Yesterday, we started a “SWOT” analysis — strengths, weaknesses, opportunities and threats — of the major real estate players to see who’s got the best chance of influencing (or adapting to) an industry change. Without further ado, let’s continue.
Portals: realtor.com
Realtor.com is fed nearly 100 percent of national housing data directly from MLS companies. It has shut down Zillow’s automated flow of homes and is trying to create a data monopoly for itself. This portal can skew people’s view of housing via news mediums. Realtor.com has access to money. And its people know how to take out competition at enormous scales.
But News Corp. just wants in the game for the profits (of course, so does Zillow). Therefore, it may not fully understand the desires of buyers and sellers. And realtor.com currently lacks any innovation based on the desires of the marketplace. To run it as is would be an even greater distribution of what’s already bored the market.
Opportunities? Obviously realtor.com already has a near monopoly on data and many media channels to affect the opinions of the marketplace. It needs to leverage that with radical innovations based on consumer desires in order to bust Zillow’s hold on the market.
One major threat would be for News Corp. not to innovate with its newfound toy. Using the same broker-centric model that has only created 8 percent of real estate portal use will just create a giant, boring machine, and it will continue to flounder. If realtor.com increases brokers’ advertising fees too quickly or demonstrates any further desire for a monopoly, the brokers could scream to the MLS companies, who may or may not listen and cut back on direct feeds. (That’s unlikely, however.) So the biggest threat is internal — will realtor.com innovate in addition to capitalizing on structural strength?
You (and me)
You are smart enough and nimble enough to capture a portion of your local market — but only if you work hard and apply innovation at a micro level. You are aware of the pressures in the marketplace, but you have to take action by perpetually positioning yourself to meet the desires of buyers and sellers relative to the alternatives they see.
You are tiny, though — you are not going to be the single giant cause of change nationally. You can’t control what is happening; you can only anticipate and act strategically at your local level. If you hesitate in adapting to meet the market’s desires, you could very quickly be ousted by an innovative company; there are few second chances in this newfound hypercompetitive real estate environment.
Everyone else mentioned operates at high levels in the marketplace. Your opportunity lies in capturing your niche market locally. The buyers and sellers need you — but you must adjust to their other options. Innovate at your level outside of what NAR or your franchise tells you to do or offers you. Be locally ruthless. Because Zulia cannot capture business locally, but you can.
The biggest threat is the threat of being turned into an 80-hour-a-week worker bee feeding your ever-reduced commissions to NAR, your franchise, Zulia, realtor.com and so on through various membership and advertising fees. You could be caught completely unaware and unable to respond to a monumental innovation against your company or franchise by a major player.
Your action steps
Keep this pretty straightforward, as you won’t have time to create something complex. Focus 100 percent on your market’s greatest needs at a local level.
Fill home sellers’ greatest desires: Marketing the home to buyers and knowing the value of the home and what they should do to maximize that value (sale price). You need proprietary Internet-based tools demonstrating these and differentiating you from your competitors.
Fill homebuyers’ greatest desires: finding their perfect home and having the best Internet tools for that search. Again, you need proprietary Internet-based tools demonstrating this and differentiating you from your competitors.
Here are two perceptual maps with the key players already plotted. (A perceptual map is simply a visual representation of how the marketplace perceives your service offerings based on what is most important to them and relative to what your competition is offering.)
Print these and pencil in where your company stands. Be honest, as you are not plotting what you think but how your marketplace perceives your offering relative to their needs and your competition’s offerings.
Creed Smith is living the creation and implementation of innovation via REalMARKABLE.com, QValue.net, DemonOfMarketing.com and DenverInvestor.com (coming soon).