Having consulted in the real estate industry for over 10 years, I’ve seen many different approaches to technology selection and overall strategy. Here are the five biggest mistakes I’ve seen real estate brokerages make.
Lack of research
What I noticed first was that most companies did very little research when selecting technology. The research I am talking about is research with the people who will actually use the technology they choose: the agents and their customers.
The typical scenario for choosing real estate software for a real estate company is to assign someone from their staff to lead the process. In many cases, especially for larger companies, the designated person works in IT in some capacity or some other staff position. In other words, they are not an actual user of the software. They may be smart, educated and capable in a million ways, but there is no substitution for having someone who is actually going to use a product to be involved in helping to define and select a good technology solution.
There are many ways to do research during a technology selection process whether you do it yourself or involve an outside consultant to help. The first key is to determine where you are today in terms of the products you already use. This can be accomplished a number of different ways, but the easiest way is to survey the people who use the software. Surveys are easy to do today via the Internet.
Unfortunately, constructing good surveys that provide usable results is a bit of an art, so you may want to consider getting help with this if you are not experienced in survey construction. But when they are done well, surveys provide quick access to large-scale, quantifiable results, which is a great first step. But your research shouldn’t end there.
While surveys are a good first step, they are black and white. Yes, you can ask open-end questions to improve the survey results, but they can’t replace the value of an interview.
Interviews are the perfect follow-up to a survey. First, run and analyze your survey. Then, with that knowledge in hand, use selected interviews to gain a clearer understanding of your technology picture.
Remember to interview individuals from different groups, including new users, high producers, the tech-savvy and the tech-averse. Our industry, more than most, has a wide variety of people we need to engage with our technology. So make sure you aren’t just talking with one of the groups that make up your company.
Like surveys, conducting good interviews takes some practice to get useful results. Take some time to develop strong interview questions ahead of the actual interview and try to be consistent when you interview multiple people so you can compare the combined results. What you are looking for are consistent responses, not one-offs. To do this, you have to be consistent first in your interview techniques.
The final research piece is to check references. I am always amazed at how often this doesn’t happen. If you are going to select and install a new piece of technology, doesn’t it make sense to talk to some people already using it as a first step? Take the time to do your research and it will pay huge dividends in the long run.
Lack of a clear long-term strategy
The second mistake brokers often make when choosing technology is not having a clear overall strategy. They are thinking tactically rather than strategically.
When I worked with brokers to help select technology, I always asked if I could first see a copy of their strategic technology plan. Most didn’t even have a strategic plan. If they did, technology was at best just a mention in that plan.
Technology is core to everything we do today in business. Your company deserves to have a solid, well-developed technology strategy so decisions made on technology are not done tactically. The average real estate company has many different pieces of software. If you want to create a true enterprise solution, you need to have a strategy.
Every strategic plan needs to have three key components:
- Your starting point: You need to know where you are today. Doing a strategy without a clear picture of where you are today is like trying to use a map but not knowing where you are starting from. This is where the research comes in.
- Clear objectives: This is the second part of any good strategy. You have to know where you want to go and why. This is what brings a team together and creates real synergy, when you are all moving towards the same vision.
- Action plans and benchmarks: Having a strategic technology plan without action plans and benchmarks is nothing more than an intellectual exercise. How would you know if something is working?
Your plan is going to have real objectives, such as increasing the number of online leads, increasing lead conversion rates, increasing return on investment, or recruiting more agents. Make sure each of your goals has a specific plan created for it and a person responsible for that plan, along with timelines for completion.
Then, create specific measurable benchmarks to assess your progress to your goal. If you would like to learn more about benchmarks, read the book “Good to Great” by Jim Collins.
I have worked in the real estate technology industry as a vendor in broker-agent technology and MLS technology, as a consultant helping my clients evaluate and choose their technology, and as a customer, licensing software for my own business.
Having those different perspectives has helped me see something that I think is really critical in a successful vendor-client technology relationship: the importance of trust. You really need to find vendors that you believe are working with you to help you reach your goals.
In conducting RFPs (request for proposals) for large MLSs, we are talking about contracts worth millions of dollars. During that process, one of the keys I always stressed to my clients is not just finding the right software at the right price but also finding the right company to work with.
Is there a good cultural fit? Do you feel they understand your objectives and will really do their best to help you reach them? Will they recommend a less expensive option if they think it is the right approach? Do you like them on a personal level?
These are all really important factors when choosing a long-term technology partner. All of our businesses are stressful enough. Our technology partners should help to reduce our stress, not add to it.
Most importantly, there has to be trust. I can honestly say, in my vendor role, I often recommended lower-price options or even steered customers away from products they thought they wanted if I didn’t think it was the right move for them. I know this is the type of advice and collaboration that creates great, long-term business relationships. Good vendors do that.
I can also tell you that vendors love to work with the clients that trust them, and they will always go the extra mile for them because good vendors want their clients to succeed and benefit from the products they provide. When clients like and trust them, those are the clients they love to serve. We have all had clients who think you are distrustful and think you are always trying to take advantage of them. Choose vendors you can trust, that you are happy to pay for good products and services, and that can also trust you, and they will be stress reducers and partners in reaching your goals.
Viewing technology as an expense
Technology should no longer be viewed as an expense. Today it should be viewed as an investment. There is no industry where this is truer than real estate.
Having the benefit of working with some of the best real estate professionals in the U.S. and Canada, I can tell you that there is not a top player in any area who does not subscribe to this belief. These real estate pros spend a lot of money on technology because they realize it pays dividends. That makes it an investment, not an expense.
These companies and individual professionals also do the other things I pointed out. They have strong, trusted relationships with their vendors; they do research; they set clear goals; and they measure progress against goals. So it’s not just a matter of throwing money at technology and seeing results. It is investing in technology as part of a clear business strategy.
The other component in this topic is understanding how to let technology pay for itself. I have worked with a number of real estate companies that have reduced or eliminated their core technology costs by being creative in the way they distribute their enterprise software solutions and the leads they distribute to their offices and agents.
Managing and running successful online marketing campaigns can be expensive, but when done correctly they produce fantastic results. Shouldn’t a portion of successful sales from these leads go back into the cost of these marketing funds?
Again, when you see technology as an investment it definitely makes sense.
Failure to evangelize
Remember the line from “Field of Dreams”: “If you build it, they will come”?
Well, forget it when it comes to real estate technology. Putting technology into place and thinking that your agents will adopt and use it to its full potential just because you built it is a pipe dream. You need to evangelize it.
Hopefully, when you choose a new technology you have a clear vision for why you are doing it. You see real results that you want to realize as part of that technology. You see real benefits that this new technology can bring about. Your agents have to be brought into this vision. They have to understand it and they have to believe that if they use it they are going to be more successful.
Agents are creatures of habit, as we all are. There is certain level of inertia that you have to overcome in any business when you implement new technology.
Make sure if you are implementing a new technology in your business that you include evangelization as a necessary ingredient that you use, and use repeatedly, until you get full engagement. If you don’t, that technology will just be an expense item and not the investment you need it to be that will pay dividends.
Michael Audet is vice president, business development, Real Estate Webmasters.