Change. It's a Good Thing.
Two posts in other blogs last week inspired the commentary below. The first was the Zebra’s well written op-ed on the Minnesota Association of Realtors open letter regarding competition. The second was the Tomato’s post regarding giving away trade secrets. I highly recommend them.
A good consultant can be likened to a chef. The only difference is the recipes a consultant creates are specific to the palette of each client. We all have the same ingredients at hand to create a marketing mix. It’s the selection of ingredients, how they are used an in what volume that hopefully result in the right recipe. Should that recipe become a trade secret? No, chances are it wouldn’t work for everyone anyhow. It’s our skill in applying our knowledge for each client that sets us apart from the competition.
Disintermediation is a term that has been thrown around for the last 10 to 12 years in this industry. I equate the term to hand-wringing. It’s the fear of change that forces some people to react by holding things close to the vest in a last ditch effort to do things they have always been done. While reading the post regarding trade secrets I found it interesting to hear disintermediation being used on the other side of the real estate fence. It’s usually brokers and agents that join in on the “sky is falling” conversations regarding technology and new ways of doing things.
If you really want to get a great example of sharing, just look at Greg Swann’s posts recently regarding his shift in business models. He’s done everything but upload all of the files and notes he is using to move forward. I couldn't find the link, but one of his posts showed the math based on what he made per deal on average last year and what he could make with his new model (perhaps next year some of the agents in Minnesota will relocate to Phoenix and work with Greg). Will it hurt him? Not in the least. Will it help him? I think it will. If I were a consumer reading his blog I would be intrigued that not only is he sharing a well thought plan, he is putting it out there for comment and consideration by his peers and prospects alike. The posts I have made in this blog recently all point to the fact that no matter what industry we are in, we are going to be forced into a more transparent way of doing things. When car dealers started posting invoice prices did they drive all the other dealers out of business? My guess is that the only dealers that went out of business were the ones that were not willing to adapt and find a new way to make up the margins they need to be profitable. Back in the early 80’s change took place in an industry that is the perfect example of how embracing it and finding new ways of doing things is just a part of business. It also shows how hand wringing and trying to force back change is never a successful tactic. It was in the transportation industry. At the time, all rates for Interstate commerce, the transfer of goods by truck, were established by tariffs. The price was same to ship a load of light bulbs no matter which carrier was doing it.
When the government decided competitive rates would be a better thing for consumers, they gave the shippers plenty of warning. They even decided to shut down the Interstate Commerce Commission. Companies that adapted are still in business today. Many tried to hold on to the way they did things, some that were at once the top of their game, went out of business fast. Remember a company called LeeWay? I came into the industry back then in sales, just when this was beginning to take effect. I worked for North American Van Lines. I was unencumbered by the old way of doing things, my competitors were still in the hand wringing phase. The first reaction to competition in this new environment was to try to discount their competitors into submission hoping that at some point they could make it up after the landscape changed. It never came to pass. There were many times I was able to charge more than my competitors by concentrating on service and getting creative by understanding the most basic business concept of all. I had a cost of doing business, and I knew what kind of margin it would take to make a profit. Believe it or not, this was foreign to my competitors, they only knew the old way of doing things. I remember distinctly telling my customers in my presentations, after your household goods are delivered, we will even go to the trouble of picking up all of the packing materials and paper and take them with us when we leave. I sold many a move on that, even when my competitors were selling against me at a loss. All moving companies take away the packing materials when they leave. In many cases my competitors were so focused on price and discounting that they forgot they were in business to provide a service, take good care of their clients and make a profit while doing it. I moved into management in that industry later and began calling on corporate accounts, it was the perfect time to be in that business, all of the old traffic managers were being fired or retiring because the good ‘ole boy days were over. Do I think the government should step in and do anything about it. That depends. If there is a true case of anti-trust, yes. Otherwise leave it alone let the free market take care of itself the way it always has.
I’m not a Realtor, but I’ve been working closely with the industry for a long time. I can think of many that would disagree with me, but I think it’s a great time to be in the business. As a technology vendor I feel the same way.
