Technology, Industry

Friday Flash: Let's talk about Zillow

Author
Brian Boero
No.
984
Please excuse the mess. This page is currently under construction.

In late 2013, Zillow launched Tech Connect, a program that allowed real estate software companies to flow Zillow leads directly into their products.

This “open” strategy made a lot of sense. Why would Zillow build full-featured CRM, lead management or marketing applications for its agent advertisers when so many of them were already anchored in other products? Realtor work habits are almost infinitely variable. Switching costs are high. Going with the flow seemed right.

Zillow touted this strategy in its competitive positioning. I recall earnings calls where the term “bloatware” was used to describe the software offerings of Move (Top Producer, etc) and Trulia (Market Leader).

In 2014, the company shut down Buyfolio, agent/client collaboration software it had bought just two years earlier.

Building real estate software was for suckers… then.

2015 saw Zillow release the Premier Agent app, a sleek mobile-first lead response/management tool that includes cool stuff like text-to-voice (to process leads even while driving) and social intelligence (for quickly scoping out details on new leads).

That app got updated in a big way just last week. The expanded Premier Agent app is now an intense mobile + desktop software application with tons of features for agents and, importantly, teams. There’s lead scoring. Lead routing (including call broadcasting). Lead conversion reporting. And complete Trulia/ZIllow profile management that accounts for all the wrinkles around presenting teams accurately.

So, what’s going on with this shift?

Well, I’m not inside Zillow, so I don’t really know, but I’ll make a couple of observations.

First, this certainly isn’t “bloatware”. In fact, it’s unlike anything ever offered by Move or (pre-acquisition) Trulia. It’s brand-new. Mobile. Nimble. Fast. Smart. It’s the sort of thing you or I would build if we had tons of money, dozens if not hundreds of top-shelf software developers and a phalanx of product managers and UX designers.

Second, Zillow is not really selling software here in the sense that Move, Trulia or hundreds of smaller real estate tech companies have sold it. They’re selling ads and leads. The software is bundled with the ads and leads in order to keep the big-spending agents and teams that are “all-in” on the Zillow platform buying more of them.

The software is strategic.

So, abjuring software made sense for Zillow when they were all about signing up as many agents as possible. But now that the company seems to have determined that the path to growth lies in grabbing more dollars from fewer, higher-performing agents and teams, software makes sense. It’s the tie that binds.

Of course, there are collateral effects here. As Zillow provides teams with more scaffolding within which to grow, brokers will feel even more strained to deal with a trend they often find challenging. And to the extent that pros with money to spend run their business on Zillow software, other real estate tech companies will lose some opportunity.

I think we can expect more software from Zillow. But what’s next?

Well, as I’ve written here frequently over the past year, Zillow is still a big gear in what I’ve called the “Broken down lead machine,” the expensive and inefficient beast that spits out millions of low-converting buyer leads. I believe the more interesting development in real estate tech is leveraging data, identity and social platforms to transform seller lead generation, farming and client retention.

Zillow has made some moves in this direction in the past few months, placing more emphasis on selling on its site and apps, and releasing things like a “best time to list” tool aimed at sellers (and seller lead-gen).

Just yesterday we got the release of a Zillow “Owner dashboard” designed to help sellers track the performance of their listing when it’s active, while also offering “tools like Price Your Home and Best Time to List and the new Sale Proceeds Calculator.” These are things that have historically been offered up by brokers and agents themselves.

More seller leads. More seller tools. Soon, I imagine, more seller-focused software for agents.

A listing presentation generator that ties to an agent’s Zillow profile, ratings and historical sales? A mobile-first CMA application? A digital farming suite marrying property and people data?

Never say never.

Enjoy the weekend.