Everyone wants to believe that their prosperity is 100 percent earned. We work hard. We do the best we can. When we succeed, it’s because we’re fantastic, not because our industry is fantastic, right?
Usually, that’s the case. But history shows us that entrepreneurs and business owners are actually at their most vulnerable when times are good.
When it comes to the current residential real estate market, universal successes have been masking individual failures. We’ve been on an excellent ride for the past 10 years, but things are about to change.
I’m not saying that we’re in a bubble, and the real estate market is about to crash, far from it. Since the pandemic began, I’ve made the case repeatedly that this isn’t 2008. The real estate market is healthy. The real estate industry is not. Because too many agents, team leaders, and brokers have a huge blind spot in their business model.
If you have it, too, then this is the tough love you need to hear: The leads you’re buying are putting you out of business. If the majority of your transactions aren’t generated from a platform that you own, then you won’t be around in two years.
We’ve seen a massive redistribution of impressions and eyeballs in the past few years. In effect, most people have outsourced their marketing departments. If you want to know how dangerous that is, look at what happened with restaurant delivery services during the pandemic.
When we had to shift to a pure takeout and delivery model, what happened? Consumers wanted to support their local businesses, so they downloaded third-party delivery apps to order and pay easily. Those apps charged 20-40 percent for their services (with some cities regulating to lower percentages), so restaurants lost money fulfilling meal orders.
Restaurant owners told me over and over again that this model wasn’t profitable for them, yet they had no other choice but to adopt it because that’s where the eyeballs and impressions were.
The apps had all the power. Sound familiar?
Agents used to be able to say, “I’ve got the listings and proprietary data.” Now, consumers and Big Tech have the data, so what’s your value? If you’re swiping your credit card every day for a third-party company to send you leads, then you’re in the same position as restaurant owners during the pandemic. Third parties control your destiny, not you.
Thankfully, there are steps you can take to eliminate this blind spot. Here are my top four:
1. Find out if you’re actually the visionary leader you think you are
You’d be surprised how often agents and team leaders think they’re visionaries when they aren’t — or they are visionaries but need a partner to bring their ideas to life.
At Kris Lindahl Real Estate, we use personality and leadership assessment tools to make sure we put the right people in the right seats. It’s fundamental.
2. Build the dominant brand in your market
You don’t have to take on the tech companies, but you do have to beat the other agents and teams in your market. That means the days of promoting yourself through calendars and refrigerator magnets are long over.
You have to build a dominant brand, and if you don’t have the creativity and know-how to do it yourself (which most people don’t), you need to hire someone to do it for you. That’s one form of outsourcing that works.
3. Offer a convenience-based solution
Agents get frustrated when they see friends in their social feeds post photos of sold signs. But you can’t expect blind loyalty. If people don’t use your services, it’s not their fault. It’s because you’re not offering a convenience-based solution that justifies your commission.
4. Cancel your third-party leads
You have to create impressions that come directly to you, not through a third-party system. But you can’t do this without doing the other three things first (plus a lot more).
Two years from now, many people are going to look back at this moment and say, “I should have seen it coming.” Look at the industry news. Look at the acquisitions. Look at the consolidation. Companies are vertically integrating, and it’s not going to stop.
In response, too many agents are still buying the same leads and looking just like everyone else in their markets. I know how hard it is to differentiate a brand in a market of over 7 million people, and I’ve made tons of mistakes along the way. But I’ve definitely learned that you don’t get there by doing anything. You don’t get there by chasing shiny balls or doing something for a few months and then stopping. And you definitely don’t get there by outsourcing your leads.
Here’s my challenge to you: Look at the amount of money you’re wasting on third-party leads right now, and ask yourself if you’re willing to do what it takes to own your impressions, earn eyeballs and build the dominant brand in your market.
If you’re not, then you might find that real estate isn’t the industry for you — especially over the next two years when things get a lot harder