Reputation Architecture: How to multiply the effects of 'Remarkable Service'

Real Estate Agent

"I think we live in a new age of transparency, which is a great thing if you're fantastic at customer service. Customer service is the new marketing" ~Jeremy Stoppelman, CEO of Yelp

The real estate industry is on the cusp of the biggest shift in marketing strategy ever. Over the last few years we saw the widespread adoption of blogging and social media, and the decade before that was characterized by IDX-based lead generation. The future will bring the age of Reputation Architecture, and the real estate professionals who execute on this change will be highly rewarded.

The effectiveness of capturing leads from an IDX home search has been declining over the past few years, and will continue to decline until it becomes obsolete. Home buyers are in the driver's seat. Every day they get better at protecting their privacy, screening incoming contacts, and ultimately ignoring salespeople.

"Our word-of-mouth systems, like Twitter and Facebook, are more efficient than ever before, which is causing companies to see faster and bigger spikes in usage." ~Robert Scoble via Quora

It's more than just Twitter, Facebook, and the efficiency of web 2.0 "word-of-mouth systems": it's in the way that we share knowledge. Our collective intelligence used to be limited to one-to-one recommendations by trusted people in our personal network, but we are now entering an age where the wisdom of crowds will rule. As the Internet becomes more intelligent it is able to attach meaning to ever more granular things, and we are coming to a time where everything will be reviewed, rated, and categorized. 

Adoption of user rating reviews by type over time

As shown in the graph above, we've seen the widespread adoption of reviews for things like cars, consumer products, travel destinations, and most recently, local restaurants. We are now entering a phase that will focus on user reviews of individual service providers, like your local mechanic, hair stylist, message therapist, and real estate agent.

To see the effect this will have on your business tomorrow, you need only look at what's happening at your local restaurants today. The restaurants with the highest user ratings on Yelp are seeing a disproportionate amount of the business. This is in line with the Pareto principle, also known as the 80-20 rule, or "the rich get richer". Here's an example:

There are over 5,000 Seattle restaurants listed in Yelp. As shown in the graph above, the #1 ranked restaurant is ten times as popular as the 40th restaurant. This is also roughly in line with Zipf's law. When professional ranking reaches mass adoption in the real estate industry we will see a similar result.

The goal of this post is to make the members of our network aware of this coming shift. I have no magic product or service to sell that will guarantee you success in the coming months and years. My greatest hope is that this post will serve as the catalyst to the start of a conversation; one that will lead to our community coming together and conceiving a strategy that we can collectively use to capitalize on this coming opportunity.

Personally, I am looking forward to this age. It will be defined by a flight to 'quality of service' where the real estate professionals who provide remarkable service will be rewarded

"I bet if they had Yelp in 1850, nobody would have taken the Oregon Trail." ~@badbanana via Twitter 

Comments (136)

Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

Jon-    Is this what the upcoming RainCamps will be focused on?  I had heard that they will be very different from those in the past, and Kerrie did link your post to her announcement.  Sounds great to me!   My daughter and her husband have used Yelp and several other platforms to review their Sea Kayaking business in Alaska ( and have increased their business ten fold during these tight times.   She feels it really helps!

Feb 09, 2011 08:18 AM
Mandy Kruse
Keller Williams Realty Integrity NW - Zimmerman, MN
...It's All About You.

Hi Rich,

I am new to this whole Active Rain thing and "blogging." Actually, I haven't even done it yet. I have my profile set up, somewhat, and that is about it. I am wondering if there is a way to get someone to walk me through a few things as well as kind of be a "mentor." Any ideas on how to go about doing something like this or how to get started? Thanks!

Feb 09, 2011 08:18 AM
Lynn M. Bower
John R Wood Realtors - Naples, FL

Service is putting yourself in the buyer/sellers shoes. Treat "them" as you would  like to be treated. Simple straightforward. That's why my phone is always answered...when I'm able and emails are responded to  immediately

Feb 09, 2011 10:39 AM
Mike Schneider
10 YRS with Active Rain ! - Lake in the Hills, IL

exceptionally interesting trying to digest it and i appreciate all the sharing going on.

I know im involved with Yelp but not very clear about it. So now i will look at it more thoroughly...

Thanks to all........Mike

Feb 09, 2011 11:05 AM
Dennis Neal
RE/MAX, Big Bear - Big Bear Lake, CA
Your Home Sold in 21 Days or We Sell It For Free

I love Yelp and use it all the time. Now is a great time to up your game in real estate.

Feb 10, 2011 06:31 AM
Debbe Perry
Real Living Carolina Property - Morganton, NC
828.439.3084 Morganton/Lake James NC

LOVE this concept as a basis for discussion for this year's RainCamps. Wrote a blog some time ago that included some of these concepts that you had mentioned earlier - read if you have a chance:

Synchronicity: Customer Service and Social Media

Feb 10, 2011 06:48 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

I for one look forward to a day when agents who get a house sold and the Sellers are so furious with them because of the way they handled them and/or the deal, won't be able to hide behind the fact that the Sellers were moving to another state. We all grimace when we have to deal with these agents but in the future, the public will be forewarned...

Feb 10, 2011 12:46 PM
Kristina Heili
Keller Williams Premier Realty - Woodbury, MN
Comprehensive Real Estate Services

I love AR and people like yourself who are energetic and filled with freshness and are willing to share it with the rest of us. Great new information for me. Never had heard of Yelp but will make it a priority to research it out and become an early adaptor of this remarkable opportunity.

