Can real estate companies expand like software companies?
Building a scalable real estate business model is possible — but only by defining and controlling an organizational structure for consuming and leveraging information, both in terms of listing data and consumer intelligence and relationship management.
Elegran has expanded rapidly by developing a foundation built upon a proprietary data management system, which communicates via API (application programming interface) to a customized CRM (customer relationship manager), powering an incredibly successful, data-driven marketing automation platform.
Elegran has scaled more like a technology firm than a traditional brokerage by automating lead capture, data standardization, lead delegation and marketing outreach that is often produced piecemeal, and which limits the growth of other firms. When Salesforce asked me to be one of the first-ever speakers in the real estate industry to present at Dreamforce, the largest software conference in the world, I thought I’d share how we did it with Inman readers.
Why doesn’t real estate usually scale?
Real estate has typically not been a scalable business model. Personalities dominate, but their influence extends only so far geographically or within a network.
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Even in a franchise model, overhead limits expansion because managing a group of independent contractors becomes increasingly difficult with a larger team. Revenue increases at a fixed rate rather than exponentially — and this applies to any expansion strategy; whether you go on hiring spree like Keller Williams, splash a ton of cash in traditional marketing like Douglas Elliman or are backed by venture capital such as Compass.
Even at tech-savvy brokerages, every salesperson interacts with data differently, and each has his or her own workflow, tools and methodology to manage clients.
No ‘just right’ CRM
Web-based businesses are much more easily scaled, as information architectures are standardized. Databases, processing power and software can be scaled, but business relationships are much more difficult.
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Many CRM tools help to manage the churn of new leads, but most can’t really manage and follow up with a large database after the business opportunity has faltered or fizzled.
At one time or another, Elegran has tried or tested numerous CRM solutions like FollowupBoss, Top Producer, Contactually and Boomtown, as well as impressive CRMs with predictive analytics baked-in, like Brytecore. Even Zillow’s Premier Agent product looks conspicuously more and more like a CRM these days.
And while each different service has powerful, productivity-enhancing functionality and numerous bells and whistles, they all fall short at offering a unifying solution to provide the backbone of data structure necessary to fulfill the marketing, sales and management needs of a technology-driven brokerage.
Real estate CRMs offer some great tools, such as decreasing response time, scheduling follow-up scripts and emails, lead sourcing and customer tracking.
Every different platform has a slightly different advantage — very little of which integrated seamlessly with Elegran’s primary marketing channels or stored purchasing criteria from our database, website or lead generation efforts. Reviewing all of these CRM systems raised a few questions:
- How can we use a single system for inbound marketing for prospects that haven’t yet expressed buying interest?
- How do we measure conversion at every stage during the marketing to sale process, and identify the gaps in our real estate ecosystem?
- How do we measure lead quality?
- What happens to a lead after an agent can’t close a deal?
- And how do we store and leverage that information about that lead, and create a strategy to re-engage?
The solution: Customized, enterprise-level software
The answer to all of these questions for Elegran proved to be pouring development resources into customizing the leading and enterprise-level CRM tool specifically to service a technology empowered brokerage, and building out a suite of dynamic and hyper-targeted lead nurture campaigns, which are built upon the data stored about a client and their specific buying criteria.
Elegran spent years building out Salesforce and a marketing automation tool called Pardot, to speak with its proprietary data management system and provide a single solution, defining a standardized data architecture.
Elegran’s CRM serves our marketing, sales and management teams and creates a scalable business model. Rich data like browsing history, marketing media engagement, lead source and purchasing criteria are stored on every record.
The sales process is broken down into stages that follow the logical progression of every real estate deal, with a conversion percentage metric attached to each progressive step and syncing back to analytical platforms.
Finally, the data and patterns that demonstrate inefficiency allow Elegran to create personalized agent development plans, as well as craft complex, dynamic and hyper-targeted automated marketing to re-engage potential business that might have fallen through the funnel.
Upon a foundation of closing the loop on real estate data architecture, Elegran has grown at a compound annual rate of 35 percent over the past five years.
In 2015, Elegran signed in excess of $400 million in real estate deals, representing about 1.5 percent of the Manhattan real estate market with only 55 agents. This puts Elegran’s average agent production at roughly seven to eight times higher than the average agent in the rest of New York City.
We are leading the industry in lead nurturing and marketing automation, building an organizational data architecture through customer segmentation.
By serving clients hyper-targeted content generated dynamically from their database, we are able to automate much of the administrative outreach of its sales team, giving clients exactly what they need.
And when we do that, all that is left for agents to do is to build a relationship and close a deal.
Tigh Loughhead is the marketing director for Elegran.