At last.
We have arrived at the destination of this series. (See parts 1, 2, 3, and 4).
In Part 2 of this series, I spoke at length about institutional CRM and why that can be an unbeatable competitive advantage when properly implemented and used. In Part 3, we examined whether an institutionalized brokerage could shift the grounds of competition in such a way as to obtain a competitive advantage. In part 4, we looked at specialization in real estate.
The culmination of all of these factors is something I am calling “systemic brokerage”. Systemic brokerage is the future of real estate.
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I'll cover condos -- you take multifamily! GO GO GO!
“One man cannot practice many arts with success.” – Plato
Welcome to Part 4 of this series of too-many-words. Here are the links to previous parts: 1, 2, 3.
Let us review the situation. Upon deciding that the law firm (although not lawyers themselves perhaps) is a fine model for real estate, you have banded with other rainmakers and formed an institutional real estate practice. You have gone forth and installed a set of uniform, customer-centric relationship management processes, together with the computerized tools (CRM) to help them along. You have recruited people to be salaried employee associates, and have provided the best technical and marketing support. Through your institutional strengths, you have successfully changed the very ground of competition.
The last strategic step to consider is specialization.
In any reasonably complex industry, specialists are bound to arise. The competitive advantage of specialization is fairly large, as customers often want to make sure that they are getting the best qualified, most expert service provider. You are more likely to win business, and to be able to charge a premium for your services because the supply of specialists is lower than that of the run-of-the-mill generalist. On the other hand, the disadvantage of specialization is that your market is smaller than that of the generalist, and the demand for your services is lower as a result.
[I must point out before continuing that I mean true specialization, where someone actually has knowledge and skills that the average practitioner does not have. Simply saying one is a specialist in XYZ is mere marketing, and consumers usually can see past that pablum.] Read the rest of this entry »
