Skip to content

Posts from the ‘AgentThink’ Category

15
Jun

The Battle Lines have been Drawn between Service and Price

case studyAwhile ago I was speaking to a friend of mine about diapers. Yeah, that’s an odd way to start a blog. More specifically we were talking about all the diapers she was going through and how grateful she was to Diapers.com for the speedy delivery and awesome service. I had to admit I never heard of the company even though they have been around for about 7 years or so. Thankfully my diaper changing days are well behind me. The fact is that this was a company that came out of nowhere and turned into a half a billion dollar company. I asked my friend about it. The first word out of her mouth was ‘service’. I decided to take to the internet and do a little research on the company and lo and behold I found some interesting details that parallel the real estate industry closely. Maybe I should be more specific. They way they ran their business is the way I want to run my business.

Consider that Diapers.com had lots of competition. They knew they couldn’t win on price but they recognized that having a baby was a challenging time in everyone’s life. Sleepless nights and general chaos and mayhem. Mothers needed help, assurances, guidance, and faith that, when ordered, the diapers would arrive on time. By their very nature diapers are heavy and bulky and expensive to ship so Diapers.com decided that they did something different. They couldn’t compete on price so they poured all their energy into customer service. They believed that their brand would only be as strong as their relationship with the consumer. They poured their efforts into shipping and tracking software, creating supply chain efficiencies and using data to anticipate the needs ahead of time. If they didn’t make money on their first order, they bet on the long-term strategy… build trust and the money will come. The strategy paid off as they figured that 35% of their business came as a result of word-of-mouth. As a start-up, the two founders boot-strapped their business part-time for a few years working nights and weekends. In fact they didn’t do any real marketing until 3 years after they launched. Consider other internet businesses that build a website and pour millions of dollars into marketing in order to gain traffic then try to figure our how to make money from it.

To me this is the ultimate business case for service over price. We can learn a lot from other’s experiences. In real estate we are trusted to help our clients buy or sell their largest asset. For the busy or uninitiated, they want it to happen quickly with the least amount of hassle and for the most money if they are selling (and the least if they are buying). Ok so maybe my title is a bit over dramatic. In the end, I believe there is a place in our world for both sides and quite frankly the customer should have the opportunity to do it all themselves if they so choose. At the end of the day however I think that an agent’s referral business comes from them doing a great job and building and maintaining their relationships with their clients and not for doing it for less money.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

12
Jun

Is That Innovation Or Just a Good Idea?

mousetrapThere has been a lot of talk about innovation within the real estate space these days so I thought I would throw in my two cents on the topic. Innovation is all around us, and not just in our industry either. At the core I’m a big fan of innovation. I remember being mesmerized listening to Luke Williams the professor of Innovation at NYU speak on the subject. The first question, of course, is why do we innovate? What makes us decide to build, for example, the metaphoric story of a better mouse trap? Well for some its purely about making money. For others it’s about doing a better and faster job of eliminating mice in your house.

Taking the mouse trap idea full circle, a lot can be said about innovation. We know the common snap trap works well but there are down sides. Sometimes you get a clever mouse who figures out a way to beat the trap, other times it only catches a leg or worse, creates a bloody mess. Still, the trap is fairly effective so people buy it. Then someone comes along and builds a trap that is 100% effective at killing mice, plus there is no mess and no need to bait the trap. You never see the mouse but you know it is dead. But is that innovation? In doing a bit of research on the subject I found an over-riding theme about innovation…it doesn’t become true innovation until the majority of people adopt it. This, in my mind is a powerful message. If we think about the mouse trap again, one could argue that the new mouse trap cuts the spread of disease and reduced allergens in large urban centres and ended up saving billions in health care costs. Whammo. Innovation. But if it doesn’t do that it’s not innovative, it’s simply a good idea.

Another earmark of innovation is that it often trades something we have grown to accept with a new idea that people rush to because it saves time or money or both. It starts off as a small idea and grows. Innovation sets a new standard for how people live and work. Then it becomes the new standard until someone innovates again. Think about it, there are any number of innovations out there that we now take for granted…electricity? Wifi? You get the picture. Innovation is ground breaking, earth shattering and life altering. In the end it requires someone to stick their neck out and risk everything. As it relates to the mouse trap again one also needs to consider the market place. A new trap idea is not going to work in an area with no mice. Neither will the idea fly if its only a small number of people who need traps and they are spread across a continent. The reality is that while they might really want the new mouse trap they won’t pay a massive premium that would be required to ship it to far away destinations.

There is good news though. One by-product of innovation, or at least those who claim they are innovative, is that they provide, indirectly, a benefit to the competition. Using the mouse trap idea again, the person who designs the better mousetrap had some pretty good ideas but the originator of the snap trap sees those ideas and adapts their trap thus being able to change their existing marketing efforts to include the words “new and improved” while still owning the market for traps.

So I encourage innovative thinking and applaud those that think outside the box. There are only four things that come out of an innovative idea. If an idea has merit, it will succeed on its own and become the industry standard. If the idea is sound the competition will tweek the idea to suit their needs and take ownership of it. If the competition thinks it’s a bad idea they will downplay it and call the innovator a fanatic…. at least until the idea works. Or the idea will fail. Either way, innovations or just plain ‘new ideas” are good things that push us to be better.

Think about an idea or innovation in any industry, including real estate. Will it stand alone as the new industry standard? Can you adapt it and make it work for you? Does it frighten you because at the core its existence threaten your business and you would rather fight it than adapt? or is that idea just plain dumb? Two additional points, new ideas and innovations take time to develop and you can hype a product until the cows come home, but hype is not innovation.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

3
Jun

Is There Value In Giving Free Advice?

free-adviceWe’ve all been there. A guy is talking to another guy at a party and it turns out that the first guy is a doctor. The second guy asks him about a pain he is having. What is the usual response? “It’s most likely nothing but if the pain persists then go see your doctor”. I get the feeling that it’s part of medical school training. Deflect the question….don’t answer the question…under any circumstances. Actually, there are variations of this inquiry from a member of the public to someone in any profession whether it be lawyer, accountant or dentist. The responses are often non-committal thus proving the point that free advice is worth exactly what you pay for it.

So why don’t we have a canned responses to the millions of questions everyone asks a Realtor? “What’s my house worth”?, “What did that house sell for”?, “Any good deals out there”?. The list goes on. The truth is…we probably think we have to. I mean if I don’t give it them, they’ll just get the answer from someone else. Does that essentially mean that we don’t see value in what we do for a living? No, I don’t think so. I would look at it differently. Part of the reason I sell real estate is to help people buy or sell a home. It’s the perfect job. The satisfaction, when you do a good job, is off the charts. I like to help people. The problem is that some of us don’t know when to stop.

A few agents I talked to said that they are happy to give advice but it is important to recognize the signs that you are being mined for information and act accordingly. You have to ask yourself if that casual curiosity turned into something more? If it has then it’s time to move on to the next phase of the conversation… “lets meet early next week, it will give me some time to do a bit of research so I can give you the RIGHT answers”. In this conversation the execution is everything. Stopping them in their tracks and postponing it to a later time and day makes the encounter serious. The truth is that there is value in giving free advice. Helping people is in our DNA, just don’t let someone take advantage of your knowledge.

mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.

Follow

Get every new post delivered to your Inbox.

Join 4,987 other followers

%d bloggers like this: