The
service
process and the details surrounding the
real estate transaction are mysterious, invisible and
even secretive for the average consumer. The transaction
moves, stalls or falls apart largely unobserved
and beyond the control or influence of the principals.
This lack of understanding on the part of the
consumer in combination with an absence of well defined
responsibilities, creates low professional
accountability. Being in the dark is not acceptable
to today' consumer. The need to know is in many
cases escalating to the need to participate. And
these factors combined with the fact that service " too much"
translates into potential for high
levels of consumer frustration and dissatisfaction.
In a world that has rapidly migrated from a
manufacturing to a service-based economy, quality
service is the key to success and survival. And while
most organizations, especially in real estate, talk
about quality service, unfortunately quality service
remains more talk than reality. Quality service has
become a cliché— over-used, undefined, unmeasured
and meaningless expression that is void of
a process, accountability and consistency.
Traditionally, real estate has been a parochial business governed by
local customs and practices
where closely controlled information has placed the
real estate practitioner as the gatekeeper of that
information. The Internet and technology have
changed reality regarding the aggregation, delivery
and access of housing-related information. And
while many real estate practitioners continue to
fight to guard " gate," consumers are finding an
increasing number of other gates open to access the
information they seek. A trillion-dollar real estate
industry is attracting all forms of competition—
new and old— capital,
intelligence, technology and
resources on a global scale.
Consumers will pursue and
the marketplace will find
ways to deliver better service
and greater service value.
Who will do it and how it
will be done defines the
future of real estate services.
Service has become a serious
business.
Practicing Real Estate
by Convenience.
The service delivery process
surrounding the real estate
transaction does not offer
the consumer a consistent,
reliable, predictable service
outcome and provides low-level
professional accountability.
This is in marked contrast to
other high fee professional
services, e.g. accounting, architecture,
law and medicine.
Real estate practitioners
(800,000 of them) individually
determine what, when,
how and if something is to be
done related to service. The
real estate industry may be the last on earth where practitioners
rather than
consumers define and drive service. Individual
practitioners may and do provide a very different
service process from day to day and even from
morning to afternoon. An external event affecting
the emotions, psyche or physiology of the service
provider may be a determining influence in what is
done, how it is done or if something is done at all.
Sadly, such a service delivery system could be
described as biorhythmic, i.e., the biorhythms of
the service professional define the service. Consumers
experience a service
that is process-less and outcomes
that are closer to random
events than managed
processes with predictable
results. How are consumers
going to change the real
estate business?
Customer Demand
Raises the Bar.
Consumers increasingly recognize
this absence of a
standard of practice. They are
becoming adept at accessing
housing information in the
24 x 7 dimension (24 hours
a day, 7 days a week). This
awareness is improving judgment
in the selection of
service providers, which raises
the level of competition
and service accountability.
Service providers who simply
choose to ignore this shift
are increasingly at business
risk.
Consumers' Perception
of Fees and Service.
When asked about the perceived
value of real estate brokerage services relative to the price paid,
home
buyers and home sellers almost universally offer
that the price is too high. Is that so bad? In the
history of the American free market economy,
serious or long-term dissatisfaction with what consumers
have paid for the goods or services versus
what they have received, has
always been the precursor
to change, destruction or
invention.
Consumers Increasingly
Seeking Value
Through Price.
With any product or service,
value is the relationship
between quality or the qualities
of that product or service
and the price. Consumers
will always seek to maximize
value and in an industry like
ours where differentiation is
unclear, that pursuit is increasingly
focusing on price.
Real Estate: A Self-
Occupied Industry.
Many of the service policies,
practices and procedures that
are common within the
industry reflect the needs
and interests of the real estate service provider—
the salesperson or broker rather than those of the
consumer. There are numerous examples. Let' look
at one illustration:
The phone rings at a typical real estate office. A
prospective customer is calling in to obtain additional
information about a home that has been
advertised in the media. Because the sales person
" has the listing" is not available, no information
is available to the consumer and the
consumer' name, phone number and address are
captured so that the " agent" can return the call as convenient.
Convenient for whom? Certainly
not the consumer.
Whose interests and needs are primary in this
rather common service practice? Only one person
can be first in line— interests and needs are
to be served first? Will it be those of the company,
the service provider / sales
person or the consumer? It' a
business decision and it has
consequences. Any system or
practice that places anyone
" line" ahead of the consumer
is vulnerable to every
competitor or service that
puts the customer first.
Consumers'
Changing Habits
and Expectations.
Changes in consumer habits
and expectations define and
create great new opportunities
for those organizations
that are truly consumer
driven. The consumer-driven
organization approaches service
from the outside in. It
determines what consumers
want and need and then
organizes its internal business
resources, systems, practices,
policies, processes and people to serve the customer.
In contrast, the real estate industry and many of the
firms within it tend to view the world from the
inside out. They offer the outside world services and
practices reflective of the needs of the organization
and the members within. Newer, more nimble organizations
with less vested in past practices and less
invested in old systems have responded more effectively.
And so the question: Is the current pain and
cost associated with change greater or less than the ultimate
cost and pain of clinging to systems and practices
of past success? The New Real Estate Marketplace
Defining Professional Service.
While technology will have an enormous impact in
the real estate industry, it is the underlying service
process and the fundamentals of consumer-centered
practices that will be the key to success and survival.
Superior service and especially superior
professional service has four key elements impacting
quality and value: accountability, consistency,
reliability and responsiveness. The physician, the
lawyer, the accountant, the engineer, the commercial
airline pilot, the service professional who offers
the highest quality and most valued professional
services do so through high levels of accountability,
consistency, reliability and responsiveness. And the
glue that holds all this together is process.
Consistency and reliability of product or service
are not the result of random acts or ongoing improvisation
but rather from predetermined steps
performed in a considered and disciplined manner
i.e., surgical procedures, accounting practices,
musical scores, takeoff/landings. Highly predictable
results and outcomes can only be achieved through
consistent input and processes. Most real estate professionals
work hard. Hard work is not the issue.
Under the mantle of being " contractors,"
sales people have enjoyed the freedom of improved service— it
up along
the way.
Service is not about independence and the service
provider, it' about serving the consumer.
Philip Kotler, distinguished marketing professor
at Northwestern University' Kellogg Graduate
School of Management, in his book Marketing
Management Analysis, Planning, Implementation &
Control identifies five key variables in the marketing
mix for service: people, price, promotion, place
(distribution) and process. Each of these variables
except process has been and is being given a considerable
amount of attention in the delivery of real
estate service. And while technology offers the
promise of eventual valuable impact, it is in the
relationship between customer and service provider
where the greater potential for service value lies. It
is the human application of
consumer-focused systems,
principles and technology
AND the human interaction
with prospects, customers
and clients that offers the
highest potential for greater
service value and greater customer
satisfaction.
Implementing an
Effective Quality
Service Strategy.
Service is serious business
and requires the development
and implementation of serious principles, practices,
systems, solutions and resources. And all of it must
be customer-centered and customer focused. A true
commitment to placing the needs and interests of the
consumer first— all that is done, every time, is the
essential foundation.
Then take the following steps:
• Identify consumer
needs—ongoing research
• Define a service process
• Establish service standards
• Implement systems for
follow through
• Measure performance—
customer feedback
• Learn, improve, and raise
the bar
• Recognize, award, and
reward service performance
Each of these steps has critical
elements and an interdependence
with one another
which means while each part must work, they must
also all work together. Delivering truly superior
service is both simple and complex. The more we
understand about our customers and the more we
focus on satisfying their needs first, the simpler service
becomes. But great service just doesn't happen. It is a
considered and managed process.
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