After the fur is done flying over the 60 Minutes piece what are we left with? What has really changed? Has Redfin “revolutionized” real estate? Well if offering rebates on commission is considered revolutionary count me among the witnesses. With 6, soon to be 8 markets, I think there is some time before everyone that’s not Redfin is out on the sidewalk with their hat in their hand.
But really, after the complaining of how UNFAIR it all was, it all is — what are YOU going to change?
In all of the complaints and defense I heard a favorite refrain. It seems everyone likes to toss the Nordstrom/Kmart analogy around whenever the full-service v. discounter argument arises. It’s like a broken record “Realtors offer Nordstrom-level service, Redfin is the Kmart of the real estate world” we all drone on. But do we really know what we’re saying; what we’re implying when we toss around our favorite analogy?
Because, truth be told, there ain’t that many Nordstroms folks. There just ain’t. So what makes you as a Realtor THE NORDSTROM REALTOR? Let’s look at some of the elements that helped the Nordstrom brand become synonymous with excellence and see how we stack up.
- Do we follow the motto: “Respond to Unreasonable Customer Requests”? How well do we respond to reasonable customer requests? When is the last time we left a truly remarkable memory with a customer? Do we relish rising to the challenge of unreasonable requests like Nordstrom does? Do we look at them with dread and think “How am I going to deal with this one?” or do we think “Here’s the opportunity to add another story to the growing legend of my customer service”?
- Do we “Use [our] good judgment in all situations”? Do we shirk responsibility when our gut tells us not too? Do we look at the phone at 4:59 on Friday ringing and not answer it? Do we start or end the day in a bad mood? Do we brush off someone because they don’t look like a potential customer? Do we skip the neighborhood mixer for the ballgame on TV because “we don’t feel like working today”?
- Are we “Pacesetters”? Pacesetters are the leaders of the sales teams. They have defined goals and they are the ones that hit them and surpass them. Do we have our goals clearly defined for the month, quarter, year? Are we doing all we can to surpass them?
- Do we have too many policies? Do we hide behind them? Policies are crutches. Policies give us excuses to not rise to the challenge of legendary customer service. How comfortable are we throwing out “the rules” or “the policy” and delivering for the customer?
- How is our brand? Are we consistent in our offering? Do we have a repeatable, defined best practice for everything we do? Do we have a “way”? Do we have a Unique Selling Proposition (and not just in our heads)? If you don’t have your own “Nordstrom Way” you can’t deliver consistent repeatable service that exceeds expectations. The best you can hope for is flashes of genius. The only way to become legendary is to be consistently excellent time after time after time.
I’ve come up with a quick handful; but the list could go on and on. Hopefully these questions get us to refocus, fine-tune and brush up before we have to dust off our favorite analogy again; because there are only so many Nordstrom’s folks — and it takes a lot more than just saying it to be one.
Reuben Moore says:
Hi Morgan –
What’s wrong with Macy’s, Sears, JCPenney, or Target, even? Not to mention all the specialty outlets like Crate and Barrel.
I believe the real estate industry is segmenting into something more along the lines of the retail marketplace. Sure, some of us shop Nordstrom’s and some of us shop K-Mart. But the fact is, there are many, many retail outlets beyond the end-spectrum players.
It’s interesting to note that both Nordstrom and K-Mart struggle with profitability….
May 16, 2007 — 4:07 am
Morgan Brown says:
Hi Reuben,
I agree with you entirely. There are many different value propositions that can be profitable. My point was that too many people toss their hat in to the Nordstrom ring too easily. I just wanted to remind people that its easier said than done.
I also like your closing point, great service does not make profits a right. There are many other aspects to running a successful, profitable enterprise.
Cheers.
May 16, 2007 — 8:41 am
Jeff Brown says:
Hey Morgan –
Your point is indisputable.
Even with an unreasonable complaint, I’ve found many times the approach that works best is to allow them to fully explain their logic. It’s amazing how many times their attitude changes for the better when they hear themselves being unreasonable out loud. 🙂
Irrational positions are often easily dealt with by shining a bright light on the rationale of the complaint itself.
Alas, this isn’t always the case. 🙂
May 16, 2007 — 10:32 am
Morgan Brown says:
Jeff – you’re right. Some times it is impossible to meet the demands of a customer, phsyics, economics, what have you, just make it litterally impossible. But by “shing a bright light” on the issue a resolution that is acceptable to both parties MAY be reached – creating the “win/win” that everyone wants.
May 16, 2007 — 12:15 pm
Susan Jackson says:
“The commission is negotiable. There is no set commission percentage, in fact, it would be illegal to have a set “standard percentage”. Each REALTOR charges what he/she is worth. You can find agents to represent you for less than 6% and you can find agents to represent you for more than 6%. There are a small number of agents that get away with charging more because they are in such demand. Some consumers are willing to pay 7-8% because of the reputation of that agent. If an agent is not in demand, they will be willing to work for less because they must put food on the table somehow. There are always consumers willing to settle for less to save money. If there is a public perception that 6% is the norm, then it is because that is what the average consumer has decided they are willing to pay for a good job.” The 60 Minute story and the whole Redfin philosophy comes up when the consumer willingly pays the 6% but just has a need to complain about it. Everyone wishes they could live the champagne life on a beer budget but most people also understand that is not reality.
