eeeee-Buyer Brought to you by the Real Estate Buyer’s Agent Council Version 2. 0, May, 2004
Electronic commerce is accelerating the shift of power to the customer.
Introduction • Who is the e-Buyer • Just what is e-Business • How do we find e-Buyers and acquire their business? • What is the status of the online transaction • How do we transition all customers into the For Life Mode What are the opportunities, and associated challenges, for real estate professionals in this constantly evolving business environment? 3
Waddya Know? • How many current Internet users have connected using Wi. Fi or other wireless applications? – 1 in 2 (50%) – 1 in 6 (17%) – 1 in 12 (8%) – 1 in 23 (4%) Seventeen percent have logged on using a wireless device, and those under 27 were nearly twice as likely to have done so. Reuters, Tue Apr 13, 2004 4
Waddya Know? • What does the following emoticon represent? (: )-) Scuba Diver 5
Waddya Know? • Which of the following are considered to be the least patient and desire instant gratification? – Baby Boomers – 1946 - 1964 – Gen Xers – 1963 - 1978 – Gen Yers – late 70’s – mid 90’s – Seniors – 55 and older These are the kids of the Baby Boomers, and they grew up with latchkeys, fast food, remote controls, automatic teller machines and microwave ovens, all of which provided instant gratification. 6
Waddya Know? • What does the following emoticon represent? : -D Talks too much 7
Waddya Know? • On average, how long did e-Buyers search for a home in 2002 using the Internet before contacting a representative? – 1. 8 weeks – 2. 5 weeks – 3. 6 weeks – 4. 5 weeks e-Buyers averaged 4. 5 weeks investigating homes and neighborhoods before contacting a salesperson versus 1. 8 weeks for Traditional Buyers (California Association of REALTORS® study – 2002). 8
Waddya Know? • On average, how long did it take ebuyers to purchase a home after contacting a salesperson? – 2. 0 weeks – 3. 2 weeks – 4. 0 weeks – 6. 6 weeks After contacting a salesperson, e-Buyers spent an average of 2 weeks in a search, visiting an average of 7. 5 homes, opposed to 6. 6 weeks and 15. 2 home for t-Buyers. (California Association of REALTORS® study – 2002). 9
Waddya Know? • What does the following emoticon represent? }: - > little devil 10
Waddya Know? • What does the following emoticon represent? # - ) partied all night 11
Activity: Brainstorm • List skills and strengths required of successful real estate professional: • How does technology effect the strengths and value of a real estate practitioner? 12
e-Buyer • Electronic buyer • Consumers who conduct research/purchase via the Internet • Customers the real estate industry has always worked with, just better informed 13
What e-Buyers Want • Consumers desires in the purchase of a home: • Price • Personal touch • Customer service 14
Internet User Driving Forces 1996 -2001 Email proliferation Free web browser Content explosion Low-cost PCs Intranets for business users Web hosting services Business-to-consumer e-commerce PC purchase rebates from ISPs Business-to-business e-commerce “Free” ISP rates in international markets Web-driven productivity gains Internet/cyber cafes 2002 -2007 Web cellular phones Pre-paid Internet access cards Broadband Internet connections Wireless Internet access Un-metered Internet access fees M-commerce (mobile devices) Business-to-Business e-commerce Wireless web content M-commerce (E-commerce for mobile devices) Internet cafes in developing countries Declining & fixed ISP rates outside the U. S. Hardware costs bundled in ISP rates Web appliances Technology is constantly evolving – changing the way we do business. 15
What e-Buyers Want • Make the home buying/selling process • Easier – Access to information • Quicker – Communications with Broker, mortgage Broker, etc. • Cheaper – Focus on value – not cost of the property 16
e-Buyer versus t-Buyer E-Buyer T-Buyer Access to information Dependence on salesperson Be involved throughout the transaction Be involved in the selection process only Desire exceptional customer service 17
Consumers Desires and Needs • • • They wish to save time, They are techno-savvy They have high expectations They are loyal – to an extent 1 st contact online must meet expectations Success in this (automobile) area will depend on dealership personnel, the dynamics of which are changing right along with the dealership Internet operations landscape. Polk Automotive Internet Study 18
Consumers Desires and Needs • • Access to product information Control of the buying process Quick response to inquiries Efficient use of buyer’s time Product choice Quick, friendly customer service Ease of transaction Resolving problems quickly is the factor that will lead to future business 19
