The “uberfication” of the U.S. economy is real. Taxis, handymen, travel and, most recently, financial advisors have come under attack by technology. Simplicity and consumer demand is driving the exponential growth of these tech giants, and slowly but surely gobbling up more market share everyday. Everything that could be potentially commoditized is, and there are few things standing in the way of these billion dollar technology behemoths. Which raises the question: “When do tech companies begin to cut out the agent?”
The rise of financial management start-up Wealthfront, which recently closed $64 million in series D financing, has one main objective: get as many millennials as possible on their platform to secure future success. Charging clients only a .25 percent yearly fee of assets under management and far under cutting the current status quo of a 1 percent to 2 percent yearly fee of assets under management. Interestingly, they understand that they will not be successful at getting the majority of the market on their platform, but they do understand that they have a good chance of acquiring millennial customers. And if it can happen in a relationship-based industry like financial management, why not real estate?
Tech giants Zillow, Trulia, and Realtor.com understand this trend, and it is reasonable to believe they will eventually provide a solution targeted toward millennials to buy and sell homes. Millennials are the most tech-savvy generation ever, and many millennials do not fully understand why they need a real estate agent to buy and sell a home. The Big 3 realize that they will not be able to get the majority of the market to use their platforms to transact, but the millennial market is a different question.
Millennials now account for a third of homebuyers, and this trend is only going to increase.
I cannot stress how important it is to understand the needs and wants of young tech savvy consumers. The failure to do so will lead to a loss of future business. To ensure future success and prepare yourself for the millennial generation, here are three requirements:
- Get mobile
Millenials are mobile ― I think this is rather obvious. Just ask any teenager how they communicate with friends; I guarantee every single one will say it’s through their phone. Why would doing business with millenials be any different? The agents that embrace mobile technology to serve their clients will thrive, while others that resist will very quickly fall behind. I urge you to start seeking and implementing a mobile strategy to help your business through all aspects of the real estate process and follow-up.
- Quantify your worth
Millennials will use technology platforms provided by companies if they do not see the value a real estate agent can provide. Growing up in the real estate industry I witnessed the true value of an agent, and I can guarantee one thing: The value in a real estate agent is not about how many leads you can buy or capture. The value lies in providing a concierge level of service. The modern consumer wants to hire someone who can get the deal done efficiently.
- Millennials value word of mouth
A trusted referral from a friend is nothing new, but millennials value word of mouth more than most. Yelp reviews cannot be trusted, and no one wants to pay for Angie’s List, leaving millennials to rely on word-of-mouth referrals more and more. Leverage technology to get people talking about you, and it will only be a matter of time before the phone starts ringing.
The real estate agent is not going anywhere, but a portion of the market will eventually be automated for the consumers that demand a do-it-yourself type of service. This mantra simply follows the laws of supply and demand.
Will Caldwell, a San Diego resident, is the CEO and co-founder at Dizzle, a mobile real estate tech company that helps Realtors generate more word-of-mouth leads.