"At home wherever smartness is the keynote Chevrolets belong! Chevrolets are accepted at all the smartest gatherings as the right and proper means of personal transportation. Such unquestioned entrée, you'll agree, is just about the finest compliment a low-priced car could receive."
So starts a 1927 ad for the Chevrolet Six, which at the time had a sales price "as low as $445."
The history of "Chevy" is an example of just how incestuous the auto industry is. The company was founded in 1911 by Louis Chevrolet and William Durrant, the latter having previously founded General Motors. Prior to that, Durrant had been the head of Buick Motor Company and had hired Chevrolet to race Buicks at promotional events.
Two years after this ad appeared, the Great Depression hit. Interestingly and contrary to the action of today's auto industry, Chevrolet saw an opportunity. By improvising and improving their product, Chevrolet finally managed to surpass Ford during the early 1930's, a position they held for the next few years.
Whether we like to admit it or not, we will all pay some part of the $15 billion dollar auto industry bailout now being worked on by our Government. It's easy to get on a soap box and criticize companies that by their own admission "betrayed" American consumers, paid their CEO's millions (Ford CEO Alan Mulally earned $28 million in his first four months and this year will make a base salary of $2 million), and use company jets to travel to the bailout meetings (The Ford company aircraft cost almost $800k in 2007 alone), but as part of a democratic society we have to trust our elected officials to do what is right on our behalf. I've detailed my admiration of New York Times' Thomas Friedman several times before, so no surprises that I highlight his recent interview on Face the Nation with Bob Schieffer. But how does any of this relate to the real estate industry?
There's a lot to be learned from how Chevrolet grew their business in the face of dire economic conditions. Of course I am referring to the Great Depression and not the current recession.
Anyone with half a brain knows that things will eventually get better. The world isn't going to end, the economy will get better and as it does, spending will increase as will activity in the housing market. But before any of that happens, some big things will change.
As part of our collective (and might I say very generous!) help in bailing out the banking and auto industries, we will all become share holders. And in real estate, only the best will be left standing.
One thing people don't seem to be speaking about is how the competitive landscape has improved. As the classic Billy Ocean song states, "When the going gets tough the tough get going" and for those who I call "Real Realtors" (i.e. people who have a career in real estate vs. the weekend warriors), there hasn't been a better time to eat market share by highlighting what makes them different, what makes them better.
If you haven't done so already, you should be doing the same. I've said it before and I'll say it again - Realtors are small business owners. You have staffing needs, operational overhead and your product (you) always needs attention. With the end of the year being probably the quietest period of the calendar for Realtors, it's an ideal time to look at what you do - good AND bad - and work out how it can be improved.
One obvious area of focus (and yes, I freely admit to having bias) should be where you spend your marketing money. This week the Tribune Company who own, amongst other things, The Los Angeles Times, the Chicago Tribune, ten other newspapers and twenty three television stations, filed for bankruptcy protection. The company has crippling debt and no one should be surprised.
When I speak to Realtors about where they spend to advertise they often say, "Sellers expect to see their home in the local paper." I counter this with "But how did the seller find you?" The answer is invariably "Online" and it's the same answer if you ask the seller, "Where are you looking to find your next home?"
The most over used statistic in real estate is some version of "X% of people start their search for a home online." The X is normally between 70% and 90%. We all know this fact, we've known it for a long time, and yet many Realtors still refuse to spend between 70% and 90% of their marketing budget online. Am I missing something?
As we move toward 2009, I expect to see fewer Realtors working for more listings. Some will do well, others not so. Where you stand in that line is entirely in your hands as you and you alone decide where to focus your attention.
Within our own organization we are increasing efforts across the board. With only 11 days of the month gone, we have already hired additional staff, rolled out new products and are deep in discussion about new features for 2009. One product alone has garnered over a thousand new clients and that's in six days! Our focus for 2009 will be to add significantly more features (and therefore value) to our existing AgencyLogic product line, to increase support hours, to solicit feedback from clients past and present, and to try and make the job of marketing a home far simpler for our clients. Naysayers be gone! On that note, I hope you all enjoy a very happy holiday season and New Year that will be healthy and make you wealthy. You know you can make it so!
And as always feel free to contact me personally, at any time, for any reason.
Stephen Fells,
CEO
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