Do you know how the General Data Protection Regulation (GDPR) is going to affect how you build your real estate website and operate your business? Scott Lockhart does. The former CTO of a hefty real estate brokerage and current founder and CEO of Showcase IDX has worked with a number of clients both in the real estate business and in the big banking and technology spheres, and he’s well-versed in what this European Union (EU) law could mean for a mom-and-pop indie brokerage here in the United States.
Lockhart will be talking about GDPR and its effect as part of the widespread programming at Inman Connect New York, January 28 through February 1 at the Marriott Marquis Times Square. We caught up with him to get a rundown of the law and hear about what he’ll be focusing on in 2019.
Tell us a little more about your session.
What’s really interesting is people either don’t know anything about it or they’ve heard things that are just wrong. The GDPR is the General Data Protection Regulation for the EU; it’s a European law that they brought in earlier this year and what is different about this European law is that allegedly, supposedly, it’s enforceable over here. It goes well beyond any of the current U.S. laws, even the ones contemplated out in California, which are typically hard-core on the privacy side of things.
There’s a lot of misinformation and ignorance about what it is, and also what the effects could be. Some of the fines for abusing or breaking the law are really stiff; they’re $24 million Euro or 4 percent of your global revenue. That gets peoples’ attention. So what the talk is really about is an introduction of GDPR — this is what it is — and an education to the real estate industry of “hey, digital privacy, it exists.”
In the U.S., very few companies that I know of are fully compliant. Under the GDPR laws, you have to keep track of everyone’s personal identifiable information, not just in your system but in downline systems as well. So lead data is sent a lot of places in real estate. It comes in, an agent gets a lead from their website, and that includes personal identifying information. It’s not just their name, phone number and email, it’s anything that they did. The listings they looked at, all their activity.
If you think about that lead and these days everything being so integrated, that lead and information goes to a lot of places. It goes to a CRM, an email provider that the CRM uses to send emails. From there it might go into some other marketing software, customer for life programs, things like that. There’s a lot of downstream application. Under GDPR, you have to track all that, and not only just track it, if the person tells you to, you have to delete it all, which is rather impractical the way most companies are operating right now.
There are a lot of eye-opening parts of this law, it’s really kind of a Pandora’s Box of privacy laws because as you start getting into it, you reveal different layers. Ultimately the purpose of the GDPR from the EU standpoint was to set a new kind of global standard for digital privacy. The big question is, will they ever prosecute overseas? The chances of actually getting a $24 million Euro fine are pretty slim, especially for the average agent out there, but agents should pay attention to what can we learn from GDPR and apply over here that’s just good privacy practice, to our websites and the way that we handle people’s personal information.
People treat other people’s information not like they’d treat their own. The GDPR wants to make privacy part of the design from the beginning; you have to design processes with people’s privacy in mind. California’s will be the same kind of thing but with a lot more teeth — these kinds of laws might not be as far-reaching as GDPR but there are privacy laws coming down the track that will force us to be aware of them wherever you are in the country. If you have customers in California, you will have to be aware of it.
What do you think are the biggest opportunities to focus on in the real estate industry right now?
The internet has really leveled the playing field in many ways, and people get hung up on Zillow being this behemoth, but just as much as Zillow is huge, there’s a lot of market outside of Zillow. There’s an opportunity if the agent, team or broker is smart about it to leverage some of these exceptionally efficient tools out there now in a mix that allows them to compete at a local level. You don’t necessarily need to compete outside the market you’re in, and typically if you’re in more than one market, you have more resources.
Using really cost-effective tools and online advertising with the ability to own your own place on the web so you’re not necessarily renting out space, that’s a massive opportunity that’s within people’s grasp now. For the longest time people were just throwing money at portals because they got leads, but you’re not building your brand. You can’t tell your story and differentiate yourself effectively outside of reviews or being a premier agent. A big part of differentiation going forward is demonstrating success, and I don’t think a lot of agents do a really good job of it. There’s a ton of opportunity in rethinking how they position themselves online and how they use the internet to speak to your business. Being able to meaningfully demonstrate success is going to be the next big thing, because everyone has the same data, pretty much the same website, so what separates one agent from another that gives the consumer the trust and confidence to choose which agent to work with?
To stay competitive, agents, brokers and companies need to execute quickly. What do you feel are key areas where quick execution can vastly improve the customer experience?
There are two ways of looking at this: There’s initial response, the ability to provide answers quickly, that’s basically a must. It used to be “oh you need to get back in 30 minutes,” then it was 15 minutes, 10, 5 — now you have to respond instantly. The other part is transparency and making sure that throughout the process there’s a little transparency not just through the initial stages but through the transaction, and that’s exceptionally important as well.
What are your hopes for the next 12 months, and what will you be working on?
We’re hoping to grow Showcase IDX; we’re growing already at a fast clip, and we’re looking to provide more tools that help agents engage with consumers and consumers to get the best information possible in the easiest way possible.
Dig deeper into data privacy and real estate and discover the opportunities in a changing market at Inman Connect New York, January 29 – February 1. Jumpstart 2019 with tactical takeaways, unlimited networking and thought-provoking speakers. Learn more.
Thinking about bringing your team? You may qualify for special group perks! Contact us to learn more.