“Disruption starts with unhappy customers, not technology” – an interesting read from the HBR blog, but the headline kind of says it all. And I think it makes sense, in most cases.
For example, Uber and Lyft started in San Francisco, a city where getting a cab had always been a famously awful experience.
But have the real estate industry’s customers ever really been unhappy?
The data (most of which, admittedly, comes from industry sources) have never born that out. The vast majority of consumers conclude their real estate journey happy, and quite willing to recommend the person who guided them on it.
On the flip side, polls from Harris and others have consistently found that real estate agents, as a class, find company with car salesmen and personal injury lawyers in terms of consumer esteem.
Real estate is like Congress in this regard: we love our senators and representatives, inasmuch as we continue to re-elect them, but loathe the group as a whole.
So are all the new real estate models, with all their money, chasing a solution to a problem that doesn’t exist?
Not really. I’d argue, realizing that this sounds pretty awful, that consumers have been suspended in a state not unlike that which Marxists call “false consciousness”. In other words, they’ve been incapable of seeing how bad they really have it, or how their lot may be improved. They are content, but often deluded.
This isn’t the result of systematic conspiracy in our case. I think most homebuyers and sellers are happy because either, a.) they’ve received outstanding service from an outstanding agent; b.) they are in a state of heightened emotion, or afterglow, that colors their retrospective assessment; or, c.) the service felt “free”, net sheet and such notwithstanding, because they never wrote a check.
Moreover, whatever dissatisfaction does occur hasn’t been accretive. Whereas the pain of waiting for a cab in San Francisco built steadily over the course of many frustrating experiences, homebuyers and sellers disengage from the world of real estate for years, decades, or forever.
Thus, for our industry, the gears that might have driven disruption sooner had no teeth. Customers weren’t unhappy and their connection to the world of real estate was widely episodic.
This is why Redfin, for all its brilliance and technology, is still a really small player, market share-wise, after 15 years. It’s why countless flat-fee companies, some with big war chests, have flung themselves against the barricade of real estate as it is, only to be thrown flat on their backs.
Real estate has been protected in this way. And as a result, another delusion, this one in our industry, took root: that we are untouchable.
Disruption in real estate is now being advanced by force, not unhappy customers. By, now, billions in investment dollars; hundreds of millions in advertising; risk-taking on a grand scale. Real estate’s customers are being shaken awake from their foggy satisfaction and being told there is a new and better way.
We in the industry must be shaken awake as well.
I do not think that means responding by mimicking those offering the new ways. I mean, sure, if you’re a broker and want to offer “ibuying” as a lead-gen play, go for it. It will probably work. But I’m very skeptical that Keller Williams, for example, could ever replicate the experience Opendoor provides at scale. It’s like me, aged 47 and deeply unathletic, deciding that my future lies in the NBA. I have strengths, sure, but this… no, of course not.
The more rational response is to focus on those existing strengths. To isolate your company or service at its best and be only that. Too seek, hold and cherish those consumers who genuinely value genuinely outstanding guidance from a skilled professional. To stop hoping that no one really notices that some bozo agent of yours cost his clients thousands, but left them “happy” because he was charming and the customer is in love with their new home.
No, that’s not easy. None of this is.
But it is upon us whether we like it or not.
The issue is being forced.