillow is far in the lead in the rental space. I thought maybe we’d see Zillow start to advertise and market rentals more heavily. Amy flatly rejected that, saying the rental product just isn’t ready yet for advertising support.

A marketer who declines to spend money on advertising because “it’s not yet time”? Yeah. If you’re not in marketing, it’s hard to understand just how unusual this is.

This is not to suggest that the marketers at Zillow’s competitors are slouches. No, if anything, they’re consummate professionals as well. It is to suggest, however, that the branding play is to be taken seriously.

Two other things I found out about the branding whitespace play.

First, Zillow knew about it and intended to unfold this advertising/branding campaign from the very start.

Second, I theorized that if the Zillow brand becomes powerful enough, one day Zillow might start to be far more discriminating on the agents it takes on to carry the “Zillow Premier Agent” tag. Amy told me that Zillow already does that to some extent. They screen people who want to buy Zillow Premier Agent packages, and reject those they think won’t be responsive or won’t be productive. Um, yeah. Think on that for a few minutes.

Miscellaneous Observations

I’m running out of time. I gotta get to the airport, so let me wrap up with a few miscellaneous observations from the day.

First of all, the real fault line in the whole “syndication” debate may not be between MLS and Zillow, or brokerages and Zillow, or agents and Zillow. The real fault line may be between listing agents and buyer agents. One of the people I spoke with is a broker, in Houston. Which means HAR sends all leads to him at no charge. He said he didn’t care about that that much because he’s primarily a buyer broker. He thought that he might find HAR.com more valuable if he had more listings, but since he doesn’t, he puts his money into Zillow — that’s where he gets his business from.

So for every broker or agent complaining that Zillow is “taking their listings and monetizing them”, there’s a buyer broker or buyer agent who’s thrilled that Zillow is doing just that. That’s an issue for the industry between listing agents and buyer agents; Zillow, Trulia, Realtor.com, whoever-else are all just filling that need for agents who don’t have listings who still want to make a living. You can beat up on them all you want, but the real tension and the real fault line is between listing agents and buyer agents.

Second, Agentfolio is a gamechanger. It will move the locus of the transaction away from the MLS (email gateways, etc.) and brokerages (transaction management platforms, etc.) to Zillow and the mobile app for Zillow Premier Agents at least.

Third, that Zillow doesn’t have a CRM product may be to its advantage. More than one agent talked about how one reason they like Zillow is because they don’t get sales phone calls from Zillow trying to sell them “other stuff”. I want to see how that plays out especially with Trulia owning Market Leader, but it’s something to watch.

Fourth, hotel lunches need to take the low-carb and no-carb crowd into account. 🙂 Heh.

Okay, time’s up. Gotta go catch a flight.

-rsh