Saturday, December 21, 2013

Five Changes The Real Estate Industry Needs To Make Immediately

"We are stuck in the dark ages, I have great confidence that we will have the best record company in the industry, but the reality is, in today's world, we might have the best dinosaur. Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it's going to be a declining business. This model is done."

Rick Rubin, Chairman of Columbia Records

As chairman of one of the biggest record companies in the world, Rubin realized that the music industry needed a complete overhaul. To say that Rubin has been successful is an understatement. Rubin has won 6 Grammy awards, produced hundreds of albums, been responsible for the career success of a veritable who's who of the music industry having worked with everybody from Johnny Cash to U2. MTV has called Rubin the most influential person in the music industry in the last 20 years.

From behind the scenes, Rubin has seen it all and he knows a change is desperately needed for the record industry. The downhill slide in music began in 1999. Its demise was a child. A young technologically advanced young man. His muse was called Napster.

Napster was founded in May 1999 by Shawn Fanning, a high school student that developed a program for people to share music files over the Internet. This technological advancement caught on with such popularity and grew so fast that the music industry was caught with its pants down. The Recording Industry Association of America (RIAA) with no way to stop what was going on decided to at first try to ignore the technology and when that did not work they began suing their customers. We all know how that turned out.

If that wasn't bad enough, on October 23, 2001, just a month after the 9/11 terrorist attack, Apple computers basically put the final nail in the coffin of the music industry as we used to know it. They launched the iPod. Fast forward to January 2007, when Apple reported record quarterly revenue of US$7.1 billion, of which 48% was made from iPod sales alone. On April 9, 2007, it was announced that Apple had sold its one-hundred millionth iPod, making it the biggest selling digital music player of all time.

In 8 short years, the recording industry was turned upside down. They were ignorant to the value of technology, their governing body did nothing to react to the technology and now sales have been in a free fall decline ever since. Sort of like the housing industry.

So what can be learned from history so as it does not repeat itself? I believe it is too late for many agents, as in my opinion the real estate agent business model is obsolete and has even worse leadership. But that's an article and opinion that has already been voiced.

1. Toss out the baby with the bath water.

In the past, a bath was simply a tub of standing water in which every member of the family bathed in the same bathwater. The man of the house had the privilege of the nice clean water, then all the other sons and men, then the women and finally the children. Last of all the babies. By then the water was so dirty you could actually lose someone in it. Hence the saying, "Don't throw the baby out with the bath water". Whether or not this was true, the idiom remains. Real Estate is dirty. The landscape is murky and littered with sub par performers who are stinking up the joint. The industry is led by Brokers who in some instances are less knowledgeable than their rookie agents. It's time to change and realize that the bath water, and all those lurking in the dirty water be thrown out so the real performers can start fresh and clean

Make it harder for new agents to enter the business. Embrace technology. Educate yourself with many techniques to get a deal done and most importantly understand there is NO business that can be successful without understanding the value of marketing and personal investment. MARKETING IS EVERYTHING!

2. Put the trophies away.

John Wooden was arguably the best college basketball coach of all time. The Wizard of Westwood as he is affectionately called won 10 national championships. Unbelievably his teams won 7 national championships in a row from 1967 to 1973. His UCLA teams also had a record winning streak of 88 consecutive games, four perfect 30-0 seasons, and won 38 straight games in NCAA Tournaments.

Wooden writes in his autobiography that after winning his 10th and last championship in 1975 that he was walking off the court and a fan came up to congratulate him. Wooden recounts that the fan said these resounding words to him, "Great win coach, this makes up for letting us down last year". How strong is the legacy of THE Coach? Steve Lavin (fired from UCLA in 2003), has called this post-Wooden phenomenon a "pathology," and believes that every basketball coach will eventually be fired or forced out from UCLA.

Just because you experienced success doing something one way, does not mean you can count on being successful tomorrow or the day after. Set aside your laurels, re-tool and play the game with today's rules. Success did not last at UCLA and it will not, and has not, lasted in real estate. Change your gameplan right now. Don't have one, create one. Don't let the success of the boom years be your "pathology".

3. Supplication in business breeds HUGE profits.

When is the last time you completely humbled yourself in front of a client? I mean actually show yourself as being completely and utterly undeserving of their business and that you would be honored for them to just to be speaking with you?

With all of the picturesque business cards with all of the alphabets on the cards with all of the brochures selling YOU...when was the last time you begged humbly for someone's business? In this market, you had better learn!

Here's a novel idea to follow. The customer is king. What is more important in today's market is the realization that they may even be more knowledgeable than you. Not sure? Well, you better go into the deal expecting as much. In today's market you had better understand that the appointment that you go on today is an informed prospect. Know your client and ask for the permission to SERVE him.

Permission to do business with the client IS what you are trying to have bestowed upon you. Permission marketing is what will save the real estate industry. In today's digital world you have the ability to communicate with your client and your prospects in a way that you never have before. From their computer, anywhere in the world they should be able to find you and communicate with you, on their terms. But you must have permission. Permission marketing is effective because the client or prospect is contacting you and giving you the stated privilege to do business with them.

Imagine having a stream of qualified, interested prospects calling you. Imagine having had a month of dialogue with a client before you have even met them. Think you could close more business? Let them know you value their permission.

4. Go to War!

No, I am not saying join the Army and go to Iraq. I am talking about taking the gloves off with the media and going to war to combat the onslaught of doom and gloom. The market is not bad. There are deals to be had. There are tons of buyers out there. You are just not armed. David may have slayed a giant with a slingshot but in today's reality, the slingshot just is not going to cut it. You need to be armed with the new and improved slingshot. The cyber-slingshot. Able to slay giants anywhere and anytime. Have I mentioned the importance of technology? Are you getting it yet? Here's a hint, an autoresponder or spam filter is not an adequate use of technology. Your client or prospect may be afraid. People who are afraid, don't buy...unless of course you utilize the aforementioned permission to provide them with information to support their buying decision.

5. Sell the iPod. Be the iPod.

Can you imagine selling a product that everybody HAD to have? Can you imagine BEING the product everyone HAD to have? Now imagine being both. Kind of wild isn't it? Let's agree, selling real estate is not and has not been traditionally sexy. No sizzle. In fact you are in the least prestigious "profession" known to man. Are you simply going to accept that? Become a something remarkable. Don't go outside the box, stomp on it and kick it to the curb!

Earlier I spoke about the iPod. Here is a product that did not exist 8 years ago and now it is a must have. Like Fed Ex before it, how many products or services are created and then become something you can't do without. Be the iPod! Re-Brand yourself as someone we NEED to do business with and someone we MUST do business with. People who learn to capture notoriety generate profits. What are you doing that will make you a rockstar in your community? You need to generate massive exposure and personal celebrity. At a minimum you need to try.

This would just be a starting point. A true roadmap needs to be developed by the individual. As an agent who truly wants to succeed in today's market and beyond, there has to be a concerted effort to reward change and to embrace technology.

I had an agent email me this morning and say angrily that all I keep talking about is marketing and technology. He said I knew nothing about real estate or marketing and that I was an idiot. I asked him how he heard about us. Angrily he said he was reading our blog. And I'm the idiot. Marketing is everything!

Change, while not easy, is constant and quite fulfilling if you are prepared for it.