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A Brief History of CRM & Who Will Survive? - Part 1

By
Real Estate Technology with RE-ACT, LLC

Currently, there are about 40 Real Estate specific CRMs (Customer Relationship Managers) and they are surprisingly unique in many respects. Can the industry support them all? If not, how do you pick one that is most likely to survive?

Moving from one CRM to another is very costly in terms of loss of data and the investment of time in a new learning curve. If at all possible, you want to pick the right one the first time.

The very first Real Estate specific CRM was Howard Sanderson’s Howard & Friends in 1982. Around 1986, another came out called Real Estate Specialist, which I used for about 5 years. Top Producer was released in 1989, followed by Online Agent (which was later renamed to Agent Office) in 1992.

Howard & Friends was a much loved product and many still speak of it fondly. I preferred Real Estate Specialist because I didn’t like having little wizards telling me to wait while Blinky gathered my database. What can I say, I was a computer operations manager in my prior life. Howard & Friends took too long to make the transition to Windows and Real Estate Specialist never did. They were both such small companies that they couldn’t afford to do some of the things necessary to remain competitive. Imagine how small the market for CRM was at that time and how difficult it was to get the word out pre-Internet. They also lacked marketing funds and expertise. When Top Producer started gaining ground, Howard & Friends and Real Estate Specialist couldn’t keep up. Top Producer has always been aggressive in their marketing and has retained the number one market share as a result. Top Producer then affiliated with Century 21 and that, as they say, is history. Agent Office was released in 1992 and very quickly affiliated with RE/MAX. Agent Office was then promoted on the RE/MAX Satellite Network featuring Jim Casey’s training videos. Thousands of agents were exposed to it and Agent Office took off, maintaining the number two market share for many years.

From 1992 through approximately 2005, the only Real Estate CRMs of which the vast majority of agents were aware were Top Producer and Agent Office. Both were good programs, but there was certainly room for improvement.

Most Real Estate specific CRMs currently available were released three to six years ago. Having personally interviewed 30 of the CEO’s and developers, I can tell you that most were developed by people with a software background who became real estate agents. When they looked for a CRM, all they could find was Top Producer and Agent Office which was insufficient for their needs. Deciding they could do better they left Real Estate sales on a mission to build a better CRM. In 2006, these entrepreneurs would have seen a market of Real Estate licensees comprised of 2.63 million according to ARELLO. It was reasonable to project that there was room in the market to compete with Top Producer and Agent Office but there were two factors that could not have been foreseen. One was that the number of agents was about to drop by 20 percent. Today there are approximately 2.1 million. The other was that the competition in the CRM business was about to increase dramatically.

There are estimates showing that only 50% of that 2.1 million agents are making a significant income. We can say that is a low estimate and for the sake of argument we’ll say 75% is a high estimate. Now guesstimate what percentage of agents are actually using or are planning on using a CRM. Based on polling about 10,000 agents over an eight year period, I found that number to be about 20%. Based on my day-to-day conversations I believe that percentage is increasing though. For the high-end let’s double that and call it 40%. Work out all these numbers and the result is a market size of between 200,000 and 900,000 agents. But remember, the 50% and the 20% are supposed to be the real numbers. The low-end.

If the high-end is more accurate that would be enough for more CRMs to survive. If the low-end is,  that is not a very large market in which to sell a software product, especially if you have competition. And what none of those developers could have known is that they were one of many working on the “new best CRM”, all at essentially the same time.

There were a few CRMs here and there that were being released over the years, such as Advantage Xi in 2002, but 2005 was when the pace started to pick up. About six were released between 2005 and 2007 including Agent360, Agent’s 1st Choice, Busy Agent Pro, and Realty Ware. In 2008 though, the flood gates burst wide open. About 15 new CRMs came out that year! Among them were: Address Two, Agent Business Builder, CRM Real Estate, Easy Broker, Market Leader, Masterdigm, More Solds, My Real Estate Tools, Net Aspects, Plan Plus Online for Real Estate, Realty Promoter, Prospects, Sharper Agent, and Simple Remote. In the last two years, four have gone out of business, including Agent 360, 360 Agent (yes, they are two different CRMs), Simple Remote, and Real Time 2020. I think another one is about to go down as well, and it was a well known one. I have to confirm it before I can write about it. Since 2008, several more opened their doors, including IXACT Contact and Real Estate Client Management.

It is significant to note that also in 2008, Emphasys Software bought Agent Office from FNRES. The last upgrade to Agent Office had come in 2007 to make it Vista compatible. When Emphasys bought it, they maintained that they were going to continue to upgrade it, but have since opted not to do so. My assumption is that they felt it was a better idea to create a new CRM than to re-write the old one converting it to a better/newer software language.  Several years ago, my contacts at FNRES had told me that was what really needed to happen for Agent Office to progress. So after 18 years, the Agent Office that many of us came to know and love will eventually be phased out. Emphasys Software has now created a completely new and different product that is an Outlook add-on and they are calling it Agent Office Personal Edition. It bears no resemblance to Agent Office other than its name.

