I was invited to give a vision presentation this month for the real estate brokerage company where I hang my broker’s license – Keller Williams Coastal Properties. Each year the management committee, ‘ALC’, gathers to develop the business plan for the upcoming year. The process is probably no different than every other corporation, enterprise, partnership or entrepreneur (or at least it should be) as they go through their annual planning right of passage. I thought it might be interesting to open up the process so these ideas are not discussed in a bubble – especially my bubble.
As a realtor presenting a Corporate vision to business owners seems counterintuitive to me. I believe our journeys are shaped not by the conclusions we draw, but the questions we ask that define our thought process and impact how we act. So standing in front of peers suggesting trends and opportunities in our marketplace seems a little odd. Oh well we’ll give it a go, consequently, I have been thinking about several questions that business professionals (regardless of the business, profession or its size) should ask within their organization. My other premise is that the development of vision and goals are an ongoing, living, dynamic process. Business planning is an evolving process that morphs as markets develop or evaporate, customer needs change, economic realities force new realties, and technology creates new platforms (or in some cases eliminates certain market opportunities).
My hope is that you will share your own questions and thoughts with me. I want your feedback because these thoughts are based only on my experiences, conversations with other professionals and consumers, and admittedly my own myopic research. Regardless of whether you are a consultant, sales person, entrepreneur, middle manager or executive in a large corporation the process of thinking through several of these questions will be worthwhile. So please join me in this process …
A Few Warm Up Questions & Considerations:
· What business are you in? In some cases the answer seems simple – realtors (I’m using realtors as my primary example because I am a realtor – sorry) are in the business of representing the needs of buyers and sellers in the acquisition or sales of real property. Is that it … or is our service more expansive than that? Case in point, some contend that if AOL (concluded they were a media company controlling content) asked and answered this question differently they could have been the equivalent of Facebook ten years ago. Or if Yahoo answered this question differently, then they would be the Google of today (instead they are struggling to survive). So what business are realtors in … the phase that keeps creeping into my consciousness is ‘a concierge platform providing a la carte real estate services and information.’ Operating in an open system the realtor can co-create the scope of services that is ultimately defined by the customer. Realtors are more than just order takers, negotiators, sales people, transaction coordinators, knowledge based companies; instead we can be a human ‘aggregator’ of services and connections that potentially eliminate the personal, business and legal bottlenecks that are inherent in the process and enable each touch point to be more fluid in delivering the desired results. Although a few individuals may currently view their role in this capacity; I would challenge this belief because they still demonstrate a degree of ‘fear based’ languaging tricks to motivate or control their clients and/or the process. The majority of realtors and brokers come from the competitive business model which is based upon fear and scarcity – listen to the ‘fine print’ in a listing presentation and you will instantly get the point.
· Who is your ‘customer’? Ah, this is where I will depart from traditional brokers’ assumptions. The typical broker views their clients as being the individual realtors (agents and associate brokers). This is a very limited view of the reality of the new economy. I define our ‘customer’ as every person that touches the entire transaction – agents/brokers, buyers, sellers, contractors, employees, independent contractors, assistants, service providers, transaction coordinators, escrow, title companies, lenders, etc. Each person that touches the transaction has the ability to drive the ultimate experience of the buyer and seller, and has the ability to drive future opportunities. If our view of ‘customer’ is expanded than we open ourselves up to creating ‘raving fans’ (see Ken Blanchard’s book Raving Fans) with every person along the way capable of fundamentally altering our business. Every time we take for granted a person involved in a transaction we potentially miss an opportunity to grow our business, develop another relationship, and enter into another ‘conversation’ that may lead to new opportunities through people.
· Where is your revenue? Traditionally for a real estate company or realtor revenue comes in the form of commissions. Consider for a moment if you were forced to assume a ‘zero-based budgeting’ model in your business; then how would you create revenue opportunities. A few business pundits use this term when Companies’ generate revenue through the ‘side-doors.’ For example, Google collects zero revenue (they actually give this service away for free) in its primary business – web based searches. Instead Google collects revenue primarily through advertising. Why should other ‘old line’ or established businesses consider ‘zero-based budgeting’ or assume collecting no revenue for a primary service or product (think newspapers, book publishing, travel agents, and the list continues to grow every day) – because the expansion of the Internet and the ‘new economy’ may threaten their ability to charge a fee or as large a fee as the business model evolves or matures.
So where does that leave realtors – one brokerage company in Seattle collects revenue as a ‘fee for services rendered’ similar to an attorney or CPA (hourly charge for time). I don’t think this model has legs over the long term. How about offering an a la carte menu for clients to pick from and pay a sum negotiated for each service selected. The realtor and broker could offer a comprehensive menu of services that is completely customer driven with fees associated with each menu item. For example, a seller could choose to list their property utilizing the full service option (the preferred option for all ‘full service’ realtors because the typical fee collected is between 2-6% of the transaction value), or they could choose to utilize only the MLS listing feature and the transaction coordination option. In a different situation maybe the client only wants to utilize the escrow services of the broker.
