Back on Real Estate Agents...

I really enjoy reading Seth Godin's blog. His content is always thought provoking and he manages so many new thoughts a week - it's astounding. Read here for his thoughts on agents (interestingly after I posted my comments on real estate agents - but I doubt it was because he reads my posts).

I thought I would share a positive story on agents. We have finally found a place to move to, just around the corner from where we are now. Part of the reason I am so happy to move is due to the agent handling the transaction. The name of the agency - Plumb Property. I had reservations around their tag line of "Providing the ultimate in customer service" as you are never really sure if you actually qualify as customer...

The agent my wife dealt with was polite, interested and went out of her way for us. When we went in to sign the documents they had a box of toys to occupy our son. The receptionist even jumped at the chance to entertain him while the agent took us through the contract. I can't even compare this to our last experience. I have to admit, as jaded as I am - I felt like a customer.

I hope they continue to succeed in these difficult times for property related business.

Does your marketing message contradict itself?

Here in Queensland, Australia - we are about to have a state election. As a South African, it is interesting to see how directly the campaigners attack each other.

I would like to highlight a particular advert that is currently airing on television. (I tried to find a video version but they are all not working...here is a link to a newspaper article about the advert). Basically a number of world leaders make very strong statements about the global financial crisis and then the opposition leader is shown supposedly disagreeing with all of them.

The advert then closes out with a homemaker in her kitchen making a plea to voters, the opposition does not really know what is going on. Trust me, you should vote for the other party....

My issue with the advert is that the message brought by the advert is : Don't vote for the opposition - they disagree with the global view. Don't vote for the opposition, there leader does not know what he is talking about. Don't vote for the opposition - they are not adequately qualified to be leading you..........brought to you by some lady in her kitchen!

If I cannot rely on an elected official because of some statements edited into a slick package why in the world would I rely on the opinion of some random person commenting on this?

What is your marketing message? Is it consistent? Does it contradict itself? Does it build your brand or compromise it?

*Disclaimer*

As a non-resident I cannot vote. I have no party affiliation. This article is purely a comment on marketing message.

Real Estate Agency Theory

Agency theory looks at the conflicts of interest that exist between parties with different interest in the same asset. Usually this refers to the conflict between shareholders and managers of companies.

Real Estate Agency Theory (which is a term I made up over the weekend), refers to the conflict a real estate agent is in when looking after the interests of the seller or lessor, the buyer or lessee and themselves. The incentives at play in the agents mind are studied in Freakonomics (a great read, buy it here if you are Australian or here if you are South African)

As a buyer / lessee, you would do well to remember that your interest will probably always be last on the list. The problem with this sort of attitude from agents is that in any property transaction - you actually need a buyer / lessee. We are kind of a big deal in the transaction, it does not happen without us. In fact, if you thought about it, the only expendable party in the transaction is actually the real estate agent.

But in the property boom we have just been coming through, demand outstripped supply and the buyer / lessee group was huge. Agents and sellers had all the power, incompetent agents and agencies could make buckets of money without providing good service to all parties.

In order to be a successful agent in a downturn economy, you need to focus on all parties. This secures repeat business, this enhances your brand. All real estate agents sell exactly the same thing, surely the differentiation is who the are and how they sell.

Case in point (with thanks to my wife for coming up with this gem) : We submitted an application to a real estate agent for a rental property we are interested in. They get a whole bunch of applications, they process them and the owner picks a winner. The winning application gets a phone call, to say : "Your application is successful." Everyone else gets....nothing.

What? Not even a phone call. In a shrinking property market! In a fiercely competitive line of work! A real estate agent has :

1. A number of properties they are trying to let
2. A list of contacts that are actively looking (they even know what type of property these contacts are looking for)

A couple of calls and you could rip through your rental property inventory pretty quickly, with very little effort - they might not even have to advertise certain properties.

But I suppose this may not work - like I said at the very beginning - it's just a theory.

The proof is in the pudding...

You know the scene. Someone nods knowingly, smiles and then says : "The proof is in the pudding."

Now unless that is yet another corny and macabre joke during the opening sequence of a CSI episode, it makes no sense. What proof is in the pudding? And why is it in the pudding?

The correct version of the expression is actually : "The proof of the pudding is in the eating." This makes a lot more sense. You are only really able to determine if the pudding is a masterpiece once you have tasted it. That is the test, that is the measurement of success.

The proverb can be traced back to the 1300's and was popularised by Cervantes' Don Quixote in 1605.

What does this have to do with your business?

Simply, when the proverb was coined - it made sense. It had a meaning, people understood it. Over time, the expression was still used but it had changed. Some people may have known that it was incorrect, some people may have applied the meaning of the original expression to this new one. If you look at the expression with no understanding though, it is meaningless.

This could be said for a lot of business processes. When the process was developed it made sense. Over time though the process has been altered, it reason for existing may have changed or people may simply not understand why the process is there.

It is very important to regularly review your business processes and the challenge the status quo. If you are fortunate to have your processes documented, review them and ask yourself these simple questions :

1. Why is this process performed?


2. Do I still need to perform this process?


3. Does this process actually achieve what it was desgined to?

If you answer "Yes" to all those questions, keep the process. If the answer is "No", then you might need to redesign the process or throw it out all together. If you have not documented your business processes, get started - it is part of your organization's value.

Customer communication is vital

It was not that long ago that areas of Johannesburg, South Africa were regularly plunged into darkness. The reason, rolling blackouts instituted by the electricity supplier Eskom. The cause, not enough electricity production to meet the demand.

It was a number of events that led to this position, one being that generation capacity had been severely hampered by a number of generation failures. Another being that total demand had been steadily growing over time while the total generation capacity had not. Long story short - business and political disaster.

Eskom struggled to communicate to its customers when these blackouts would occur, how long they would last, if the blackout currently in an area was a scheduled one or an actual fault. It was ludicrous.

Then appeals to all - do your bit! Save electricity, don't leave the TV on, install ripple switches on your geyser, consumers of bulk electricity such as mines must curtail operations, no new houses may be built unless they have solar heaters for water and maybe even gas ovens and stove tops. Also, electricity tariffs will have to be increased to pay for more generation capacity.

Hooray! The problem seems to be rectified. No blackouts for some time.

Then today Eskom announce so more news. Due to the drop in electricity consumption (partly due to a downturn in the economy and probably partly due to everyone trying to save electricity) the electricity tariffs will have to be increased.

Excuse me?

This illustrates how important it is to make sure your customers are not in the dark (please pardon the pun, but I think you will agree it would have been irresponsible of me not to use it). It also shows how important long term strategy is - but that is another discussion for another day. By communicating properly with your customer and being transparent on the basis of decisions you create trust.

Why is it important to create trust? Simple. People pay for it.