Divided we get conquered!

by Marilyn Wilson on January 22, 2011

Can’t we all just get along?

Last week at Inman Connect in New York City, I was invited to share the Top 5 questions MLSs should address in the next year.  I reserved one of my five points to one of the key dysfunctions I have observed in our industry – Internal Squabbling.

 

As the market gets tighter and budgets gets strained, we see more and more examples of discord between real estate organizations supposedly all designed to serve the needs of real estate professionals.  In some regions we see local real estate associations engaging in predatory practices, trying to get a “leg up” on their neighboring “Association of choice”.  In other regions MLSs with significant overlapping market disorder refuse to cooperate – instead choosing to force their members to pay duplicate fees and requiring duplicate listing entry and maintenance.  Still in other cases we see large brokers fighting MLSs against “leveling the playing field”.

While in Florida this week facilitating a plan for one of the large MLSs there we observed yet another example of this unproductive in fighting.

In Florida, the state association is suing a vendor that provided a service formerly included as a statewide member benefit.  The vendor of course has filed a counter suit.  In the meantime, the local associations are pushing back on the state because they are have received a lot of “hate mail” from their members complaining about losing a member benefit and a technology they were comfortable with.

The issue is each of these cases is not who’s right and who’s wrong in my view. Like any disagreement there are two sides to every story.

Here’s the key issue in my view

Are we truly making decisions based on the needs of our customers – the members of state and local associations and MLSs?    Or are we making decisions based on our desperate need for revenues and profitability?  Instead of rethinking each organization’s value proposition, it appears to me that there are many organizations desperately holding on to potentially outdated models and role definitions.

In my days as head of global strategic planning at Fisher-Price/Mattel, our goal was to identify significant problems that we could solve for our customers. When we were successful at identifying and solving an important challenge for our customers, we sold millions of toys and created nearly a billion of dollars in profitability. Conversely, in times when we served our own internal needs like product margin or preferred manufacturing processes we inevitably experienced a loss in brand relevance, product quality, time to market, and profitability.

Focus on the needs of REALTORS, our customers

There are many sad examples of industries that focused more on their own needs than the needs of their customers; and ultimately lost the battle.  Let’s look at General Motors for example.  I had some personal experience with them in the 80’s.  They would build engines and cars that were easy to manufacture in their plants, ignoring the changing needs of their customers. Anybody remember the days of the “energy crisis”?   General Motors blindly continued to make large gas hogs, while the Japanese anticipated the needs of customers and delivered fuel efficient Mazda’s and Toyotas to the United States with huge success.  The established industry leadership ignored the needs of their customers and alas a new set of players came in and swept away a bunch of market share they have sustained to this day.

Do you see any analogies to what’s happening in real estate?  While we’re focused on squabbling over power, geography and service offerings, venture capitalists in Silicon Valley are laughing all the way to the bank. They just LOVE industries that haven’t figured out to cooperate enough to solve important problems for their core customers.

They will continue to try to disrupt the real estate market because frankly, we’re an easy target.

Why do you think companies like Zillow and Trulia have had so much success?  They are meeting unmet needs that the real estate industry refuses to provide.

Home buyers and sellers wanted AVM’s, yet we refused to share them with the buying public. Consumers wanted objective, robust property search sites.  Instead of getting ahead of that curve, we have invited hundreds of players to provide property search solutions using listing data we have provided to them FREE!  We have enabled a whole new industry to divert consumers from broker sites and MLS consumer facing websites.  In both cases we were in the best position to provide this information yet we refused to.

The next one we’re about to give away is agent ratings. We’re so afraid that a consumer won’t say something positive that we’re ignoring a VERY important unmet need of consumers.

So what’s happening?  Smart capitalists like Zillow are now offering agent ratings to consumers free of charge.  While the data will not be NEARLY as good as what Brokers, MLSs or Associations could offer, consumers will flock to it because organized real estate has not provided a better alternative. Brokers, MLSs and Associations have largely ducked the issue.

Note what I said very carefully. Zillow offers agent ratings to consumers. They do not offer agent ratings to agents. Zillow appreciates that the consumer is their customer and goes to great lengths to provide the consumers the best services available. Their vision is very pure and very effective.

How about instead of operating from the insecurities of protecting our jobs, we all lay down our swords for a minute and figure out how to get ourselves on this real estate mess we find ourselves in at the moment?

Yes, some organizations may need to go away and some may need to be re-invented. Isn’t that what happens in a free market economy? Highly skilled people will find a way to make it work for them. Those that are incompetent?  Well – maybe they should exit the industry and find a new passion where they can excel.

I implore every leader in the real estate industry to take a quiet moment to think about their true motivations?  Are you truly trying to help your company and the industry to be more successful?  Is your heart REALLY in the right place?   If not, it might be time to re-adjust your focus.

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