As real estate brokers, we know that our real estate agents are our most important customers. Happy agents mean retention and growth. This very important thinking is central to our success. However, over the years, brokers have become influenced by the enlightened disrupter.
For years, many brokers went to war with Zillow. The war was waged to maintain the brokerage’s digital connection directly with the consumer. Try as we did, Zillow kept us at bay while they invested billions of investor money in winning the hearts of the consumers. From this strategic position, they are now shoveling money from the pockets of your agents into tier bank account in the form of referral fees. They know that winning the consumer means winning the war.
It is unlikely that brokers will be able to gain the top spot with consumer search. The only hope might be the fierce partner that the Broker Public Portal has with CoStar. Andy Florence may dislike Zillow as much or more than most brokers. Putting that aside, Zillow is challenging the broker on a new front. They are taking on homeownership with something that they call the Super App.
The super app strategy should not be unfamiliar to you. Brokerages have heard a lot about customer for life strategies, but few firms have applied the back muscle to really make it happen. If firms focus on this quickly, there is a strong chance that brokerages can present a strong challenge.
Repeat Business and Ancillary Business is at Risk
When you step back and look at the firms who participate in the BRN, you see strong brands with tenured agents, repeat customers, and a healthy disposition to help consumers with every aspect of home trades – home marketing, settlement services, lending, insurance, etc. Where firms have not been particularly strong is in helping customers with moving or homeownership. As a result, there is a lot of drop-off in repeat business. We lose clients to firms across the street. It seems like brokers put more effort into marketing to reclaim an existing client than maintaining that relationship between transaction cycles.
Zillow’s President, Susan Daimler is pursuing a vision that every broker feared for years when past Zillow executives said that they would not become a broker. Zillow is a broker. They are not a transactional broker. They are a referral broker. They leave the messy part of transacting to the Zillow Premier Agents and pay them about 70% of the commission for that service. Daimler sees that Zillow.com is the best place to find homes and rentals. Dotloop can manage transactions, ShowingTime is the best way to manage showings. Zillow has been on the mortgage banking path for some time now. Insurance and title are surely on the plan along with the enormous girth of services occupied by companies like Angie.
The Dawn is Upon Us
Do not be dower. Consumers love and trust their agent and that agent loves you a lot more than they love Zillow. Agents see Zillow like restaurant owners see Uber Eats or Postmates. It’s the message behind the Domino’s Pizza ads. Those “deliver apps” companies take a lot of the profit out of local businesses. It’s not good. Angie is doing the exact thing to local contractors and home maintenance companies. Zillow may be attacking you in your ancillary services like mortgage and insurance, but they are also attacking landscapers, appliance stores, plumbers, electricians, and the like.
As you consider your strategic initiatives this year. Spend some time thinking about what Zillow is doing. It is probably a bigger concern than what the competing look-alike broker across the street is doing. It’s time to take on the goal of being a trusted advisor for homeownership in your local community.
