Central to the existential crisis real estate agents across the world are facing is this very problem: the job of a real estate agent is to market property; but everything they project shows an inability to market themselves or their property in the 21st Century.
In the US, real estate agents hide behind licensing and regulation. In the UK, behind 'high street' shopfronts.
The world is getting more open, more democratic and people are becoming less patient with mediocre. The best example of this is people clicking away from slow loading websites. It seems fickle, but that's just the truth of the modern human.
But there is another universal truth, that is ever more true in an under-educated, overly consumer world: people are easily sold to.
Before going any further, let's substantiate that agents are not very good at marketing:
1. Marketing is the art of understanding the customer and market, and delivering products and services to fit. It doesn't take long to hear how much the public at large dislike, or even hate, real estate agents. That's certainly not good marketing. The 'service' hasn't changed in a very long time. The internet exists, it's cheaper to distribute anything, yet the costs and service levels for real estate transactions are largely the same (although there is significant downward price pressure from the sheer volume of competition).
2. Websites. Oh dear are real estate websites poor. For one, they aren't focused around real estate. Most real estate agents' websites act as 'puff' pieces, desperately trying to tell the world how professional and locally competent that agency is. In the UK, the About Us secction usually has no information on the people behind the agency. Embarrassing. It's only partly the fault of agents: they aren't exactly provided with the tools to create modern websites. Most 'software providers' sell template websites. And those templates are all same-samey. Just to highlight the dire state of agency websites, here's a recent post highlighting the best agency websites: http://simpliproperty.wordpress.com/2014/07/17/five-amazing-estate-agency-websites-and-why/
3. Social media is an incredible innovation of the 21st Century. This mass media breaks down geographic boundaries and allows an incredible level and volume of conversation. Yet agents on social media are so uninteresting, they only appeal to each other. Brands can build real value with social media, as evidenced by the recent World Cup (http://thenextweb.com/socialmedia/2014/07/16/power-live-content-world-cup-social-media-winners-losers/). Even the beheamoths like Rightmove and Zillow have relatively little social media engagement. They're just not talking sexy.
4. Digital marketing allows whole businesses to be based off of no real world presence or advertising. Yet online agents have made no headway to dominate with Google search, social media or general content marketing. A quick scour of twitter shows many people discontent with traditional agents, yet online agents aren't savvy enough to capture this sentiment in a broad manner. Online estate agency should be a winner takes all market; it's not local, it's about competence and branding.
5. Branding makes the difference for most dominant service companies. Does anyone know what IBM does anymore? It doesn't matter, people still respect the brand and hear often from IBM about smart computers and smart cities. Agents' Mutual sent out brochures to agents this week. A flyer in that pack had logos of many signed up agencies. It's a branding agency's dream: lots of clients with no idea their brands don't speak to their customers. There is hope, however, with the likes of Cluttons and Chesterton's in the UK instigating root-and-branch re-branding exercises. Here's the Agents' Mutual flyer with requisite member logos on the final 2 pages: http://email-media.agentsmutual.co.uk/agents-mutual-email-leaflet.pdf
6. Property portals are now worth more than the largest real estate agents. It's true of Rightmove in the UK and is recently true of Zillow in the US, as they briefly overtook Realogy in market cap. They are certainly more valuable and useful in the eye of consumers. When property owners appoint an agent, they want to know whether the agent uses the most prominent portals. The market doesn't lie: the future isn't the current crop of real estate agents. Here's a quick overview of the Price-to-Earnings (P/E) ratio, which is an indicator of 'market perception'. The higher the P/E, the better the market perceives what that company is doing and where it is going:
Rightmove: P/E: 29 (£2,130m market cap on £140m revenue)
Savills: P/E: 15 (£762m market cap on £905m revenue)
Zillow: P/E: 144 ($4,890m market cap on $225m revenue)
Realogy: P/E: 19 ($5,280m market cap on $5,340m revenue)
There is a point of interest here: internet usage is exploding. Just because Rightmove and Zillow dominate their respective markets right now is no guarantee that they will in 5 years time. The world has caught the mobile internet bug and there is much innovation yet to come. Any guy in a garage could potentially build the next great consumer property portal as agents and MLSs lose the grip of control on listings data.
What I hope people take out of this post is opportunity. There is no agency in any state or country, or even town, that dominates. There's a real opportunity for a real marketeer to step up and take this very large market by the scruff of the neck and say, "I understand you."
People are easily sold to, but not everyone is a decent salesperson. Agents will be needed to sell most properties; people sell property, it doesn't sell itself. Technology won't replace agents, but it certainly will facilitate the replacement of the current crop of agents.
The irony in agency is every agent thinks they are the best, most capable to market your home. The numbers tell a different story.