Real estate firms adopting “Southwest” consumer service ideals

For the past couple of years, pundits of “real estate data transparency” have loudly argued that real estate firms must “accept the inevitable” and allow property listing aggregators to scrape their firm’s real estate listings, or for these firms to post their property listings “everywhere” a consumer will search online.

The analogous situation, claimed by these pundits, is the benefits the travel and airline industries have enjoyed since data transparency largely eviscerated the travel agent livelihood–it’s now easier for consumers to find flights. And once the airline gets the traveler, they can focus on customer service.

Southwest Airlines, however, presents itself as a glaring–or galling–retort to this argument. Southwest does not participate in Expedia, Travelocity, etc. It “forces” consumers to look on for flight information. Has this hurt it’s business? Arguably not. According to this report, Southwest Airlines consistently has the lowest customer complaint rate in the industry. Further, by “forcing” consumers to actually visit to get schedules, Southwest controls it’s own brand experience. This gives Southwest the opportunity to introduce its service ethos to consumers on its own turf, following its own quirky, yet stunningly successful, business model.

Nevertheless, Southwest has crafted strategic partnerships as a way to expand it’s brand and it’s travel schedule. One example is its partnership with ATA. This implies that Southwest is crafting partnerships based around brand extension and synergy as opposed to just looking for leads.

What this short Southwest case study above calls into question is the whole model of lead acquisition strategies currently pursued by many real estate firms. Brand saturation does not always equate to leads with higher conversion rates. There is a break even point where the time spent triaging too many non-viable leads stresses infrastructure to the point where it cannot adequately service viable leads. Lead acquisition strategies should focus on capturing viable leads, i.e., leads sourced from credible sources and partnerships. Sure, Southwest has national brand penetration, but many real estate firms have similar brand penetration on the local level. Thus, these firms can model their out-of-market lead acquisition strategies on the Southwest model–quality partnerships, quality relationships, quality service, quality leads, and quality retention equates to a quality brand.

Ranking professional real estate services

Consumers will now have the opportunity to rank doctors. Will real estate firms feel similar pressure in the near future to allow consumers to rank their real estate agents? The real estate industry will no longer be able to hide behind the argument that “professional services” is not a product and, thus, inherently “unrankable.” If doctors are subject to consumer whim and assessment, real estate agents certainly should be too.

A licensed M.D. attends four years of medical school and does at least two years post-graduation residency. A real estate agent attends a two month class, passes a test, gets licensed and similarly calls herself a “professional.” And some real estate agents deserve this moniker.

The real estate agent I used three times over the last five years certainly deserves to be called a professional. She’s always prepared, thorough, in control, a good negotiator, timely, engaged in the process, and embraces follow-through as a personal point of pride. She’s also an expert in my community, a trusted advisor when it comes to real estate decisions.

But not all agents are like her. And considering this fact, what does she have to worry about if consumers (like me) rate her service and professionalism? Or her past clients rate her service and professionalism? Likely, she would not have much to fear because she’s likely treated them similar to how she’s treated me. Thus, she could use these rankings to build her personal sphere of influence. Conversely, her competitor agents who are not as professional, not as engaged in ensuring above par client satisfaction would have lots to fear from transparent consumer ratings of their sub-par service.

On the negative side of this issue, a real estate firm would have to build in controls to ensure honesty and ensure that competitor agents could not sabotage the ratings system by bombarding it with a false negative evaluations. And such a system would add administrative overhead to already over-burdened staff. And there is a valid argument that consumers would inherently mistrust a rating system managed by a firm for its own agents.

These issues can be overcome. For instance, all clients who bought or sold a home with a firm’s agents could be contacted and asked to confidentially rate their experience with an agent. This, of course, is already done by many firms. Great. Firms just now have to ask clients to go to a webform, select their agent, and answer some questions. And instantly their feedback could be displayed on the firm’s website. And so long as not every agent gets an A+ rating on the firm’s website (i.e., there were some Cs and Ds and maybe some Fs) consumers would see that the firm’s rating system is honest. And to wrap this up, commentator from an earlier post also address important issues.

Social network data mining research 10-17-2007

This paper, Inferring Social Network Structure using Mobile Phone Data, explores how to use social network analysis to predict individual behavior indicators.

Privacy considerations are explored in this paper, Wherefore Art Thou R3579X? Anonymized Social Networks, Hidden Patterns, and Structural Steganography.

Here are some Videos of social network data analysis, and here is a presentation on the same

This paper, Social Network and Genre Emergence in Amateur Flash Multimedia, explores the concept of predicting emergent genres by mining social network data sets, which could be applied to trend-spotting.

Real estate data integration for multi-channel marketing

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.

Real estate zip code search optimization

It looks like this company is winning the Chicago real estate search engine optimization strategy and execution race. These representative results speak for themselves: 60647 homes for sale, and 60647 townhomes for sale, and 60647 condos for sale all have this website listed in Google’s top slot (at least as of the date of this post). But what really sends this site over the top in terms of customer service and Internet consumer convenience is its RSS feed.