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The Harsh Lesson for Real Estate Pros: Adapt or Die
The Underwood Typewriter Company did one thing, and it did it well.
Founded in 1895, Underwood produced the first modern typewriter, and by 1939 the company had sold more typewriters than all other typewriter manufacturers combined. In fact, Underwood dominated the industry before IBM was even a company, let alone making typewriters.
While they were the class of typewriter makers, Underwood didn’t do a good job of adapting. The last typewriter with the name “Underwood” was produced in the 1980s.
Last year, well into its second century of existence, IBM earned $80 billion in revenue. That’s even more remarkable given the fact that long ago IBM became a very different company, and earns the majority of its revenue through cloud computing and consulting services.
Underwood focused on their product.
IBM focused on their customer. IBM continues to focus on their customer.
What does this have to do with real estate?
In real estate, the role of the agent and the standard commission structure - and, even how services are offered - evolved because it was the best way to facilitate a real estate transaction. The role of the agent isn’t an end unto itself. And ultimately, the focus is the customer. In other words, those of us who work in real estate exist solely to facilitate an ethical, convenient, compliant transaction between the buyer and the seller.
That doesn’t mean agents don’t provide value, or don’t serve a purpose. What it means is that as the needs, knowledge, and technological sophistication of our customers evolves, Realtors® need to adapt.
You see, at the end of the day, all that homebuyers and sellers want is an efficient and effective means to buying and selling a home. Historically, it’s always required a person to do that, but technology is making this whole buying and selling a home thing much more efficient.
Agents that recognize this fact do not need to fear technology, any more than IBM feared the personal computer. For IBM, the death of the typewriter was an opportunity, not a catastrophe. On the other hand, agents who do not recognize the change coming and adapt accordingly will find themselves on the Underwood Typewriter Company side of the story.
The technological changes in real estate are relentlessly customer-focused, but they aren’t just about customer experience. Back-office technological innovations that increase operational efficiencies also lower brokerage operating costs, and thus, customer costs.
And there is nothing more customer-focused than lowering costs, and any agent (or brokerage) that doesn’t realize that will be left behind.
Put bluntly, Realtors® need to adapt and adopt.
We need to adapt to a changing industry, and adopt technology that delivers a better, more efficient experience to our customers. We need to recognize that customers want more choice when it comes to buying or selling a home. We need to listen to their needs and wants, and not just present them with canned solutions at X%. We need to understand that our industry is no different than any other, and if we don’t evolve to meet the meet the needs of our customers, those customers will find alternatives (just take a look at the success of OpenDoor).
Clearly—though they are flawed and are themselves a stage in the evolutionary path of the industry—other technology-oriented companies in the real estate space have figured this out.
The bottom line is that Realtors® who want to thrive need to be IBM, not Underwood.
At Worth Clark Realty, we are relentlessly customer-focused (heck, it's our #1 priority). That’s why we offer our Happiness Guarantee and have an innovative “For Sale by Owner” (FSBO) program; and we’ll continually push for further value add-ons that put the customer experience at the forefront.
Technology is always disruptive. No industry or profession is immune to that.
However, by focusing first on the customer and their needs—rather than how you deliver your product or service—even the most disruptive technology can become an opportunity.
That’s how they did it at IBM.
And that’s how we do it at Worth Clark Realty.
Steven Barks is the President & COO of Worth Clark Realty. He began his real estate career in 2009 as an agent for a small startup property management company in Minneapolis, MN. A natural self-starte....
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