"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.
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