Why Buy Online ? • Value: product quality/support & customer service weigh heavily on e-Buyer’s decision to purchase. • Control: e-Buyer will most likely obtain information before contacting you. • Time: e-Buyer wants information provided quickly & accurately. • Anonymity: do not push e-Buyers to reveal themselves sooner than they're ready 20
Continued Need for High Touch • Incorporate technology into hightouch customer service – Determine for each customer/client how and when communications are to take place…. 21
Activity: Brainstorm • What “high-touch” customer services do you now offer to your buyers? • What are other successful real estate professionals doing that you would like to implement? 22
The New e-Buyer - Demographics • Of all the demographic data – this is the most telling… – 77% say that the Internet influences their purchases more than any other media. 23
How do they React and Transact • …these online customers are more regular visitors to brick-and-mortar stores than are their counterparts. • In a recent survey, 74% of respondents reported that they had visited a department store recently, while only 61% of offliners had. 24
R. E. e-Buyers • What real estate e-Buyers are generally looking for is a “live person” to: – Interpret information – validate and supplement information – negotiate terms and conditions – help guide them through the process of buying a home 25
CAR Study • 70% of all dissatisfied t-Buyers were dissatisfied because the salesperson failed to communicate effectively • 87% of the e-Buyers commented that the salesperson was always quick to respond. Good News…e-Buyers look at approximately 50% fewer homes before purchasing than do traditional buyers. 26
Distinctive Audiences • As we discuss the research results of the following generations, consider the following: – What is unique about their communication preferences? – What unique ways can I market to these groups? 27
Distinctive Audiences – Baby Boomers • • • Born between 1946 & 1964 76 million strong 52% of all online shoppers in 2000 Account for 50% of all Internet users 27% percent of boomers use the Internet for financial news at least 1 or 2 times per week, with 8 percent checking the Net every day. • 62% made at least 1 online purchase • Image is everything 28
Distinctive Audiences – Generation X • • Born between 1963 & 1981 50 million strong Kids of the Baby Boomers Grew up with instant-gratification & quick response conveniences – fast food, remote control entertainment, ATMs & microwave ovens • The generation that brought e-Business into the mainstream • Time is of the essence 29
Distinctive Audiences – Generation Y • • Born between the late 1970’s to mid 1990’s 60 million up & coming consumers Selected the Internet as medium of choice Estimated that almost 80% were online at the end of 2000 • Instant gratification buyers & like the social aspect of shopping with friends • Possible first time home-buyers 30
Tomorrow’s Home Buyer • (IDC) (www. idc. com) noted that; “many in this group already take the Internet for granted and in five years they’ll expect it to be as reliable as electricity, the telephone, and running water”. • Generations X and Y could spend approximately one-third of their lives on the Internet • Generation Y likes to window-shop online & purchase in person. Verify exam That’s good news for real estate professionals! 31
Distinctive Audiences – Seniors • Fastest growing group of Internet users • Expected to grow 50% as compared to 3% for the 18 – 40 year olds. • This group likes the Internet to connect to loved-ones. • Importance of ease of use in your web-site (large text, easy navigation) 32
Distinctive Audiences – Seniors • Top 5 uses by Seniors – Using email – Looking up hobby information – Seeking financial information – Reading the news – Checking weather reports • These should be included on your marketing plan 33
Activity: Brainstorm • How do successful communication methods differ to meet the needs of the demographic groups? – Baby Boomers: Image is everything! – Gen X: Now! – Gen Y: Possible first time home buyers – Seniors: Ease of use 34
Representing the e-Buyer • Agency Laws still apply • The potential for undisclosed dual agency still exists, particularly if you list properties on your site. 35
What is e-Business? • Collective term to describe business & business services that use the Internet as a transaction medium. • Integration of people & business processes with technology & the internet • Use of electronic information to conduct business 36
Section II. E-Business • “Old Economy values. . . still hold true in the New Economy. ” - Elizabeth Heichler, IDC - What do these companies do wrong? 37
