In the technology world, nothing is dull like yesterday’s news; unless the old news was right. That’s the case with the story of a technology strategy that might have made all the difference today, if only more brokers had taken it to heart. So it is that the “virtual office” is back in the news, which too many going-broke-brokers and paper-drowned-agents wish they paid attention to last time.
Didn’t the virtual office take off, you ask? Doesn’t everyone have a laptop, PDA and wireless email device? Sure, if we’re talking about college kids – but not the average agent in the average real estate company. NAR studies still show a mysterious 5% of agents don’t report owning a cell phone. Less than half of agents own a PDA newer than two years old and barely 20% are checking their email wirelessly. Brokerage infrastructure is hardly any better these days. Most brokers suffer from advice from over-cautious IT geeks still worrying about “security” rather than cost-efficiencies of installing wireless routers in their offices. Only a tiny fraction has created secure virtual networks or intranets so agents can access email and marketing materials from home.
The real killer is found on Main Street, USA, where so many new physical offices have popped up in the past few years. It’s fairly clear that, in the heady days of a superheated market, the virtual office virtually disappeared as the business strategy of the future.
For too long, little attention has been paid to technical efficiencies, since the past few years survived on an increasing supply of licensed bodies that kept pace with skyrocketing markets. Yet in a post-Greenspan world, cooled by an inflation-anxious-Fed, soaring operational costs are back in the cross-hairs. Swelled inventory is pushing advertising expenses out of control. Brokerages are filled with tech-challenged print-hungry practitioners. And average take-home transaction dollars have fallen to earth, no longer insulating everyone from their own follies. To be sure, everyone “remembers” the Internet – and somehow expects it to provide a miracle to save their operations. But when inventory continues to find itself in expensive print advertising, surely, the bill - for all of these inefficiencies – is coming due.
Peter Drucker once quipped, “Why should people who, for ten or fifteen years, have been competent suddenly become incompetent? The reason in practically all cases I have seen is that people continue in their new assignment to do what made them successful in their old assignment?” Nothing could be truer for the real estate industry today – as it faces its “new assignment” of a normal marketplace - except that many practitioners no longer have the luxury of glossing over the issue with an excess of easy transactions. Brokerages must now undergo, by fire, what they should have done by leisure: The rapid transformation of their operations in order to survive a cost-conscious market. And nothing will be more central to this transformation than the return of the virtual office.
Virtual offices aren’t new or nebulous. They exist across many sectors of the economy that did not have a budgetary free-ride period over the last half-decade. Stock brokers, travel agents and call centers have all taken advantage of the work-from-anywhere opportunities of a virtualized infrastructure. They have transformed their practices into lean, fast-reactive organizations based upon the instantaneous flow of information – and most importantly, unbound their corporate performance from a particular place and time. As brokerages and agents begin similar transformations, a few key concepts can help usher in these changes:
- Centralize online. Any knowledge-based organization – which is the essential component to competitive real estate brokerage – needs to collect and make available its strategic, tactical and time-sensitive knowledge to all agents, all the time. This will require a dramatic shift in organizational theory: most brokerages are built around the concept that floating free-agents will somehow pull together the resources they need to complete transactions, usually independently of – and sometimes in contradiction to – the overall needs of the brokerage. What’s worse, many companies have invested heavily in technologies that only a bare few of their company utilize – or have reinvested in traditional mediums like office space and television at a time when the demographics of consumption has shifted to instant messaging and cellular marketing. In the past, the centralization-gap has been evident in simple everyday differences – such as agents’ databases (say, Top Producer) and brokerage databases (say, Access or Exchange). Essential information – consumer and transaction data – largely remains in-transferable between parties supposedly working together to achieve a transaction. In the virtual office, this information-schism must end in order for all parties to apply their knowledge to the art of the deal. Brokers, agents, consumers, ancillary parties and corporate support staff all must have instant and complete access to transaction details. Such access must be uniformly available by any method (according to the skill of the person): desktops for office-bound staff, laptops for brokers, wireless PDAs for mobile agents and secure web-based intranets for third parties. So offices must learn to virtualize their data: Centralize forms – so agents have access anywhere, fill in blanks and permanently store them in transaction accounts without ever printing a copy. Centralize marketing materials into one repository – so time-sensitive listing appointments and buyer information requests can be responded to with PDFs and templates within seconds not hours.
- Standardize. Standardization is the corollary to centralization and a key component to the virtual office’s ability to keep everyone coordinated across time and space. Standardization will simplify deployment, training and technical support for all new technology, and even for sales techniques. Consider that entire sales forces exist – for example, at telephone companies – with people working from home but using the same technology and sales techniques to handle any customer at any time. Standardization must do the same thing for the real estate “brand” – which must become a brand of practice, not just marketing image.
Standardization will also make possible economies of scale when purchasing new equipment. Countless brokerages and agents have suffered the consequences of owning different models of computers, cell phones, PDAs and digital cameras throughout their organization. Different models make it harder to provide training, amortize technical support costs and get discount pricing when upgrading. At a basic level, lack of standardization inhibits knowledge-sharing amongst your agents: they cannot share techniques and tips if they have dissimilar technology.
Standardization is also a powerful multiplier for marketing efforts. For example, having all agents use the same corporate email domain ensures consistent marketing of your web site (@company.com) to consumers via thousands of communications each week. Standardizing e-marketing efforts – such as using marketing templates that conform to company sales standards– also prevents diluting your brand by errant practitioners.
- Eliminate. Redundancy must go first, especially in areas for which agents do not hold expertise. For example, unless thoroughly trained, agents should avoid photo editing or desktop publishing; and crucially avoid the mail merge. A decade of technical support calls demonstrates how agents still have yet to master these activities – so they should be kept from wasting time attempting them in the first place. Virtual offices must reduce every redundant activity to bare minimums of keystrokes and time. Marketing activities should be automated down to 10 minutes or less – and should rarely involve retyping any information already entered into a corporate database or MLS system.
Likewise, the virtual office should force the complete elimination – not just time reduction – of every form of expensive activity you know should disappear but have yet to remove (such as postal mailings). Undertake an elimination campaign for waste of all kinds – print, paperwork, data entry, cliché marketing, anything incongruent with running a cost-effective virtual organization. To start, ask yourself: if we didn’t already do it this way, and were opening a new company, would we choose to do it this way in this day and age?
Much bemoaning of the cooling market can be heard throughout the industry today. The greatest misunderstanding, however, is that somehow competitive opportunities are “down” – even while gross economic activity is up, unemployment remains low and credit steadily available. Companies pining for the easy-pickings of yesteryear will only be the first to go; even past downturn-market survivors risk elimination in the coming storm. Only by redefining what it means to operate in the real estate marketplace of the future – starting with fundamentally embracing the virtual office – will the future movers and shakers be made.
This article was authored by Matthew Ferrara of Matthew Ferrara Seminars Inc.
Reprinted with permission of Matthew Ferrara Seminars Inc.