Commentary by Jeff Mandel
RISMEDIA, May 5, 2008- Vince Lombardi once stated, “Winning is not a sometime thing, it’s an all-time thing. You don’t win once in a while, you don’t do things right once in a while, you do them right all of the time. Winning is a habit. Unfortunately, so is losing.” The timing for the applicability of this quote couldn’t be any greater than the present. The importance of understanding and incorporating the best practices required to “win” into your culture and daily business routines is not just a matter of winning…it’s now a matter of survival.
Companies that try to take shortcuts and just skate by are flirting with disaster and may not survive the outcome. For example, it has been publicized that 246 major U.S. lending operations have “imploded” since late 2006. Given the continued slowdown in housing markets and declining home values across the U.S., it is critical that real estate companies that offer multiple core services (real estate, insurance, title, mortgage, etc.) begin to optimize the services they provide consumers through an integrated value proposition weaving together simplified processes and excellent service levels. This will begin to differentiate companies willing to put in the required effort. Real estate companies that don’t begin to optimize the returns from these business lines may soon be fighting for their own survival.
Recently, I had the privilege of facilitating the opening general session for RESPRO’s 2008 Annual Conference in Washington, D.C. The panel included: Rosey Koberlein, president & CEO of the Long Companies; Chuck McNeal, CEO and chairman of the Board of The Group, Inc. family of companies; Dean Haugen, vice president for Wells Fargo Ventures; and Chuck Cain, vice president & senior alliance business partner for LandAmerica Financial, Group, Inc. The topic for our session was “Capitalizing on the Value of Your Affiliated Businesses.”
Just like everyone in our industry, each of the panelists and their respective companies has been dramatically impacted by the contracting real estate markets and tightening access to credit. The consensus amongst the panelists was that the historical tactics used to improve capture rates and profitability were not necessarily sufficient to help companies thrive under existing market conditions. Another key takeaway was that it is more important than ever for every real estate company offering core services to immediately leverage the strengths of each of their business lines into one consolidated group of services focused on servicing their customers’ needs and strengthening their overall company. As Koberlein noted, when their mortgage partner, First Magnus Financial Corp., for all intents and purposes collapsed overnight, it was great that all of the resources that had been previously committed to building a four-legged stool within their core services operation withstood the challenge and held sturdy when one of their legs collapsed.
The reality is that it is harder than ever for consumers to navigate the process of homeownership and financing, and there is a unique opportunity for companies to leverage all of their resources to educate their customers and simplify the process. The need for companies dedicated to the homeownership space to begin refocusing their efforts on building and providing services to their customers which focus on building long-term trusted relationships versus the fire-drill process typically in place that only focuses on putting money in the corporation’s pocket and closing the deal at-hand despite the long-term consequences, needs to change. Consumers are in great need of financial services partners who can act as advisors and provide them the guidance and education needed for them to meet their short-and long-term financing needs. Based on my research, consumers’ loyalty will follow if these services are provided.
Although each of the panelists in my session represented a unique business segment or model, everyone essentially disseminated the same core message, which focused on getting back to the sound basics of providing their stakeholders (employees, agents, partners, consumers, etc.) the resources necessary for them to be successful with achieving their goals. Some of the key tactics noted by my panelists included either executing or providing the following:
• Create a laser-focused strategy for their business which clearly disseminates their goals and objectives in a prioritized manner.
• Work on effective communication between the organization and partners with a strong emphasis on education (i.e., beneficial information for real estate agents, loan officers, and consumers regarding the market conditions and ways to effectively serve customers and get deals completed, etc.).
• Develop and implement accountabilities throughout their organizations and partnerships regarding expectations and results.
• Create enhanced clear and visible performance metrics which expand beyond the traditional focus of capture rates (i.e., number of at bats by source – real estate agents, real estate offices, loan officers, etc.) to further understand the key drivers of success and the effectiveness of their efforts, including customer service, marketing campaigns, relationship building efforts, etc.
• Create strategies for expanding their mortgage and title business into their respective markets beyond a singular focus on their respective real estate partner to ensure the full potential returns from their investments in each of these businesses is achieved.
The reality is that the market dynamics we are all facing continue to change at a pace not seen by most of us in recent memory. It is critical for all companies to stay focused on the essential best practices that will enable each of your companies to not just win the short-term battles but be in a position to thrive on the back-end with a company that is stronger than it was before the current market contraction began. My best advice is to take advantage of the current environment to embrace the changes required to more effectively streamline and position your company and don’t wait until tomorrow to implement them or you may risk being on the losing end of what Vince Lombardi tells us could be a winning proposition. We’ve huddled….now take your playbook to the field and execute the X’s and O’s!
Jeff Mandel is president & CEO of iQual Corp. Contact him at Jeff@iqual.com.