Are You On The Bullet Train To Irrelevance?

Oscar Gonzales Copyright 2013

Are You on the Bullet Train to Irrelevance?


What changes do you see coming in the Next 5 Years?

Socially? Economically? Real Estate Industry?


Attractive affordability conditions generated by very low mortgage interest rates appeared to be bringing some buyers back to the market.

Pace of a home sales recovery still depends more on job creation and an accompanying rise in consumer confidence.

Recent trends in oil, producer and commodity prices are raising concerns about another round of “recession.”

Mortgage rates are expected to remain low for awhile but qualifying for a mortgage is still very challenging.

The Euro…..

Continued Uncertainty in the Economy and Marketplace


Evolution of the MLS


Generational Differences

For the first time in history there are 6living generations in America.

• GI Generation (1901-1926)• Silent's (1927-1945)• Boomers (1946-1964)• Generation X (1965-1979)• Millennial’s (Gen Y) (1980 -1998)• Generation Z (1999 – present)

• And………


The Next 5 Years ??????

Generation “Wired”


Generational Differences

4 of them are working together in theworkplace and exist side by side.

• The traditional industry models become less appealing and relevant to each succeeding generation.

The generational disconnect can be bridged.

We need to recognize the growing differences in the consumers

needs, preferences and values and do something about it,

otherwise they will deem you irrelevant.


Market Structure:

Consolidations &

Specializations

Realtors operate in markets.• None operate in the same market in

which they were composed, structured or functioned.

• Consolidation is a common trend in many markets.

• Realtors are more different than they are similar because of the demands of the marketplace.


It will not be Business As Usual!


The Tipping PointIs defined as:• The moment of critical mass, the threshold, the boiling point.• “Mysterious” sociological changes that influence our everyday

life.


When Did the Power Shift to the Consumer?• In 1950 with the introduction of a game-changing technology

Newton’ s second law of thermodynamics was now in play:

Objects at rest tend to stay at rest especially if they have had a long day at work.


When Did the Power Shift to the Consumer?



Consumers listenmore to one anotherthan they do to marketing messagesof advertisers in the traditional media.

Technology damaged the

traditional purchase funnel.

People are increasinglyindividualist. They escape any categorizing.

It’s not a question of technology, it’s a

question of customer

relationships.


Organizational Responses• Many brokers and agents spend all day

defending what they do, how they sell services and try to prevent their organizations from being devoured by the “NEW.”

• Unaware that everything that is happening in the real estate industry is ever more likely to happen on a screen or handheld device.

• Denying that traditional Media is in a death spiral

Oscar Gonzales Copyright 2013If You Strap An Engine on a Horse do you have a Car?

• Every Broker and Agent must ask themselves what business they are in and whether their traditional idea of “how to be in that business” is still relevant to what the customers want.

• You can’t solve a problem before you know what the problem is: otherwise you wind up strapping engines on horses.


The industry faces not one but four interlinked and influencing variables

Where a change in one influences the other three

What’s Driving the Shift?


ConsumersContentCuration

Convergence

Four Factors Shaping Our Future


Choose what, how & when they consume

Consumers


Profile of Realtors & Homebuyers


Profile of Realtors & Homebuyers• Median age of a Realtor is 56

years old

• 57% are female

• 75% of Realtors have real estate as their only occupation

• 9% of Realtors are foreign born

• Largest share of homebuyers are 25-34 years old; Median age overall is 45 years old

• 37% are first-time homebuyers

• 21 % are single females; 12% are single males

• 15% of first-time home buyers are foreign born; 7% are repeat


• 56% of Realtors have a smart phone with wireless internet and email access

• 91% of information on the website is the members own listings

• Almost 1/2 of members are using social media.

• Realtors spend a median of $250 to maintain their websites

• 88% of homebuyers used the internet to search for a home

• 89% used a real estate agent or broker

• 30% of buyers used print newspaper ads to find info on homes for sale

• 2% of buyers found the home they purchased using print ads

Profile of Realtors & Homebuyers


Shift from Dependence to Choice• More choices: accessed more easily

•Smart phones and iPad’s

• More kinds of choices•Not just when and how but increasing variety of features

• Great ease of use•Voicemail vs. Text

• Choice not to commit•They expect an option to make full commitment

• Increasing sense of entitlement•As each new generation is offered choice, their standards go up and brokers and agents must respect the new standard


Shift from Dependence to Choice

Success in managing consumer choice depends on giving up the habits of the

old uneven power relationships and forming a new more equal partnership.


………becomes King!!

Content


Content……..becomes King!The Internet makes its possible for buyers and sellers to find information and each other without the middleman.

Consumers have little reason to pay for delivery that isn’t digital anymore, and digital delivery doesn’t create comparable monopolies to support content.


Managing Information Overload

Curation


Curation

Information

Scarcity

Information

Abundance

InformationOverwhelm

“Often what I need to know before I use any of their expertise is more about myself and my community, meaning the people I trust.

I could figure it out myself, but so often time is exactly what I don’t have.”

~ The Consumer

What consumers trust has changed:Instead of an expert, they want to hear from the source – • The person who stayed in the room• Ate the meal • Drove the new car • Got the home loan• Bought the house


The Forms of Communication

Convergence


Convergence• Many platforms that seem important today will likely be replaced

in a few years.

• The ongoing convergence of technologies, media forms and other aspects of our lives will continue to intensify the previous three factors.


Convergence• To focus on who will win is to miss the point about convergence:

The new doesn’t replace the old; the new and the old combine.


Disruptive Business Models


The Definition:

Disruptive business models focus on creating, refining, reengineering or optimizing a product/service, role/function/practice, category, market, sector, or industry.

The most successful companies incorporate disruptive thinking to gain distinctive competitive value propositions.


Disruptors


Are You Disruptive?

• When was the last time your company embraced change

and did something innovative?

• When was the last time you rolled-out a new service

offering?

• Are your management and executive ranks void of youth?

• Do people in your brokerage laugh at new ideas?

• When was the last time you sought out a strategic partner to

exploit a market opportunity?


Are You Disruptive

• Does your organization focus more on process than success?

• Are agents who point out problems looked down upon?

• Do you settle for just managing your agents or do you inspire

them to become innovators?

• Has your brokerage embraced social media?

• Does anyone on your executive team have a coach or mentor?

• Has anyone on your executive team attended a conference on

strategy or innovation in the last year?



Reading Recommendations


“We can't solve problems by using the same kind of thinking we used

when we created them.” Albert Einstein

“Being Disruptive helps to keep you off the Bullet Train and Relevant”


Are You on the Bullet Train to Irrelevance?