Kevin Hillstrom, President of MineThatData has written an excellent whitepaper on conducting a multichannel forensics analysis. Why is this whitepaper an important resource to real estate firms? Because real estate firms are engaged in complex multichannel marketing endeavors. But only a handful of these firms analyze their data from a multichannel perspective.
How does a firm begin its forensics analysis? Hillstrom explains:
- Understand the Retention Mode your product, brand or channel resides in.
- Understand the Migration Mode your product, brand or channel resides in.
- Combine the Retention and Migration Mode, understand which of twelve retention/migration modes your business operates in. This determines the way you will grow your business, long-term.
- Map the Ecosystem, so that the executive can clearly understand how all products, brands and channels interact with each other.
- Forecast the Ecosystem. This allows the executive to understand the long-term health of the ecosystem, given various marketing initiatives.
A key point Hillstrom makes is to look at multichannel businesses as ecosystems, where each product and division is interdependent on one another (a biodiversity perspective would also apply). Unfortunately, many companies are still balkanized in this regard.
For the most part, real estate firms have at least centralized their focus around a core product and service: representing buyers and sellers of homes and other forms of real estate, combined with highly related ancillary businesses such as rentals, REO, mortgage and title services, etc. This is a real estate firm’s ecosystem.
Hillstrom, in this whitepaper, has identified several business modes and strategic considerations related thereto. With the exception of certain commercial divisions and investment services, real estate firms fall within one of the two following modes: Acquisition / Equilibrium Mode and Acquisition / Transfer Mode. Both modes imply a constant sourcing of new customers with differences in how customers adopt new products or services. In the case of the former, Hillstrom states customers occasionally migrate, whereas in the case of the latter, the assumption is that customers will migrate to another product (much like a professional baseball player over his career migrates between teams).
So how can real estate firms a) position their products and services more relevantly to new sources of customers while b) targeting the “may migrate” class to the “probably will transfer” segment? Hillstrom advocates mapping the ecosystem
A key aspect of Multichannel Forensics is the mapping of the ecosystem you work in. Each combination of products, brands and channels are mapped. Any relationships in equilibrium or transfer are mapped with arrows, arrows that indicate the direction of the relationship.
The next step is to forecast the ecosystem, which, Hillstrom argues, enables executives to engage in valuable scenario analyses.
The benefit to a real estate firm in undertaking these analytical steps is that it will have a deeper understanding as to how its agents influence (negatively or positively) the firm’s sales of its primary and ancillary products and services. What’s also beneficial about Hillstrom’s whitepaper is that he actually gives you a step-by-step process by which to perform the analysis.