E-Business – Still a Sound Business • We learn from others’ mistakes – Original e-Businesses failed because they compromised price for customer service. – Make it easy for consumers to find and contact you. 38
Activity: Brainstorm • What are some of the frustrations you have had shopping/looking for information online? • What are you doing to ease your online consumers’ experience? 39
Changing Role of the R. E. Professional • To succeed in the new world of e. Commerce real estate professionals must move: from gatekeepers of the information to stewards of the transaction 40
The shift of Power to the Consumer • Do not expect the transaction to take place entirely online – complex process – infrequently conducted – heavily regulated – saturated with many different participants 41
Internet Business Models Things in motion tend to stay in motion, things at rest tend to stay at rest E-Business is constantly evolving as a result of two key factors, • Sir Issac Newton Economics and Natural Law • English Physicist • 1642 -1727
Internet Business Models New E-Business Models Natural Law Economics 1 st Law of Physics Supply and Demand Invisible Hand of Incentives
Internet Business Models Advertising Model Unqualified Leads Aggregator (REALTOR. COM)) MLS Broker Consumer
Internet Business Models Advertising Model • Centralizes audience building • Provides a brand • Centralizes content control • Unifies the consumer experience • Generates unqualified leads
Internet Business Models IDX Model Selling Agent Website Consumer • Provides localized branding • Decentralizes content control • Difficult to police MLS or Aggregator Broker Note: IDX does not preclude those without listings from displaying others’ listings.
Internet Business Models Referral Model Consumer Referral Agent Website • A blend of IDX and advertising MLS or Aggregator Broker • Can blur the focus of the business
Internet Business Models VOW Model Selling Agent Website Business Relationship Consumer • Re-establishes the MLS or consumer. Aggregator agent/Broker relationship Broker • Operator needs to supply incentive to the consumer
Internet Business Models IDX vs. VOW IDX addresses Internet advertising VOW establishment of brokerconsumer relationships
Internet Business Models Lead Generation Model Financial Incentive Lender Website Leads Consumer Compensation Broker Incentive to the consumer to provide the consumer’s information, thereby establishing a relationship. This information is then sold to the broker as a qualified lead.
Internet Business Models • If you don’t market to the e-Buyer, someone else will • - for a fee 51
Types of Products & Services Standard Commodities Choice Commodities Intangible Commodities Unique Commodities (such as homes, but most homes are not sold online) 52
Standard Commodities • Mass-produced • Multiple purchases by multiple consumers at the same time • Uniform pricing structure • Products are easily packaged/shipped • Example: Books 53
Choice Commodities • Involve non-physical products, like offering a service • Uniformity of purpose • Distinction & variation in each customer’s use • Purchase or use is frequently singular • Varied pricing structure • Time sensitive • Example: Airline Tickets 54
Intangible Commodities • Personalized to accommodate the needs of consumer • Customer’s profile (creditworthiness, financial history) are important as features of product • Example: Mortgage Loans 55
Unique Commodities • Difficult to “web-ize” • Not standard – no two are exactly alike • Cannot be owned by different people at the same time • Buyer choice & circumstances are factors • Example: Purchasing a Home 56
Unique Commodities • Why is your web-site not considered selling a unique commodity? • Hint: What are you actually selling? • Answer: Your services… 57
Activity: Brainstorm • Name some traditional businesses that have made successful transitions to e-Business. 58
What Customers Want • One-stop shopping • A totally managed transaction • All property, community & related information updated in “real time” • A faster & more pleasant experience • Overall transactional savings • Regular & complete communication 59
Predictive Modeling • Quantifying those known parts of the home-buying cycle that can be anticipated & thereby present opportunities to communicate with the customer & generate value-added revenue. • Lawfully target your customer • Lawfully target your market • Determine your options 60
Facets of the Home Buying Process
Activity: Brainstorm • What other examples can you provide that demonstrate how predictive modeling may help in assisting clients in the entire home ownership cycle? 62