May 16, 2007 — 1:25 pm
Trevor Smith says:
Hi Morgan –
Overall these are really great thoughts. They should be strived for by traditional agents and alternative agents alike.
The only thing I am not quite sure about is how going to the neighborhood mixer makes you any less or better of an agent. I hope you are not implying that we should go to the neighborhood mixer to hand out business cards. That is incredibly tacky… and probably a sure fire way to lose business. People smile to your face and then go warn their closest friends not to talk to you…its like being the Amway guy – people just don’t want to be around you.
May 18, 2007 — 9:39 am
Morgan says:
Trevor –
You are correct, I am not advocating simply going to neighborhood meet ups and passing out business cards. I agree – that is a terrible approach to generating business.
What I do advocate though is increasing your visibility as much as possible by meeting as many people as possible and making yourself relevant to as many people as possible. You can’t do any of this staying inside and being unproductive.
But yes – no one wants to hang with the Amway guy.
May 18, 2007 — 12:25 pm
Cliff Keith says:
With only 31 years in the Real Estate business I see Redfin as another viable model for the real estae industry.
Wake up everyone Redfin’s way of doing business will attact a certain segment of the market. We as Realtors need to embrace Redfin’s business model and incorporate what we can of it into our own business model. It is obvious the public will demand it!
Anyways the national firms are not far from entertaining a flat fee based brokerage house in many market areas in the future. ie. “…we will sell your home for $19,950 and provide full service.”
Coldwell Banker tried it in Illinois in the 90’s and called it something like “Coldwell Banker Blue”. That business model makes more money for Coldwell Banker and leaves more money in the pockets of the public. Why would they not do it? Do you think either one cares about the agents?
I suggest we all stop whining and go out and list or sell a home. The future is going to be great! After all we are still a service industry and there will always be a demand for quality real estate agents. We just need to be flexible enough to bend with the market and not let the market bend us so much that we break. The market is always static.
Redfin, Smedfin there is going to be a ongoing new twist on buying or selling a home until the day I die.
Good luck everyone. This too will change.
May 18, 2007 — 5:50 pm
Jeff Brown says:
Cliff – With only 38 years in the business, I don’t know where to start my reply to your comment. If you honestly think Redfin’s business model is viable, you haven’t spoken with their investors.
>Wake up everyone Redfin’s way of doing business will attract a certain segment of the market.
And as long as Redfin’s backers are satisfied with whatever fraction of 1% of the market they’ve achieved so far – you’re correct. They’ve been in San Diego for several months providing empirical evidence they couldn’t sell water to a thirsty man in the desert.
Viable? They’ve failed everywhere they’ve gone. In baseball parlance, they’re 0-fer. They couldn’t hit off a tee. That’s not my opinion – it’s their record so far.
>We as Realtors need to embrace Redfin’s business model and incorporate what we can of it into our own business model.
I honestly don’t mean to be unkind, but if you truly believe that, a rational response making liberal use of logic and empirical proof of their monumental failure, would be a waste of my time. You are, in effect, saying if I simply embrace a new ‘physics model’ that says regardless of what we know to be true, I can now jump off the roof of my home and fall up, not down.
I couldn’t care less about who wants to charge what to sell real estate. Discount brokerages have come and gone, since the early ’70’s. Very few have survived longer than it takes to gain 10 pounds drinking coffee and pounding doughnuts in the office. However, some have, and more power to them. They’ve created a model that produces in the long run.
>I suggest we all stop whining and go out and list or sell a home.
Couldn’t agree with you more. I’ll go you one better. If an agent can’t out perform Redfin, there’s a trade school calling their name. 🙂
>Redfin, Smedfin there is going to be a ongoing new twist on buying or selling a home until the day I die.
After 38 years I’ve heard that tired song until I could scream. The market, when it’s down, or normal, is still paying 6% for our services. They were paying 6% when I passed by first license test in 1969 too.
That said, my crystal ball is as cracked as yours. Maybe there will be a new business model in our industry that charges significantly less than 3% a side. So far though, we haven’t seen any really significant segment of the market ’embracing’ them – especially in normal and down markets.
The only common denominator lasting all of my 38 years in the biz has been results. The public was ‘attracted’ to brokers charging 6% AND produced results in ’69, and they’re ‘attracted’ to those same kind of brokers in ’07.
When my Aunt Fannie’s dead dog could sell a home, discount brokers rise from the muck. They disappear like steam in the air when the market corrects.
The only thing Redfin is good for is entertainment.
May 18, 2007 — 9:02 pm
Dave Lopez says:
This subject always rises when our markets are hot, homes sell themselves, our industry is flooded with new agents and now, new real estate internet models to save us thousands of dollars. [Nothing against new agents, I was one once upon a time.] And I think that is one of the reasons the consumer see us all the same. We now out pace attorneys so what value do we bring? You are right Morgan and Reuben, what do we offer? There are many levels of expertise and services we don’t tell the client about. We are all Nordstrom by default? There is a market for all models, the consumer will decide base on their experience if a full service Realtor is worth it or not. You better have a USP or something ready cuz the consumer is feelin’ the empowerment with the internet and technology. PS. I remember the “Blue Light Special” when I was with CB years ago. I am sure it is sitting on the shelf waiing to be dusted off for the future as they were just to far ahead of their time then.
May 20, 2007 — 12:37 pm