This paradigm shift offers several interesting twists to the traditional model. First, the client creates the level of service he/she wants from the ‘service platform’ – they in effect ‘co-create’ the service provided by the brokerage company. Secondly, this provides the client with real choices – the very essence of a menu. Next, the client gets to control, to a degree, the costs of a transaction (typically the sales costs of a transaction ranges between 7-9% of the sales price) depending upon the service items selected. Next the realtor has a competitive advantage over other brokerage companies or sales models – regardless of whether the client is considering a full brokerage company, discount broker or even the ‘For Sale By Owner’ option. In large part, this menu option will over the short term take ‘price’ off the table and shift the conversation to what level of service the client can expect from the broker/agent. Lastly, this menu approach offers an opportunity for greater ‘collaboration’ between realtor and client – which in the future may be how many realtors prosper (collaboration with everyone who touches the transaction – not just between realtor and client).
In addition, the realtor could provide a ‘cloud’ of services (term borrowed from the concept of ‘cloud computing’ – see the SalesForce.com model) that is scalable and configurable to the various market niches (notion of ‘mass of niches’ as detailed by Mark Penn in Micro Trends book) based on customer needs. As the realtor creates greater market penetration from its ‘platform of services’ into the various communities and vertical markets this access portal becomes a valuable resource for other service providers (title companies, marketing companies, insurance agents, contractors, financial planners, etc.). Through this service platform other companies will be able to collaborate with the realtor and pay for access to the community or database (either in the form of referral fees, advertising, joint marketing partnerships, etc.). This is just one idea for revenue opportunities from ‘side doors’ in the new economy.
So being Labor Day, I challenge you to examine your business’ vision/model. Thinking outside the box for a moment, the obvious answer to these questions may not insure that your model will succeed in the ‘new economy.’ So take these questions for a test drive, and see how you might add value to your customer’s experience, and how you can create ‘raving fans’ within your platform of services. Also, please remember that this blog is really an invitation for an ongoing conversation between us!
There are several other questions that I have been bantering around in my head and with a few other friends; however, their detailed consideration, albeit important, deserves another forum. So for the sake of brevity, I only list the questions below to spur ongoing conversations with you. The following questions are in no way intended to be exhaustive for the purposes of your planning process; but they may be a starting point …
1. What is our business model? Are we a business model/corporation that is based upon competition (scarcity); or a model based upon the heart of collaboration/service (abundance – beyond the marketing or customer service rhetoric)?
2. How can we create a model that encourages and enables an on-going dialogue with all of our customers to co-create a ‘service platform’ that truly delivers real value to the customers and communities we serve?
3. Where is our ‘value proposition’ (some would ask “what is our value proposition”)? How is our ‘value proposition’ unique and add value to our customers?
4. What is our current Company culture? What do we want our Company culture to be?
5. How do we create ‘elegant organizations’?
6. How can we enable ‘elegant organization’ for each of our ‘customers’?
7. How do we enable on-going conversations with and between all of our customers so that we remove all informational bottlenecks and make all touch points more fluid?
8. What is our ‘platform of services’ that we offer so as to create value for all of our customers?
9. Where are the collaboration opportunities in every ‘service platform’ offered so that we may leverage all of our resources, talents and opportunities?
10. How can we cultivate the culture of collaboration and abundance across all business segments within and outside of the Company?
11. How can we collaborate with all of our ‘customers’ to co-create a more comprehensive ‘value proposition’ that truly serves the needs and desires of our customers and communities that we serve?
12. Where are our customers; what do they want; when do they want it; and how do they want it?
13. How do we really LISTEN to our customers?
14. What is our customers’ experience of the services we provide?
15. How can we create ‘raving fans’ across all business segments and with every ‘customer’ of the business?
16. How do we create and sustain total ‘transparency’ with all of our customers in every service platform in our business?
17. What communities do our customers participate in?
18. What communities and micro-markets do we serve?
19. How will we serve the needs of our customers and communities we serve in the ‘new economic’ model of today and beyond?
20. In the communities we serve do we, and if so how do we, enable them to talk; enable them to share what they know and need to know; enable them to support each other; enable them to do business together; and even enable them to socialize? (A friend once shared that true relationships develop when people have the courage to pray together, share a meal together, and laugh together – simple yet profound insight)
21. Are we being ‘authentic’ in all of our services and interactions with our customers? If not, why not?
22. How do we enable innovation within our Company and the business model?
23. What is the ‘legacy’ that we are creating for the Company and our customers?
24. How do we get ahead and stay ahead of the technology curve so that we truly serve our customers where they are at now and where they are headed in the future?
25. How does the technology that we utilize support the vision and direction of our customer driven service platform model? How can we create a seamless, synergistic technology platform that is user friendly, economical, functional and creates tangible value for all of our customers?
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