Compass made a major splash last year, acquiring Contactually, one of the industry’s more well-known customer relationship management (CRM) tools. The biggest impetus behind the acquisition was simply an agent vote.
“The way we identified [Contactually] is the way we do everything at Compass: We ask agents, what do they want, who do they like?” Robert Reffkin, the CEO and co-founder of Compass said Wednesday at Connect Now, Inman Connect’s virtual real estate conference.
“And they voted and the CRM they liked the best was Contactually, so we talked with Contactually and we acquired them.”
Compass has spent more than $50 million building its CRM for agents, Refffkin said, highlighting the importance of the tool. Only about 20 percent of agents in the real estate industry use a CRM, but 100 percent know they should, according to Reffkin. Productivity tools, which include CRMs, are the most important agent tools, more so than lead generation tools, or consumer-facing tools, according to Reffkin.
One of the biggest reasons agents don’t use one is fear, which is something Reffkin’s mother, a real estate agent, shared with him. At Compass, the company and all agents sign a data pledge.
“Their data is their data and we will never contact their clients, without their permission,” Reffkin said. “Even if they leave Compass, they can bring their contact database.”
“That data is very important and there’s a lot of fear that certain brokerage firms create around data and there’s just fear about it in general,” Reffkin added. “I believe there are certain brokerages that do keep people’s client database and contacts them after they leave, which is horrific.”
Reffkin touted the Compass CRMs integration with the Compass platform, as one of its key innovations. It’s a trend that’s becoming more common in the real estate industry, as of late, with major real estate brokerages and franchisors building their own properties solutions with acquired, or partnered with, technology teams.
The uncertain economic time has led more and more agents to seek digital and virtual solutions, according to Reffkin and agents are more clearly seeing the benefits of those digital and virtual solutions, which is one of the reasons that Compass has spent “hundreds of millions of dollars on technology,” Reffkin said, during the event, echoing a previous statement.
Still, it’s been extremely difficult to find one-size-fits-all solutions and figure out the best way to support agents during the current economic and global health crisis, Reffkin explained, because each agent has different needs. Some agents — of which Compass has more than 15,000 — want productivity tools, others want more educational programming and others just want emotional support.
“It’s impossible to give everyone what they need because agents reflect the diversity of so many different personalities,” Reffkin said.
Despite the pandemic, and the layoffs and salary reductions that Compass has enacted as a result of the economic strain, Reffkin said Compass’ revenue is up 47 percent year-over-year so far in 2020 and the company brought on more agents in March than in January and February, combined. It’s not clear what the company’s other financials look like, however, since Compass is a privately-held firm.
One of Compass’ biggest backers is, however. SoftBank, whose Vision Fund has led multiple funding rounds for Compass, has had public struggles, which Reffkin declined to comment on despite being asked by Inman Publisher Brad Inman.
“In normal times, I’d be happy to go back-and-forth but with so much negativity that’s in the world right now, I don’t want to have a negative conversation about a third-party investor that doesn’t have control of Compass in any way,” Reffkin said. “I don’t think it’s the right time.”