Over the last several years, the real estate market has experienced a severe downturn, resulting in many agents leaving the business. Some had long successful careers and decided it was a good time to retire. But many were essentially forced out of the business by market conditions and/or their inability to adjust to the new market quickly enough.
The shift has resulted in fewer agents working today, but most of those who remain are with us because they are better business people than those who couldn’t survive. We witness this every day; the agents we speak with are savvier on average, both in technology and in business. The difference is pretty dramatic.
Business goes in cycles, and a significant downturn means businesses close, and the remaining businesses absorb and consolidate their market share. Even when the overall market size shrinks, the individual businesses remaining may experience significant growth! In the market consolidation phase, it is crucial to adopt new strategies, processes and tools that poise you for future growth, and in so doing, you will achieve remarkable growth despite being in the middle of the market downturn.
As this is true for real estate agents, so it is true for suppliers of tools for real estate agents. At Real Pro Systems, as we saw the clouds begin to gather on the horizon, we made a conscious choice to invest in strategies, tools and people that would enable us to consolidate our gains, improve our efficiencies, and weather the coming storm. In 2007 we adopted a company-wide CRM (Customer Relationship Management) system that tracks every interaction from initial lead, through the sales process to completed order, through the production process to deployment and tracking the support process for as long as a client remains with us. We decided to renovate the technology behind our flagship products, Real Pro Gold and Real Pro Silver, so we would remain highly competitive by advancing the state of the art in our industry. And we even had the available resources to build Real Pro Platinum, a powerful team solution that is breaking new ground every day.
In our worst year our revenue sagged only 4% and we remained profitable, at a time when the real estate market and our competitors were getting clobbered. Other vendors who did not invest in efficiencies or product improvements are now losing market share, and we are gaining. As these differences become more apparent, between vendors who have continued to invest in their products and those who have not, we expect our growth to accelerate. We just completed Q1 of 2010 with rapid growth and improved profitability over 2009. In fact, it was the strongest quarter in our history by a considerable margin. (As a privately held company we do not release financial figures.)
Have you thought about your business in terms of market share and market consolidation? As agents leave the business, how will you move in and claim your share? This is not a simple matter of a marketing tactic here or there, these are fundamental business process questions.
It’s often repeated that all marketing is niche marketing. If you think of your business as a set of niches or market segments, what are those segments? Which ones are you focused on? Who is leaving or has left the business in your area? What segment are they vacating or not defending well that you could possibly take on? You might find you could grow your business substantially without much resistance, if you could pick one niche at a time to move in and dominate.
At the same time, what business processes or systems could improve your efficiency, providing more business with lower expenses? If you want different results, you’ll have to do something different. How do you measure the results for each investment you make? What is the “yield” from each source of new leads?
One way to analyze this is to review each stage of your business pipeline, and see what area needs help. Start with lead flow- are you generating enough leads? How about lead conversion? Are you finding that leads from one source convert more readily than another? Are you getting to the leads in time? Or are you finding that one agent on your team does a better job of lead conversion than the others? This business analysis is crucial to identifying the one or two key process improvements that could have an enormous impact on your business.
During this time of market consolidation, we have to make the investments in tools, processes and people that will sustain us going forward. We don’t know if the market will stay at its present subdued level or if there will be a substantial resurgence, or possibly even another leg down. What we do know is that the stronger you are, the more disciplined your business is, the better your chances of surviving and thriving. When we make investments for the long haul, our growth and our market position is more secure and sustainable. In fact, making these improvements and investments mean we can grow, even in a downturn.