Technorati Tags: Disintermediation, Real Estate, Real Estate Technology, Web 2.0, Minnesota Association of Realtors, Bloodhound Realty
A good consultant can be likened to a chef. The only difference is the recipes a consultant creates are specific to the palette of each client. We all have the same ingredients at hand to create a marketing mix. It’s the selection of ingredients, how they are used an in what volume that hopefully result in the right recipe. Should that recipe become a trade secret? No, chances are it wouldn’t work for everyone anyhow. It’s our skill in applying our knowledge for each client that sets us apart from the competition.
Disintermediation is a term that has been thrown around for the last 10 to 12 years in this industry. I equate the term to hand-wringing. It’s the fear of change that forces some people to react by holding things close to the vest in a last ditch effort to do things they have always been done. While reading the post regarding trade secrets I found it interesting to hear disintermediation being used on the other side of the real estate fence. It’s usually brokers and agents that join in on the “sky is falling” conversations regarding technology and new ways of doing things.
If you really want to get a great example of sharing, just look at Greg Swann’s posts recently regarding his shift in business models. He’s done everything but upload all of the files and notes he is using to move forward. I couldn't find the link, but one of his posts showed the math based on what he made per deal on average last year and what he could make with his new model (perhaps next year some of the agents in Minnesota will relocate to Phoenix and work with Greg). Will it hurt him? Not in the least. Will it help him? I think it will. If I were a consumer reading his blog I would be intrigued that not only is he sharing a well thought plan, he is putting it out there for comment and consideration by his peers and prospects alike. The posts I have made in this blog recently all point to the fact that no matter what industry we are in, we are going to be forced into a more transparent way of doing things. When car dealers started posting invoice prices did they drive all the other dealers out of business? My guess is that the only dealers that went out of business were the ones that were not willing to adapt and find a new way to make up the margins they need to be profitable. Back in the early 80’s change took place in an industry that is the perfect example of how embracing it and finding new ways of doing things is just a part of business. It also shows how hand wringing and trying to force back change is never a successful tactic. It was in the transportation industry. At the time, all rates for Interstate commerce, the transfer of goods by truck, were established by tariffs. The price was same to ship a load of light bulbs no matter which carrier was doing it.
When the government decided competitive rates would be a better thing for consumers, they gave the shippers plenty of warning. They even decided to shut down the Interstate Commerce Commission. Companies that adapted are still in business today. Many tried to hold on to the way they did things, some that were at once the top of their game, went out of business fast. Remember a company called LeeWay? I came into the industry back then in sales, just when this was beginning to take effect. I worked for North American Van Lines. I was unencumbered by the old way of doing things, my competitors were still in the hand wringing phase. The first reaction to competition in this new environment was to try to discount their competitors into submission hoping that at some point they could make it up after the landscape changed. It never came to pass. There were many times I was able to charge more than my competitors by concentrating on service and getting creative by understanding the most basic business concept of all. I had a cost of doing business, and I knew what kind of margin it would take to make a profit. Believe it or not, this was foreign to my competitors, they only knew the old way of doing things. I remember distinctly telling my customers in my presentations, after your household goods are delivered, we will even go to the trouble of picking up all of the packing materials and paper and take them with us when we leave. I sold many a move on that, even when my competitors were selling against me at a loss. All moving companies take away the packing materials when they leave. In many cases my competitors were so focused on price and discounting that they forgot they were in business to provide a service, take good care of their clients and make a profit while doing it. I moved into management in that industry later and began calling on corporate accounts, it was the perfect time to be in that business, all of the old traffic managers were being fired or retiring because the good ‘ole boy days were over. Do I think the government should step in and do anything about it. That depends. If there is a true case of anti-trust, yes. Otherwise leave it alone let the free market take care of itself the way it always has.
I’m not a Realtor, but I’ve been working closely with the industry for a long time. I can think of many that would disagree with me, but I think it’s a great time to be in the business. As a technology vendor I feel the same way.
Technorati Tags: Disintermediation, Real Estate, Real Estate Technology, Web 2.0, Minnesota Association of Realtors, Bloodhound Realty
posted by Mike Price at 12:22 PM
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