Section III Communication Objectives • Provide better customer service • Provide direct response to the customer • Cross-sell company products & services • Close more sales • Simplify marketing • Acquire new customers 63
All Channel Partners Want: • Customer acquisition • Customer retention throughout the Home Ownership Lifecycle • Customer cross-selling 64
Customer-Centric Communication © Real. Sure, Inc. 2000
Targeting Your Customer Lawfully • The salesperson wants to know what customers are doing when online – Survey your customers – Focus – lead with client needs 66
Finding the New e-Buyer • The search process ties in with: – Pre-qualification – Online value opinion – Online appraisal – Closing process • If this what they are looking for, are you there? 67
Targeting Your Customer Lawfully • . . . simply means taking what a good salesperson already does to the next level. • The key to success is tied to the quality & quantity of data held for each customer or property. 68
Fair Housing • CAUTION: • In targeting your market or customers, always remember that under Fair Housing statutes it is unlawful to “profile” or otherwise discriminate on the basis of race, color, religion, sex, handicap, familial status or national origin. 69
To provide optimum customer self-service online, offer the following services – An automated or personal response system • Drip e-mail, Auto responders, – High level of customized response for customer inquiries • Third-level domains – Integrated online communication with offline human communication • Chat or Voi. P – Marriage of all communication channels 70
The International Market • Physical facilities, geographical location & time zones are no longer obstacles. • With the onset of nearly-instant global communication through the Internet, people can now conduct business from anywhere at anytime. 71
International Consortium of Real Estate Associations • Ultimately, ICREA looks to set international real estate standards based on a common code of ethics and to facilitate referrals and related payment of fees among ICREA member constituents. 72
Activity: Brainstorm • What are some needs/information that international and/or multicultural clients are seeking. Is your website meeting these needs? 73
New Way of Communicating & Managing Business Obsession with technological advancement and “nowness” makes utility hard to derive Don’t invest in new technologies • Harold Innis because you need the “latest and • Canadian Historian greatest” and you need it now. • 1894 -1952
e-Mail • e-mail has already surpassed telephone & voicemail as the #1 method of business communication. • Are you using e-mail effectively & to your best advantage? 75
Managing e-Mail • E-Buyers want information and they want it quickly… 76
Managing e-Mail • 150+ messages per day! How do you read & respond appropriately? – Sort & file your e-mail with filters per client, geographical farm, mortgage company, etc – Organize e-mail with a comprehensive filing system – Be aware of viruses – Use customized signatures 77
Activity: Self-Assessment • Do you communicate differently with e-Buyers & t-Buyers? List how. Be honest. • How can you use technology to improve how you communicate? 78
Mobilemediary • The Mobilemediary will be able to break into the value chain at any point, bringing information & transaction capabilities to customers whenever & wherever they are ready to buy a product or service. • Test? 79
Mobilemediary • Successful buyer representatives will be those who learn how to use technology to manage the key element in the real estate transaction. . . INFORMATION. • Gaining knowledge of how to get information to the customer timely & efficiently is the job of the Mobilemediary – and the buyer representative. 80
Broadband Technology • High speed internet access: – Cable Modems – T 1 Lines – Digital Subscriber Lines (DSL) – Satellites • The number of households with highspeed Internet connections in the US grew: – From 10. 4 million in 2001 to 26. 7 million in 2004 81
Wireless Communications • Wireless is rapidly becoming the medium of choice for many businesses & the customers they serve. One in six U. S. Internet users have logged on using "Wi-Fi" or another wireless technology. • For them, it’s “Business as usual. ” 82
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Collecting and Processing Data • Customer service … therein lies the key element to keep in mind as the era of e-business unfolds. Using customer information in a way that aids the customer and respects them as a person is the high road to take. 84
