Prepping for the New Year

It's that time of year. A time to review 2008 and preparing your business plan for 2009.

Whether your a Mac or PC user, or prefer online to computer-based systems, you probably have all - or most ;) - of your activities in some calendar. I have an iPhone and use google calendar along with Microsoft Outlook Exchange and Apple Mail. They all get "synced" up and make life much easier.

But the most important thing is to match the goals you may have set for 2008 with the activities in your calendar. And, if you're really enterprising, then match your calendar with your checkbook. A very successful entrepreneur/mentor of mine taught me the value of this activity. He said, "You can tell if you've invested in your future or wasted your past by matching your goals with your calendar with your checkbook.

I've taken that concept and added a little to it: my values. I believe that when your actions are consistent with your values AND calendar AND checkbook, your life becomes filled with power and strength. You may not "get all you want". But you'll surely be better off than not doing anything at all!

Whether you're an independent contractor or employee, I urge you to take the time to do this valuable activity.

For more information about how to set goals, take a look at http://www.mindtools.com.

The Market's Going to Change!

No. This post isn't what you think it's about.

This is really about how the residential real estate market is going to change as a result of products like Point2Agent and ListHub. These products enable listing distribution to some of the most popular consumer websites - like google, Yahoo Real Estate, Trulia, Zillow, et. al., - with the primary objective of getting more eyeballs to the listing.

But, really what does this mean?

I believe it means significant change to the existing real estate business models: the brokerage business model, the independent contractor agent, and the MLS's.

Right now, listings are owned by brokers - not the agents that actually have the relationship with the buyer and/or seller, nor by the homeowners themselves (owners sign their property listing information ownership" over to brokers when they sign listing agreements). Agents, as well as consumers, generally don't understand this point.

For the benefit of consumers, should this whole model change?

Marketing Basics 101

Customer-Centered Brand Management

In a future set of blogs, I'd like to discuss how brand management can help agents and small brokerages compete in a world of consistent change and down markets. For now, here's an article from the Harvard Business Review for your edification.

Key ideas from the Harvard Business Review article by Roland T. Rust, Valarie A. Zeithaml, and Katherine N. Lemon

The Idea

We all know that to boost profits, we must grow customer equity—by building loyalty and broadening our offerings to fulfill our customers’ emerging needs. But though we “talk” customer focus, we don’t “walk” it. Instead, we strive to build brand equity—assuming sales will follow.

Consider General Motors’ Oldsmobile brand. As Olds buyers aged, GM created ad campaigns intended to lure younger buyers to the existing brand, instead of focusing young buyers’ attention on a different GM car or launching a new brand geared to their tastes. Despite GM’s costly efforts to refurbish the brand, Oldsmobile’s market share sputtered from 6.9% to 1.6% during 1985 to 2000.

How to avoid such scenarios? View your brands in a new light: They’re not your raisons d’être you must defend at all costs. Rather, they’re tools for creating and cultivating profitable, long-term relationships with customers.

To put your brands in their proper place, organize your business in new ways: Assign people to manage customer segments, not brands—then give them the strings to the marketing purse. Create brands that satisfy increasingly narrow customer segments. (Think men’s and women’s vitamins.) And retire ineffective brands.

Brands come and go, but your customers must remain. When you put brands in service of your customers, your customer equity and profits soar.

The Idea in Practice

To put your brands in service of your customers:

Create the Role of Customer Segment Manager

When brand managers control your company’s marketing resources, they may persist too long with a brand that has lost its punch. To ensure that decisions based on customer relationships trump brand-based decisions, create or strengthen the role of customer segment manager and allocate resources to that function rather than to traditional brand managers.

Build Brands Around Customer Segments, not Vice Versa

Differentiate your brands by target customer segment more than by product features.

Example: At Liz Claiborne, the world’s largest women’s clothing company, each customer segment has its own named brand and personality—such as Dana Buchman for professional women, Ellen Tracy for sophisticated but casual women, and Elizabeth for plus-size women. The lines are so strongly differentiated by brand, fit, and style that few consumers know they’re made by the same company.

Make Brands as Narrow as Possible

Use advances in technology and customer information to tighten each brand’s focus on increasingly narrow customer segments. Witness the television channels geared specifically to Latinos, golfers, senior citizens, African-Americans, women, and gays. Tighter focus enhances a brand’s clarity and value—in customers’ eyes.

Know When to Hand Off Customers to Other Brands

Don’t spend disproportionately to hold on to a brand’s customer relationship if customers fit more naturally with another brand in your portfolio.

Example: If a longtime customer of Fairfield Inn—Marriot’s budget hotel brand—begins traveling more frequently, Marriott might use special deals to invite him to switch to its higher-priced Marriott brand. The company would forfeit the Fairfield Inn brand relationship for the higher-value customer relationship with the Marriott brand—understanding that future profits aren’t driven by repeat business at Fairfield Inn but by customers’ purchases across all Marriott brands.

Retire Ineffective Brands

Sometimes a brand becomes very unattractive to a customer segment. Reversing that impression might be prohibitively difficult. Instead, retire brands that no longer have avid customers—even if overly aggressive brand managers want to protect their fiefdom. Nabisco, for instance, phased out its Mr. Salty brand when the public became concerned about the ill effects of too much sodium.

How Agents should justify their commissions

This is an interesting article by Bernice Ross, CEO of RealEstateCoach.com. It describes the types of services that a listing agent should provide in order to earn/justify their commission.

Here are a couple of items in her proposed marketing plan:

• 800 number IVR system
• Listing syndication
• Video syndication
• Using online tools to redecorate the home
• Track the activity and provide real analytics of the marketing efforts.
  

I've been in the industry for many years and I can honestly say that I haven't seen many agents who perform these services consistently.

Do agents provide these services? What services have you seen agents provide? Do you think they deserve their commissions for the service they provide?

What are your thoughts?

Welcome!

This is the inaugural post for the Real Estate Market Observer. While we are focused on obtaining and publishing information on the Northern California Real Estate Market and how that market works, we also recognize that the "way" real estate business is conducted is rapidly changing. To that end, we will seek out and find new methods for professionals to learn.

But we will also, hopefully, educate the consumer about the real estate industry. We will attempt to show consumers what methods and strategies true professionals are using to help their clients either buy or sell their property.

We invite your comments, suggestions, tips, hints or information. We hope that there will be a lively, ongoing dialog that will educate or at the very least, inform.

In the final analysis, our true success will be a real estate industry that is more transparent; one in which practitioners and consumers will benefit from more transparency.