Multiple listing service executives are constantly barraged by sales pitches from vendors of one kind or another. But the best way to get an MLS exec’s attention may be to listen, not sell.
"Ask, ‘What are your struggles? What’s your process? What’s your strategic plan?’" said Steve Allen, director of business development at UtahRealEstate.com, a public-facing site operated by the Wasatch Front Regional Multiple Listing Service (WFRMLS).
Allen spoke on a panel at Real Estate Connect New York City last week titled "Mission Impossible? How to market and sell real estate software." He offers a unique perspective as both a former agent and a former MLS software vendor for Hewlett-Packard. Inman News caught up with him after the panel.
WFRMLS has 10,000 members, which the MLS estimates represents 92 percent of Utah’s real estate agents.
"My biggest advice (for vendors) is to get to know who the decision-makers are, understand their business model, and understand that if the product is not right now, it might be later," Allen said. "Don’t burn bridges. Leadership and priorities change."
Pay attention to annual strategic plans
An MLS board of directors generally has a yearly strategic plan that guides what it will try to accomplish and what kind of services it will be looking for, Allen said. Vendors should work with those plans, he advised.
"(Say) ‘If your mobile initiative is not until August, that’s perfect. Can I arrange a presentation?’ If they’re not doing a mobile initiative, ask why not. Just ask the right questions" and identify their needs, he said.
For instance, last year’s objectives for WFRMLS included improving or "getting the bugs out" of its software platform; rolling out a rentals website, PropertyPond.com; offering a better comparative market analysis (CMA) product; and providing members with statistical information and reports.
WFRMLS created its own MLS software platform, and often develops products from the inside. Whether or not the MLS chooses to go with an outside vendor depends on a cost vs. build formula that considers how long it would take in-house developers to create something compared to purchasing it from a third party.
It also considers how many of the MLS’ members will use the product. If only 15 percent of members will use a product, for example, the MLS will partner with a company and have it offer the product to the few who will buy it, Allen said.
"We have 10,000 agents. About one-third of our agents that pay a monthly fee haven’t had a deal in over a year," he said. "They’re not going to buy your software. The next third make less than $60,000 a year. Only the top 1 percent make more than $100,000 a year. Having those expectations coming into the market might help you understand who you need to market to."
For instance, the MLS built PropertyPond.com in-house, but partnered with third-party real estate software firm W&R Studios to offer its Cloud CMA tool for the MLS’ "power" users, Allen said. The MLS already offers a basic CMA tool to its overall membership.
This year’s objectives for WFRMLS include upping its mobile strategy and offering its members neighborhood data. The MLS built its own free, simple MLS Web application, but Allen acknowledged that the app was lacking some features and was "kind of weak" on tablets and other mobile devices.
"I had an agent say, ‘My client goes to Zillow and gets more information than I have as an agent. That’s embarrassing,’" Allen said.
WFRMLS is currently in the process of vetting third-party vendors of neighborhood information for both UtahRealEstate.com and PropertyPond.com.
"We have to find the one that fits us the closest, but price is usually the biggest factor," Allen said. "It’s about getting the things we need the most for the best price. We might want A, B and C (features), but not D, F and G."
The MLS will "white label" the neighborhood data and make it available to all members, though the MLS may or may not have to raise its dues to pay for it, Allen said.
"We would have to analyze if we’re going to absorb that cost. We could probably absorb it if it were 50 cents per member per month, but maybe not if it were $5 per member per month," he said.
The MLS must pay the vendor, but if the MLS doesn’t have to raise its dues to provide a service, members would not notice the cost, Allen said.
In that vein, he recommended vendors offer MLSs a variety of licensing and billing options. While vendors may prefer site licenses where an MLS pays the vendor a certain amount for every single MLS member every month, that may not work for an MLS like WFRMLS where a third of its members haven’t done any deals in more than than a year and therefore won’t use any product marketed to them.
Allowing MLSs to promote the product and have the agents pay for it directly might be a better way to go in that case, Allen said.
Skin in the game
Regardless, the vendors who achieve the most success with the MLS are those with skin in the game, Allen said.
Some vendors will say, "Great, I got the agreement. Good luck with that. I’m off to the next MLS," he said. But WFRMLS expects that if it’s going to push a product, vendors should offer support, such as member training, marketing materials or promotions, he said.
"Our expectations are more than come in and get out," Allen said. "The ones that come out and do training of our people, immediately we see high conversion rates," he added.
Of course, that kind of commitment may not be for everyone. UtahRealEstate.com has a marketplace that features the vendors the MLS has signed marketing agreements with. Some of the agreements are more involved, Allen said, and some just say the vendor will be displayed in the marketplace for a fee.
The best ones spell out the obligations of each party, such as how many promotional emails an MLS will send out per month and how many webinars the vendor will host per month, Allen said.
Paving the way for ‘plug and play’ tools
There is one development that may speed the rate at which MLSs adopt vendors that are not part of their strategic plan: the Real Estate Standards Organization’s (RESO)’s Data Dictionary. The Data Dictionary is a standardized set of data terms for the most common descriptions of property characteristics used by industry players. RESO adopted the dictionary, which contains more than 500 terms, in June 2012.
Part of the impetus for the Data Dictionary was to make it easier for technology vendors to develop streamlined "plug and play" tools for MLSs. Because many MLSs still employ different data definitions, the tools vendors develop for one MLS won’t necessarily work for another.
If vendors adopt the dictionary by mapping their software to that standard, an MLS using the same standard "can just push a button and be good to go," Allen said — products will no longer have to be coded in, with the cost and time that entails.
"The adoption is happening," said Rebecca Jensen, CEO of UtahRealEstate.com and chair of the RESO board. Already, data aggregator ListHub, real estate information and technology provider CoreLogic, and the largest MLS in the nation, California Regional MLS, have incorporated the dictionary, she said.
What are other vendors waiting for? "Probably what they’re waiting for is they don’t know about it or they’re just waiting (to implement it) on their task list," she said.
Sometime this year, RESO plans to set up a compliance program, paid for by vendors, to certify them as "RESO compliant," she added.