RISMEDIA, March 5, 2011—This firmly held consumer belief is possibly the greatest challenge we face in this business. We are all the same. How unfair! We are all unique human beings, with unique hopes, dreams, skills and talents. REALTORS® are like snowflakes. No two are exactly alike, right?
Not according to the consumer. I’m not making this assertion, but amplifying what the majority of consumers seem to believe. I’m also not blaming the industry. This is a systemic reality. Differentiation—the core objective of all branding and positioning efforts—has been virtually impossible in real estate.
Consider the five categories of differentiation:
1. Product: All the same. Do you want a Droid or an iPhone? They are different. Consumers have a choice. Not in real estate. We like to say that we are selling ourselves, but that’s not the literal truth. We are selling the real estate, and we all have the same inventory to sell.
2. Price: Do you want a slice of pizza or filet mignon for dinner? They both are dinner, but the price is very different. At the risk of getting arrested by the collusion police, I am going to make a statement that is true on its face. There is no price differential in brokerage services. We all charge (approximately) the same commission and charge it the same way (at closing). Obviously, there are exceptions, and for those companies, price is their value proposition, proving my point.
3. Marketing: All the same. MLS + Internet = all the marketing that really matters to consumers. Even in years past, when we all ran display ads in the paper, we were all the same. Rows and columns of houses. The color of the newspaper masthead doesn’t qualify as differentiation.
4. Service: This is where my statement falls short. There is clearly a wide variation in quality of service rendered in this business, but there are two things that make it difficult as a point of distinction. First, everyone says they give great service. Second, the way we define great service is the same, and the services we provide are the same.
5. Contacts: This is the Holy Grail that separates those who succeed and those who languish in the business. Who you know and who knows you. Every top producer I’ve ever met works their sphere. Every training program I’ve ever seen focuses on the book of business. Even now, when social media is the new buzz phrase, it’s still just a new way to achieve an ancient purpose—building your sphere. So incumbency is the ultimate advantage. Market share wins. “I’m #1” is the only marketing campaign that’s ever really worked in real estate, evidenced by how hard we all work to find a way to make the claim. “I’m #1 (fine print: in my office, on Tuesdays in November).”
What if I told you there was a segment of our market where true differentiation is not only possible, but wide open for you? A huge segment—more than one in five transactions nationwide. Over 1 million transactions a year, every year. Well over 5 billion in commissions a year and growing rapidly. Did you guess it?
Residential investors.
They don’t care how many homes you’ve sold. They care that you can analyze cash flow. They don’t care if you went to high school with their sister. They want you to understand the rental potential for their property. They don’t care about awards. They care about your ability to find winners for them.
To say it plainly, when it comes to capturing investors, it’s not who you know. It’s what you know.
Greg Rand is CEO of OwnAmerica.com and former managing partner of Better Homes and Gardens Rand Realty. For more information, please visit www.ownamerica.com.
