Portals did not always represent a threat to brokerages. Before the days of digital, there were not any true disruptors in the industry. There were some different business models, like RE/MAX charging fees to agents rather than commission splits. There were also FSBO (For Sale by Owner) limited-service providers. But at the end of the day, traditional real estate was broker vs. broker.
When portals arrived, they delivered an enormous bump in profitability to brokers. Firms spending millions on print advertising could keep that money and advertise online for free. The biggest pain was getting listings to the portals quickly and accurately. At the time, brokers rarely thought twice about data as an asset or intellectualized the profound impact portals would have on the future. It was not just one broker who traded listings for leads—it was all brokers. Today, portals are becoming referral brokers, and income to the broker is taking another hit. It’s time to share ideas on how to develop customers for life and stay connected to clients in a meaningful way between transactions. But you need to act now.
If you run a pretty good brokerage today, you may have a margin of a little more than 20%. Contrast that with the referral fees paid to Zillow Group, OJO Labs, Opcity by realtor.com®, HomeLight and others at something like 35%. These companies are growing like weeds and are in first position to squeeze out traditional brokers because the consumer goes to their portals first. One solution is to try to edge out these portals by offering alternatives like the Broker Public Portal powered by Homesnap. Another strategy building momentum is never surrendering your customer to portals in the first place.
The challenge in front of brokers is retaining customers for life. What are the meaningful services a brokerage can provide between transactions that will prevent the consumer from going to portals at all? Zillow owns home valuation; what can you own?
Berkshire Hathaway HomeServices CEO Chris Stuart said agents need to “…mind the loyalty gap and enormous business opportunities that exist in doing a better job of keeping up with past customers and spheres of influence.”
MooveGuru is embracing this strategy through a commitment to helping brokers deploy white-labeled homeownership dashboards, called Everything Home, for their customers. This summer, we will be deploying a series of platforms, online and mobile, that will allow homeowners to catalog and manage everything in their home, completely automated for their past customers and sphere of influence. A place where all of their closing documents are stored, they can order filters replaced on the HVAC and record the replacement date, the SKU of the item along with information on who replaced it if a vendor. They can also record the date the hot water heater was serviced, the toilet replaced, the floors redone, the irrigation installed, the gutter replaced, the roof repaired and everything else. We are inspired by the idea of that data being transferred to the new homeowner to truly improve homeownership. Join us on this journey to reshape customer-for-life services.
Scott Oakley is founder and CEO of MooveGuru. For more information, please visit www.mooveguru.com.