Real Estate Relativity

This Universal McCann study states that

• Blogs are a mainstream media world-wide and as a collective rival any traditional media
• The blogsphere is becoming increasingly participatory, now 184m bloggers world-wide

And as recently referred to in my previous post on the long tail, the New York Times discusses the power of blogs for real estate firms.

So why are many real estate brokerage web sites so un-blog-like? It seems to me that if consumers are familiar with blogs, frequently read and interact with blogs, brokerage sites ought to adopt “blog-like” functionality on their web sites so as to give consumers modes of “familiarity” when they visit (it’s probably safe to say that consumers interact with non-real estate sites on a much more frequent basis and, thus, their expectations for best-in-class web site experiences are set by these non-real estate sites).

For example, brokerages could create a popular search cloud. Similarly, firms could create a listings type cloud based on property type, location, lifestyle, time-on-market, foreclosure, and price. As demonstrated by Amazon’s “Customers Who Bought This Item Also Bought” product recommendation success, consumers want to know what other consumers are doing and thinking. Thus, a search cloud lets consumers take a pulse of the market by quickly perusing the cloud. Second, a listings cloud quickly lets consumers see what type and how much inventory exists without having to perform a search to get this information.

One click into either cloud quickly sifts the database and returns a results set to the consumer, and from there he/she could further refine a search; thus, reinforcing that the firm’s website is functional, speedily returns results, and respects consumers’ time. Further, these two features would go a long way towards giving consumers something “familiar” while enhancing real estate website functionality and data accessibility. All of the above combines to increase marketing penetration and consumer loyalty.

This is a great video interview of Google’s CEO by McKinsey & Company Consulting. Read this definition of Zipf’s Law first, however, if you don’t know what Zipf’s law is. What’s especially intriguing is the interview segment that discusses the long-tail versus the head. Schmidt does not dismiss the long-tail as a search marketing strategy, but he does implicitly decry its value. My take-away from his comments, however, is that no single strategy is the marketing silver bullet; rather it’s a blending of marketing strategies that makes sense. Abandon the long-tail as a strategy? No. Augment your firm’s short-tail and primary brand promotion strategy with a concerted long-tail marketing strategy powered by blogs? Absolutely. This study leads credence to this augment, where it states that blogs have just as much reach as mainstream media.

Here’s a great example of multi-channel marketing: the Maximum Ride literary series. The first book in the series refers readers to this blog, which refers readers to this YouTube video.

Real estate professionals can use similar tactics. For example, on listing presentation collateral, refer prospective clients to your blog, from your blog refer clients to your listings. Why the blog first and not your listings?

Your blog operates as an authority imprimatur where your clients and prospective clients can read about your expertise; thus, your blog operates as a 24/7 testimonial as to WHY you’re an expert. Prospective clients want to know “why” they should retain you. Current clients want a reason “why” they should refer you. Past clients need a reason “why” they should reengage you.

The tightest definition of multichannel customer management I have yet found is:

Multichannel customer management refers to the design, deployment, coordination, and evaluation of channels through which firms and customers interact, with the goal of enhancing customer value through effective customer acquisition, retention, and development.

Neslin, et al. have authored a definitive research article that real estate firms can use to understand the challenges pertaining to “modern” real estate practices relating to client relationship, and agent relationship, issues. The research paper explores five primary challenges and analyzes the issues pertaining thereto.

Neslin begins by identifying the challenges:

[F]ive major challenges for managers: (1) data integration, (2) understanding consumer behavior, (3) channel evaluation, (4) allocation of resources across channels, and (5) coordination of channel strategies.

This post is first in a four or five part series that will explore Neslin’s position and extrapolate such to real estate marketing and client relationship best practices.

Neslin begins by identifying multitudinous ways by which consumers engage retail firms–from kiosks, call centers, catalogs, bricks-and-mortar stores, etc. Similar interaction vehicles are true for real estate firms–front-yard signs, websites, office walk-ins, etc. Next, Neslin defines “channel”

By “channel,” we mean a customer contact point, or a medium through which the firm and the customer interact.

He then sets the basis for his study: that the focuse of MCM is on the customer, as MCM is a customer-centric function. Neslin next identifies major phases of a client interaction

First, customer perceptions and preferences drive channel choices (e.g., the customer may prefer the Internet for search because it is easy to use). Second, the customer learns from and evaluates his or her experiences, which feed back into the perceptions and preferences that guide his or her next shopping task (e.g., the customer may learn that the Internet search did not answer all the important questions). Third, the customer chooses both channels and firms, so from the customer perspective, it is a two-dimensional choice.

The relevant question then is: to harness this consumer interaction data, what investments must a firm make regarding such? What Neslin argues is that firms do not necessarily have to invest in processes that involve “full data integration” in a quest to develop a “single view” of a customer. What this suggests, then, is that firms must make strategic investments in data acquisition a key points in a transaction.

Real estate firms can leverage key consumer data acquisition “channels” or points. First, any point where a consumer registers for information is a channel. This real estate site contains at least 15 registration opportunities for clients during key phases of a transaction: from beginning (click-to-chat) to contacting an agent to book a showing appointment. Of course, many firms already have this data. So what’s the next step?

Data overlays.

That is, real estate firms should consider augmenting this core consumer registration data with real time, or post-transaction data overlays, from data aggregation companies like Experian, Acxiom, Equifax, etc. These overlays take the form additional demographics, psychographics, household income levels, lifestage, etc, data elements.

Another form of consumer data can be supplied by real estate agents. Although somewhat rare, some agents actually keep client profiles (likes, desires, familial relationships). Why? Because thes agents know that understanding a client’s profile allows them to serve this client (and like clients) at a degree somewhat higher than the norm. These agents use these profiles as their competitive differentiator.

Creating client profiles (either at the per record level, or aggregate level) should be considered a first step for any real estate firm that’s serious about multi-channel management. By using such profiles firms can engage clients at a more relevant and informative level. Thus, maximizing the return on investment the customer is making by spending time on the real estate firm’s site. Similarly, a firm maximizes its own return on investment by allocating tight marketing resources in a more intelligent and cost-conscious manner.

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:

1. Understand the Retention Mode your product, brand or channel resides in.
2. Understand the Migration Mode your product, brand or channel resides in.
3. 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.
4. Map the Ecosystem, so that the executive can clearly understand how all products, brands and channels interact with each other.
5. 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.