Will Consumer Demands Create A Tipping Point for the Real Estate Transaction?
By Jeremy Conaway
February 1, 2011 – 11:33 AM
It seems like just yesterday that Malcolm Gladwell in his book, Tipping Point: How Little Things Can Make A Big Difference, introduced us to the concept of the moment of critical mass, the threshold, the boiling point. As Gladwell states, “Ideas, products, messages and behaviors spread like viruses.” In every situation there is that moment in time when our world is ready to follow the right leadership. With respect to today’s real estate consumer and the subject of transaction management, that moment is here.
Many in the industry failed to take note of last month’s announcement that Keller Williams International has incorporated into its arsenal of business tools a new system called eEdge. To some extent, this oversight is understandable. On the day of the announcement, several hundred industry leaders were attending the Inman conference in New York City, feeding the continuing discussion regarding what should be happening in the industry. While one might speculate as to the timing of the Keller Williams announcement, one can only be awed by the ramifications of the announcement and what it means to the future of the industry.
In order to understand why the eEdge announcement is so important, it is appropriate that we take a quick glance across the industry’s current landscape. The industry is now in its sixth year of transition, confusion, and market shift. The North American economy continues to bravely struggle along at a snail’s pace, further discouraging forward progress. Like sailing ships drifting in “irons” on a windless sea, alarming numbers of real estate professionals and brokers are demonstrating little or no momentum and have even fewer financial resources. Leadership has been stressed into an almost paper-thin commodity. Senior leaders are watching in horror as the prospect of an unfunded retirement looms closer and younger generations have yet to be extended an invitation worth accepting to join the industry leadership and management. Competitiveness has all but disappeared. Creativity and innovation within the industry are at a precariously low ebb.
It is from an environment exactly like this that a “tipping point” occurs. From the dark ages came the Renaissance and from this current morass will come the real estate relationship and transaction of the future. The price of success in this new era will be constant vigilance, a powerful urge to be competitive, and a willingness to recognize the need to change and adapt to a new world of opportunity.
It is also from this atmosphere that certain individuals and entities with special visions and skills emerge. “The success reaching a tipping point during any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts.” According to Gladwell, economists call this the Pareto Principle, or the 80/20 Rule, which is the idea that in any situation roughly 80 percent of the ‘work’ will be done by 20 percent of the participants.” Within this unique 20% are the “Connectors” who link us with the world, the “Mavens” who connect us with new information, and the “Salespersons” who provide the powerful skills of negotiation and persuasion that are so critical to our ability to adapt to a new situation.
Knowing about these elements positions us to understand the forces that led to the eEdge announcement. The systemization of our transaction and consumer experience is a need that has been around for decades. The lack of a response is a failure that has denied our entrepreneurs the profits that they have sought for the past fifteen years. Millions of dollars have been lost over the past twelve years trying to convince our practitioners that transaction management is the logical next step. Brave organizations like the Arizona Association of REALTORS® have attempted to use their influence to make this shift happen. But there has been no tipping point.
It is the nature of our world that, in the final analysis, it takes a master connector, a powerful maven, and an influential sales force to finally force the tipping point. The Keller Williams International organization has once again stepped up to the line to provide critical leadership and critical mass. Because of this contribution, the North American real estate transaction, regardless of the market in which you are engaged, will never again be the same.
For those outside the Keller Williams family, there is an up and coming transaction management system called Pulse Realty Software, or Pulse for short. Pulse recognizes that several players are required to perform well, and in work together, to achieve the targeted customer experience.
Of course there are those who will suggest that automated transaction management systems are no big deal — just another software in a sea of unaffordable technologies. This view will certainly fulfill the needs of those who choose to ignore the stated demands of the consumer they purport to serve and, therefore, wish to deny the importance of someone else’s innovation. However, it fails to recognize that, in the greater scheme of things, neither eEdge nor transaction management have anything more to do with technology than that new 55-inch flat screen that arrived this past Christmas.
The flat screen television isn’t about technology. It is about the experience it delivers. Sporting events are transitioned from a spectator activity to a detail-rich involvement that invites expertise and interaction. Automated transaction management systems, like eEdge and Pulse, are not about technology. They are about standards of practice and value propositions. These are two features that today’s real estate consumer has repeatedly told the industry they want, they are willing to pay for, and for which they will seek alternative services until their demands are met.
From the brokerage perspective, automated systems are about profitability. You cannot expect what you cannot inspect. Automated transaction management systems will lead the way to a new era of profitability, which will, in turn, open the doors for the investment dollars that the industry so desperately needs.
Keller Williams has positioned itself, its market centers, and its agents to take competitiveness to a whole new level. In today’s consumer- centric marketplace, competitiveness isn’t about dogs, flying machines, age-old brands or your father’s buddy from Rotary. It is about pure, unadulterated, accountable, and transparent performance. It is about standards, accountability, and giving the consumer exactly what they ask for, and what you promised to deliver. It is about delivering the same highly engineered experience every time.
Keller Williams has done something else that must be recognized. KWI has exercised remarkable internal leadership by making participation in the eEdge program mandatory. This is KWI playing the classic “Maven” role. There is no question that eEdge will fill a vacuum that consumers are demanding to be filled. KWI’s research has proven that point ten times over. By requiring its over 80,000 agents to participate with the system, it assures that the competitive advantage it seeks will materialize.
Ask any racing sailor what it going through their head when they are in irons, and many will tell you that they long for the wind. They will also tell you that when the wind does pick up, it will come from a different compass point, and change the planned course. The sailor cannot control the wind, but can plan possible reactions when a new breeze kicks up.
Welcome to the industry’s newest tipping point. Those who value creativity and innovation to address the realities of today’s real estate industry will embrace the leadership of KWI and learn from its example. Those who dismiss eEdge and its application as just another proprietary brokerage tool, rather than the tipping point and wakeup call that it is, will do so at their own peril.
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