Tracking Data In the business world, the rearview mirror is always clearer than the windshield In order to see where you are • Warren Buffett going you must see where you • Investor have been and how you got there. • (1930 - ? )
Consumer Information • Personal Data - consists of names, addresses, credit card numbers & purchasing history – use only in conjunction with specific buyer’s transaction • Collective Data - concerns the overall demand for a given product or service & how that product or service should be priced and/or delivered 86
Confidentiality • If you fail to convince customers that their personal data in your possession is confidential & secure you risk that they will go somewhere else. 87
Tracking Data – What do you measure? • What is your product? – Listings or services, other? • What is your goal? – Acquire direct communication with the consumer • How do you accomplish your goal? – E-mail communication, online forms, tollfree number 88
Tracking Data – What do you measure? • Can consumers easily access your communication vehicles? – Data tracking • Are consumers finding your site? – Track number of “hits” – wrong 89
Activity: Brainstorm • List ways that you currently track your traditional methods of marketing • List ways you can track the success of your e-marketing efforts 90
Tracking Data – What do you measure? • Units to consider tracking – Unique visitors – Page views – Referring page – Search Engines – Search Engine key words – Operating Systems – Who's online – Languages 91
Forecasting, What’s realistic? • Ask Your Web Hosting Vendor • Relate Your Estimate to Your (offline and online) Marketing • Ask Experts • Expected/anticipated ROI 92
Web sites “The value of goods are derived from its utility to the user, not the labor spent in producing it. ” Consumers don’t care that you • Jean-Baptiste Say spent $XXX designing your web • French Economist site two years ago, they care how • 1767 -1832 functional it is today.
Web Sites Your personal website should: • Be the centerpiece for all online advertising & communication • Have access to search data • Contain tools necessary to locate property & financing are key elements • Follow good design principles 94
Activity: Brainstorm • If customers rarely search for a specific real estate salesperson, what are some keywords you have used/can use so that your name will come up as home buyers search for information online? Hint – include multiple ways a word can be spelled or misspelled. 95
Web Sites – Tools for consumers • • • Mortgage information Market/home information Area information Moving tips Contact information Other? ? ? 96
Activity: Brainstorm • What other information would you provide? • List the top 5 and the next top five priorities. – These should be made available throughout your site. Track how users are finding these areas through your web stats. 97
Activity: • List five things you should do on your web site • List five things you should not do on your web site 98
Driving Traffic to your Web Site 99
Activity: Brainstorm • What additional methods would help drive traffic to your website? 100
Promoting your url 101
Voice Over Internet Protocol • Benefits – Customers never have to leave your site to reach customer service rep – Reduced long-distance costs – Customers add “high-touch” when/where they want – Customer service can up/cross-sell other products & services 102
e-Newsletters • • • Replace direct mail counterpart Cost-effective Can be more target specific Can be automated Can carry imbedded photo tours & direct links to specific information 103
Moving Non-Internet Users Online • Identify who is online & who isn’t, then: – Offer a neighborhood e-Newsletter with handy information – Post a neighborhood calendar on your website with links – Send out a direct mail piece offering assistance in getting online 104
5 Cs Of Doing Business Online • Contact – continue with existing customers & attract new customers • Capture – after contact create a relationship • Cultivate – convert contacts into customers • Close – convert customer into cash • Continue – keep your customer For Life 105
Activity: Brainstorm • Develop business strategies that will be addressed by the Web strategy, email strategy, and service delivery (what services you will make available and how often). Be sure to include measurable objectives with the frequency that they will be measured. For the web strategy you will be asked to design you home page plus identify how you will market your web site. 106
Value Through Integration • As the individual parts of the transaction become individual commodities, tomorrow’s real estate professional is going to have to become an aggregator of services. 107
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