I recently received an email post on the Wintotal User Forum from Adam Calvery. Adam is a VP product manager with Alamode - and allowed me to republish his email below. This is some great information to consider when thinking that we have now somehow lost income in a new appraisal world, likely to be dominated by Appraisal Management Companies!
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As a software vendor, I'm not involved in running an appraisal business daily, but I understand what appraisers deal with. As someone who's been with a la mode for nearly a decade, and being the outgoing type, I've been lucky enough to create numerous relationships with our customers that go beyond the standard "vendor-client" status. The result being I get exposed to thoughts and concerns of appraisers that go much deeper than the surface. And at the end of the day, I'm a marketer concerned with how, what, why, where and when the products and services Dave made me responsible for are positioned and sold in the marketplace. My work life revolves around staying in tune with my customers and their industry, plus staying in tune with the marketing profession just like you stay in tune with the appraisal profession.
My point in mentioning all that is to say I understand your job and your challenges. And I understand the challenges you face in producing, marketing and selling your own services in the face of an industry undergoing massive changes. So, having said all that, here's why I disagree that you guys have lost income you can't replace. And by no means am I downplaying the impact of the HVCC (if in doubt, just take a peek at www.AppraisalPress.com to see what we think of it).
It's been my experience that, in general, appraisers aren't comfortable with marketing (that shouldn't be a news flash to any of you), appraisers give up on marketing too quickly (that might be a news flash), and that appraisers as a whole are virtually ignoring the non-lender part of the market (that probably is a news flash).
You offer a professional service and there are clients who have a demand for what you supply. Change is the only constant, so given new AMC roles, new Fed "guidelines", the HVCC, etc, the smart move then is to proactively try to find other markets where you can sell your services so you're not solely reliant on, specifically, lender work. Again, in my experience, the reason that appraisers aren't comfortable with marketing is natural - it's not your primary job and you've never had to do it before like you need to do it now. So the first step is to learn about it so that you are comfortable with it. Like most things, learning the fundamentals isn't necessarily difficult. It's the execution that gets tricky. Go to Barnes & Noble and find some books on it. Join www.MarketingSherpa.comto see what the pros are finding to be successful in website, e-mail, print, social media and brand marketing. That site is a reference for big and small companies alike, both B2B and B2C.
Next, don't give up on your marketing plans and goals. Realize that it takes time and effort to generate results off your marketing. And by time, I don't mean a month and two attempts. I mean it has to be ongoing, and it takes lots of time, over time. Statistically, research shows that it takes seven exposures to your marketing before the average person even remembers you and/or takes action, regardless of industry. Sometimes it takes a lot more than that. There are people using ACI we've been after for years. :)
But you can't give up, and you have to do it constantly. It's not a secondary thing to appraising. It's every bit as important, if not more so. Especially now. I could go on for hours on this topic alone. Learn about marketing and don't ever give up on it.
You've got to go after non-lenders not because of the HVCC, fee cuts, or the rest of it. It's a RIPE market segment. RIPE RIPE. IMO, it's a waste to not spend significant amounts of time trying to diversify your client base to include non-lenders. It takes time to develop those relationships, but it's never too late to start. I know loads of appraisers who've attempted this, but gave up after just a few months or a few attempts with XSellerate. Over the years, appraisers have become accustomed to creating a new contact or client, and almost instantly (i.e. a few months) seeing orders start to come their way as a result. In any other industry a vendor (you) making a relationship that bears fruit in two months is virtually unheard of. Many of you guys have worked in other industries before, and you know exactly what I mean. But non-lender clients don't typically develop that fast, and so it's easy to give up much too soon.
I also hear a lot of our customers say essentially, "bah, there's not enough non-lender work to be worth the effort." Bull. Yes, I said it and I'd say it face-to-face. Divorce and Estate attorneys, for example, have virtually no idea how to find an appraiser for doing expert witness work and dread the process of finding one because they're on the hook to their client if the one they find is a dud. Case in point: they have a book they refer to when looking for expert witnesses. A guy I know told me recently that when he was in his lawyer's office, he flipped through it and there were two (2) appraisers in it. (Yes, I'm trying to get info on that book.)
How about homeowners? There are roughly 200,000 lender-client type contacts in the USA (less now). There are what, 18,000,000 homeowners? I personally know an appraiser that has printed up branded door hangers that say in essence "Our local market has seen home values change greatly over the last several years. Do you know what your home, probably your largest investment, is worth now? I know this market and I can help you find out." At every house he appraises he walks up and down the entire block, both sides, and leaves those door hangers. After a while, he started to get enough hits that losing some traditional clients due to the HVCC didn't matter nearly as much as if he'd not done that. And he's not alone in this new tactic.
How about Ron Stalzer? He's on this forum. He's taken our advice with his XSite and XSites Desktop, and as I understand it he's seen a huge jump in the leads he's capturing online and converting into paying customers.
Lists are important too, especially for outgoing marketing like e-mails, postcards, face to face visits, etc. You can buy and rent lists from list vendors like www.InfoUSA.com, or from professional organizations. We get a lot of information about appraisers from the ASC list that's publically available. Many industries have similar possibilities. But good lists are the key to good returns.
In my opinion, love it or lump it, you absolutely can replace income lost because of the HVCC, provided you treat the marketing of your business as seriously as you treat your job as an appraiser. And I absolutely understand that it's tough to make that switch. Many of you know Matt Krodel that's been here for years. He uses the analogy of a gym membership. You can get a membership and admit you need to work out, but you're not going to get any results if you never actually do it and change your habits.
Whether you change your processes to be able to profitably work with AMCs or not, there is zero harm you can do by trying to acquire non-lender clients. All you're doing is diversifying your client base so that you're not dependent on one or two major ones.
I apologize for the length here, but this is a subject very near and dear to me. Both personally and professionally, everybody here at the Intergalactic HQ in OKC, plus our Quantum Fighter Wing in SLC, wants you to succeed. We've been banging the "marketing drum" for years now, put out XSites and XSellerate years ago to help you with marketing, released XSites Desktop last year to help with the same, continue to hold classes (new schedule coming this month), and have been banging about it in AppraisalPress. But it takes time and multiple exposures to get people to remember and take action. :)
And with that, I will relinquish the soapbox. If you read this far, you're a trooper. :)
Adam Calvery
a la mode, inc.
Adam Calvery, VP, Appraiser Products
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Let's hope we can all find a place in the new HVCC world! Good luck to all you appraisers out there!
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