Feb 11, 2011 06:05 AM
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Boasting/bragging  is no longer acceptable, one must prove that they have the real estate chops to be outstanding/remarkable. If not, the public will go else where. 

Feb 14, 2011 04:05 AM
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Jonathan- Sorry I missed this post when you first wrote it. I was in Canada visiting my newest grand baby and I took my 8 yr old son with me. Amazing that I am a grandmother and still mommy. My son is an uncle of 6. :) 

Personally I don't like YELP. It is Too easy for your competitors to make bad reviews and even slanderous reviews. We have seen this on YELP ( not in our area) and they do not care. It is like Google who wants to pull up one bad review to counter a good review. 

Reputation management must be used offensively and setting it up before anything happens because truth be told, you can think all you want about what great service your provide but if you do any amount of business in this business you are bound to P*^s somebody off. That is part of being in the biz world. If you are doing any kind of volume you can not please all the people all the time. 

Someone who wants to say something bad about you will go through all kinds of steps and hoops to get it online. But someone who is happy with your service is not going to go through those same hoops. We are proactive in our reputation management even though YELP and other portals are rarely used here. 

You guys on the west coast, YELP, Judy's Book and all that is a part of everyday life. Here in the deep south, it has not caught on. We are a few years behind the west coast in going this way. Word of mouth is still the biggest source of referrals and in a small horse community it is likely to stay that way for a while. 

That being said, we are there for when it does arrive:) if that happens before I retire we will be set, if not, well, it was a good exercise:) Katerina

Feb 15, 2011 05:37 PM
Janice Roosevelt
Keller Williams Brandywine Valley - West Chester, PA
OICP ABR, ePRO,Ecobroker

Jon- thought provoking indeed- there is still such manipulatio online that I continue to feel "real deal realtionships" will reap the greatest rewars in terms of # of transactons per lifetime and referrals they make.

Mar 05, 2011 04:21 AM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Just stumbled upon this post. Never heard of Yelp until today. Once I went online to find a restaurant to go to while on vacation. One of the reviews said a particular restaurant was kid friendly and had children's menu. When we got there, nothing could have been further from the truth. I'm sure my experience is not the only one out there. If I wouldn't trust an online service to tell me the value of a restaurant, why would I use it to find a real estate professional?  I think agent/broker rating has a long, long way to go. Just sayin'

Mar 06, 2011 04:28 AM
Tim Peterson
Wisconsin Realtor Safety and Concealed Carry Classes - Madison, WI
Realtor Safety Training Classes
Interesting post with great stats. I too had never heard of yelp before but am going there right now. Thanks
Mar 07, 2011 06:39 PM
Linda Lohman
Fonville Morisey Realty - Cary, NC
Former Teacher/Broker

Very powerful stuff.  I look forward to the conversations on AR.  i really need to start implementing Yelp in to my business.

Mar 08, 2011 11:30 AM
Kate Bourland
Marketing with Kate - Redding, CA
Onlilne Marketing Mobile Marketing

The world is getting increasingly smaller. I'm seeing one person in my area who is mis using this right now.  Eventually it will catch up with him.  Really powerful thought and something that every business person should consider.

Mar 12, 2011 07:34 AM
Kathy Kenney
Keller Williams, Princeton, NJ - Robbinsville, NJ
Realtor - Princeton & Central NJ Homes for Sale

Looking forward to learning more about this at RainCamp in a couple of weeks!

Mar 15, 2011 10:57 AM
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Jon - I came to the party late. But better late than never, I guess.

Here's what I see - it's not that I dont share the same sentiment as you do. But my daily connections with my highest researched and most prepared/ read up clients can only get some much from reading.

Also visiting a restaurant and yelping about it is in no way related to the customer service of real estate  brokerages.

Mar 17, 2011 03:09 AM
Allison Stewart
St.Cloud Homes - Saint Cloud, FL
St. Cloud Fl Realtor, Osceola County Real Estate 407-616-9904

Jonathan- I could not agree more that consumers rely on ratings when making determines of whch services or service providers they are going to use; take for example the popularity of Consumer Reports for product information.  The increasing use of these types of tools are testimony that the future of the industry is changing.

Mar 30, 2011 01:14 AM
John Grasty
for real estate results in the Tri-Cities. - Port Moody, BC
Your Tri-cities REALTOR, neighbour and volunteer.

Any news on the Raincamp itinerary for Seattle yet?

Mar 30, 2011 02:08 PM
Rob Peters

In today's hyperconnected world, organizations have an opportunity to build their reputations not through outdated marketing campaigns, but by engaging, earning and capturing their Relationship Capital (RC) through online interactions.

RC is based on open industry standards by which individuals, products/services, and organizational entities have their ”kept-commitments” & ”perceptions” captured and credited or debited to their Relationship Capital Account. We have open standards for financial accounting, but up to now we have not had open standard standards for the capture and measurement for the quality of online social relationships.

This is about to change.

For example, banking & financial services organizations who begin to engage their stakeholders in this open standard can capture their Relationship Capital (RC) and can lead the way in \”out-behaving\” the competition thru transparent and principled interactions that authenticate their reputations and credibility.

We have always judged people, products, and organizations offline, RC now takes this social networking advantage and brings it to the technology-enabled social business world that has emerged.

Aug 25, 2012 11:23 PM

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