From learning how machines build trust, to putting the customer at the centre of our business – and insights from online drug dealers – the REIQ RealTech18 conference challenged participants with some new perspectives. Here’s what I learned.
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Data is more trustworthy than real estate agents
The internet of things is joining objects to the internet and capturing data, said Michael Rosemann from QUT. As such, inanimate objects are now able to make better decisions than humans can. There are now live examples where insurance is chosen by your car based on the best rates and driving history, and your electricity provider is chosen by your house based on your energy usage – and can be swapped quickly should it change.
“The technology is now ahead of humans,” said Rosemann.
How does this affect real estate? Well, it means the machines are evaluating home values better than agents. As such, a property valuation is going to be a hygiene factor for agents – it won’t differentiate you in the market. It’s just about fulfilling your obligations. To stand out, you need to surprise and delight your customers and do things they did not expect.
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Real estate is moving onto Facebook by default
While Facebook has no interest in become a real estate company, says Nigel Dalton, chief inventor at Realestate.com.au, the fact that our customers are on the platform, together with the huge data analytics that sit at the back of Facebook, and the way people search on Facebook means property services are already appearing within the big blue F.
Dalton advised agents to start checking out MarketPlace on Facebook as properties to rent and sell are starting to appear there in considerable numbers. Marketplace offers insights into private and offmarket sales as well as private rentals, as well as being a rich audience for agents in the space. It could also be something that threatens the real estate portals.
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Empathy is the key to understanding customers and gaining trust
Having empathy is the fastest way to be inspired and is the key to understanding what our customers are experiencing, said Fiona Malone from Google.
But as an industry, we’re not great at empathy, and the outcome is a lack of trust.
“In the future, people will compete on trust more than value and price,” said Rosemann.
Rosemann argued that we’re defining value far too narrowly, making it only about price. He defined trust as having “confidence in your relationship with uncertainty” – a killer definition for any agent guiding a home owner through their first purchase or sale.
In the new digital world, value will be identified when the quality of a service is greater than its price, when the experience is greater than its convenience and when the social benefits outweigh the potential damage.
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Drug dealers give better customer service than real estate agents
If you want a lesson in great customer experiences says Nigel Dalton from Realestate.com.au, check out how drugs are sold on the dark web.
He’s joking. Sort of.
Australia has more drug dealers per capita than any other country in the world and (I’m taking his word for it) the customer service is unprecedented. Drugs are delivered to your door in vacuum sealed post packs through normal mail. There are free samples, volume discounts and even fair trade and origin and purity certification.
Dalton hastens to add that he knows this because he’s been researching Dark Web technology in association with a Telstra internet security team. But the real estate industry could learn from an industry that once literally stood on street corners but is now fully digitized and understands the value of surprising customers with the services it offers and importance of repeat business.
As an industry, we need to stop seeing customer service as something that we tack on top of our businesses, or as an add on, or assess its value by how many phone calls we return. Instead we need to put our customers at the centre of the experience we provide and innovate to improve that.
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We’re going to need a bigger box
Too often we are exhorted to ‘think outside the box’ said Michael Rosemann from QUT. But he argues this is the wrong way to look at it. Instead we should get a bigger box and instead of trying only to solve problems in our businesses, explore the possibilities that our businesses could engage in.
Rosemann argued that while problems are visible, opportunities are invisible, but we tend as humans to try and solve what we can see, rather than imagine what is possible.
“The world is opportunity rich, but we can’t see it,” he said. “We need to create businesses around people and services to people, not industry boundaries.”
A real estate industry that was focused on opportunities would look at what kind of business you could operate if you were a trusted home service provider across a range of services for the life of someone living in their home – not just at the time of sale.
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Hug a hipster
As an industry, we are far too concerned about what our competitors are doing, when real disruption comes from those outside the industry seeing fresh new ways to do business and change the dynamic completely, said Rosemann.
We tend to hire experience – ie: people who are used to doing things the way they’ve always been done - when what we should be looking for are skills that have currency to deal with current and new challenges.
On this theme, Sarah Moran identified that great startups have three kinds of people in them – Hackers, Hipsters and Hustlers. The hackers are the developers who write the code, the hustlers are those who evangelise and make the sales, while the hipsters make the customer experience beautiful and easy.
In real estate, at this stage in our disruption, it’s time to embrace the hipsters and start designing our businesses with customers at the centre of them, not as someone who is serviced on the side while the hustlers dominate, and the hackers disrupt.
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We need to move higher up the awareness chain
At the base is digital literacy where we are learning how to use the technologies and starting to become familiar with what’s on offer, explained Rosemann.
From there we start to exhibit more digital behaviour becoming comfortable with the new norm, and from there, the highest level is digital elegance – where digital experiences are expected and we become frustrated when we are forced to behave in an ‘analogue’ way.
This is a powerful model for the real estate industry, where too many participants still struggle to master supplier technology that has been in place for years, where we digitally-led alternatives are scoffed at and where we think clients who want to use messaging platforms or sms rather than a phone call are just plain stupid and wrong.
Hanlon from Google pointed out that at Google 75% of training is driven by staff helping and coaching each other. Improving skills is seen as something that everyone is accountable for at Google - it’s not an external obligation that needs to be persevered through.
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It’s the business model we need to worry about, not the technology
For the past five years or so, we’ve been talking as an industry about how technology and digital disruption is changing real estate. And we’ve focused on the gizmos and gadgets that are making life faster, cleverer, connected, stressful, convenient and frustrating will force us to change what we do by making us do more to earn our crust for less.
But for me, the biggest take out from RealTech18 was the insight that if we’re really going to succeed and thrive in this new world (and the one that comes after it), we need to stop focusing on the shiny things and wavering between being dazzled and complaining they are so bright.
Rather, it’s time to focus on the business model. Are commissions the best way to charge for real estate services in a digital world? Or is the legacy of commissions forcing us into behaviours and positions that are becoming indefensible, while new players leapfrog us without their encumbrances?
What could/should replace commissions? Will our revenue streams of the future be one single earn, or a multitude of revenue opportunities. And what would the pros and cons of those alternatives look like?
What do you think? Comment below: