Editor’s note: Inman News is seeking input for our Roadmap to Recovery editorial project, which focuses on the future of the real estate industry. This article features responses to a set of forward-thinking questions posed by Inman News. You can view this list of questions at: Inman.com/Reinventing — if we publish your responses you win a free pass to the upcoming Real Estate Connect conference (for new registrants only).
The following is an Inman News Q&A with Pam O’Connor, president and CEO for Leading Real Estate Companies of the World.
Q: How will the real estate industry be different when we recover from the current downturn?
Brokerage firms will contract significantly in terms of brick and mortar. A balance will have to be struck between having smaller, well-located facilities for client meetings, support resources and building an "in-person" culture, while not wasting overhead costs — for space that isn’t used — on telephone sets and lines that have been replaced by cell phones and PDAs, etc.
The growing sophistication of consumers will force brokers to be more selective in hiring, more aggressive in "de-cruiting," and more focused on ramping up the knowledge and expertise of their associates, with the goal of having fewer associates producing more business and representing the company’s brand much more proficiently. Standards and accountability will have to be reconciled with the independent contractor model if it is to survive … by deselecting those associates not willing to perform accordingly. To accomplish this fundamental shift brokers may need to view management differently, focusing more on subject matter experts and coaches than traditional branch managers and migrating toward a more strategic role for this new-age leadership team while handling deal troubleshooting with transaction coordinator specialists.
Finally, brokers who have an interest in longevity will measure their return on investment more carefully for every expense, such as the cost of customer and agent acquisition; technology; and advertising that produces closings. And they will understand the importance of investing in innovation that will enhance their value proposition and differentiation in the marketplace.
How will brokers pay for these changes? More company-generated business or lead generation re-margins the broker’s revenue and — if done in sufficient volume — will enable associates to transfer the proportion of time spent from prospecting to working with consumers so that a win-win balance and partnership can be achieved for both the brokerage and its associates.
Q: What skills will the real estate agent of the future require?
A: In a word, EXPERTISE, with highly elevated knowledge about:
- Neighborhoods and homes (history, appreciation, construction, turnover, profile, target market appeal, amenities);
- Investment (not only for appreciation but also for income property, counseling on managing a real estate portfolio, related financing and tax issues, etc.);
- Negotiation;
- Transaction facilitation;
- Financing, affordability issues;
- Market conditions (what is changing, impact on values, leverage, etc.);
- Specialization … honing in on certain market segments and becoming the expert, trusted adviser;
- More responsive, sophisticated, multi-channel, expert communication, using technology to be more productive and to enable personal relationships but not to replace them;
- Transparency — helping consumers be in control by showing them what is happening at every step;
- Honesty, advocacy, putting clients first.
All of this can be summed up as "competence, connection and character." These skills have been cursory and superficial in many cases and will require much greater depth in the future. To some degree, we are looking at a paradigm shift in not only the education agents will need to have but the scope of what a proficient agent can and should be doing. This differs from the days when agents were basically taught not to go out on a limb and give recommendations for other vendors or advice deemed to be the territory of lawyers, accountants or inspectors.
I believe that the agent of the future will have to be versed in all of these areas, studying and developing credentials to expand their knowledge base to be the true EXPERT. This will be the ultimate differentiator, causing the best to control many more transactions and to heighten the value of brokerage firms which foster this kind of training.
Q: How will real estate advertising dollars be spent in the future? How will real estate marketing be different?
Dollars spent on traditional classified advertising will continue to diminish and ultimately disappear. Print will still be a factor, but it will be brand advertising designed to differentiate the company or associate and drive Web traffic.
Online advertising dollars will be deployed less for paid banner ads than for technology and programs that produce organic search results (for example, content creation that supports long-tail searches and blogging) and social networking strategies that can be equated to "online farming" to initiate consumer relationships.
Data analytics will also be an area of marketing investment in the future to help real estate firms identify their best future prospects based on data they have in their possession, matched with database intelligence applications.
The balance will depend somewhat on the age and price points of the target market being sought, and the key is measuring every marketing dollar to determine what produces results — something that typically has not been done effectively in real estate.
Pam O’Connor is president and CEO for Leading Real Estate Companies of the World, a global network of about 700 real estate firms with 5,500 offices and 170,000 sales associates in 38 countries. Click here for more information about the Roadmap to Recovery project.
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