If you haven’t followed the latest from Seattle-based Redfin, the company lauded a few years ago on Sixty Minutes, they apparently are finding that their existing business model has not been monetized as hoped. They are now planning to identify agents with non-Redfin offices throughout the company to handle their leads for a 30% referral fee, half of which goes to the buyer:
http://blog.seattlepi.nwsource.com/realestatenews/archives/161726.asp
This seems to be making news as an innovative new strategy, with quite a bit of buzz:
http://notorious-rob.com/2009/02/13/redfin-transforms-the-end-of-the-beginning/
But is it any different from the Lending Tree and other affinity models that have been around for a few years? Redfin says they plan to select “partner” agents carefully and monitor service, but again, how is that any different than the model followed by corporate relocation for many years, supported by real estate relocation departments.
The message that should be resonating with brokers is that others continue to access their associates to monetize those other business models, when brokerage companies should be doing this themselves by making quality lead generation a front-and-center priority for their own companies. The goal should not be to continue marketing to these kinds of outsources for already-encumbered leads, but literally developing their own lead machine via their own websites and targeted outreach to any number of market segments, such as first time single women homebuyers, Latino and other ethnic communities, luxury consumers, investors, etc.
No one is better positioned to do this than brokerage firms themselves, and the potential rewards to both their associates and the company are huge. It isn’t channel conflict with agents…it’s incremental business that supports existing agent marketing efforts. Think “both/and” not “either/or.” This “managed care” component of tomorrow’s brokerage business is the best way to ensure that the brand being built and strengthened in the marketplace is your own.
This is one of the important topics that’ll be addressed in Future Tense and special broker sessions at The Event of the Year, the LeadingRE annual conference March 26-28 in Scottsdale.
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Something about that old saying regarding those who don’t learn from their (or others’) mistakes being doomed to repeat them is ringing very true with this topic. The brokerage community was asleep at the switch in recent decades as we watched the 3rd party companies position themselves between the us and corporate HR departments for the business of relocating employees. They now dictate to us the where, when and for how much we will work for in a significant number of transactions each year In the last several years, various internet based business models have, with varying degrees of success, attempted to do the same thing to web based business opportunities as well. Repeating the mistake by conceding this fertile ground to them unchallenged is a perfect recipe for an even larger percentage of our collective business coming to us with 3rd party dictated conditions. As brokers and business owners, this opportunity to serve our agents’ and clients’ interests as we strengthen our own brands should be enough motivation for any of us who plan on still being around in the decades to come.