There are now about 35-40 Real Estate CRM products competing for a probable maximum of 600,000 buyers. My best guess is that the top four or five CRMs, of which Top Producer and Agent Office are two, comprise a user base of at the very least 150,000. There have been five failures in the last two years and I would expect a good number more in the next few years.

Next time - Part 2:

What questions should you be asking when evaluating a CRM that will give you a little better idea if they are on the right track to surviving in this highly competitive market?

Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Gary - very interesting post. I think, in addition to this list, there were some CRM, which are not real Estate specific, but were easily customizable.

Also, there was Wise Agent, I think

Mar 02, 2012 11:17 AM
Tim Bray
Seaport Real Estate Services - Mystic, CT
B.S. Real Estate (UConn)

Great Post Gary. What do you think about ACT?

Jul 14, 2012 10:21 PM
Gary David Hall
RE-ACT, LLC - Doylestown, PA
Real Estate CRM Sales, Training and Implementation

What I have been hearing from users of ACT! since Sage bought it are not good things. That aside, it is not a Real Estate specific CRM so I don't recommend it. The ACT! for Real Estate reviews have been abysmal as well. Following is an excerpt from my book, about generic as opposed to Real Estate specific CRMs:

Real Estate Specific – RES. There are many very powerful and versatile non-RES CRM solutions available. There are more and more people who have no Real Estate background, who are working with Real Estate licensees to help them with technology. They have a tendency to recommend non-RES CRMs to Real Estate licensees. Why? Because those are the CRMs with which they are familiar. There can be a significant difference between someone who works with Real Estate licensees to ascertain what they need, and someone who once was a Real Estate licensee, and knows what they need from that experience. Outlook, ACT!, Goldmine, Maximizer, SalesForce, Prophet, InfusionSoft, SugarCRM, and hundreds of others are very good CRMs with a widely varied arsenal of feature sets and capabilities. The problem with them is that because they are not created specifically for use by Real Estate licensees, they typically flow in a manner more closely related to non-Real Estate sales environments. In some respects, RES CRMs need to be more like that, but the downside is that they require a significant amount of customization and work-arounds. As powerful as some of those non-industry specific CRMs might be, even with whatever modifications or add-ons might be possible for them, they will still usually fall short of what a quality RES CRM will do for you right out of the box.

 

Have you ever known someone who built his or her own Web site? Maybe they had a background in a related field, which gave them a leg up on designing their own Web site. The question is how long it would take them to:

 

  • Learn HTML

  • Learn a Web site editing software

  • Build their own site

  • Maintain it according to advances being made in that industry

 

If you are doing that, why not just get into the business of building Web sites? The answer is because you can make much more money in Real Estate sales, and you have already chosen to do Real Estate sales. So why would you spend literally hundreds of hours doing something you could pay someone else to do who could do it better and faster? Why indeed, when you could go out and make more money, and more quickly learn your chosen profession rather than someone else’s.

 

People tend to think that if they do it themselves, they are saving money. That could not be farther from the truth. The fact is that in order to grow your business in Real Estate sales, you need to be prospecting consistently. When you instead use the time you should be prospecting to customize software, you are costing yourself a great deal more in lost sales than you are saving in buying software designed for what you do. You can justify it by saying you simply do not have the money, which may be true. If you are honest with yourself, you will know that what you may also be doing is avoiding prospecting. Think about that very hard. Do you spend more time on technology than you should, when you know you should be prospecting? You would not be the first, nor will you be the last. It can be a fine line.

 

Are you one of that group of Real Estate agents who uses one CRM for a year or two only to change to another one that seems better for another year or two? How many have you used? The reason you stopped using the last one was that it did have a few features that you wanted. So the new one has them, but it does not have others that you already had. So the time you saved is far outweighed by the time lost learning another new CRM. If your current CRM is woefully inadequate for your purposes because you have outgrown it and now have greater needs than you once had, then by all means look into replacing it. If you are just being annoyed by a few inadequacies, consider staying with it. Make suggestions to the vendor, and maybe you can hope to see the changes you need made in a future release. A few shortcomings take far less of your time than learning a completely new CRM.

Jul 18, 2012 12:30 AM
Blunier Team
Keller Williams Realty - Albuquerque, NM

Hi Gary,

Curious to know what your thoughts are on Plan Plus from Franklin Covey.

Aug 20, 2012 03:26 PM
Gary David Hall
RE-ACT, LLC - Doylestown, PA
Real Estate CRM Sales, Training and Implementation

I don't share opinions of my affiliate's pros and cons on line. I will do that in private. That said, searching for a CRM isn't really about whether I like it, or people like it in general. That comes second. First you need to establish if it is the right one for you based on what you need it to do for you. If you go to the following link on my site and fill out the free e-mail questions I'll point you to the ones that I feel best suit your needs. http://garydavidhall.com/CRMSelectionHelp.htm

Aug 20, 2012 11:12 PM