So can you remember back to the days that a new company called Federal Express announced that it would deliver a package anywhere in the Country over night? Guaranteed.
I do and I can also recall that other delivery services like United Parcel Service and the U. S. Post Office paid little attention to that announcement. After all, what consumer in their right mind would pay the exorbitant fees that Federal Express charged and why would anyone not want to use the historically oh so reliable U. S. Postal Service, the trusted “Big Brown" or for that matter, just use a FAX machine? Answer. Everyone. And so how did this thing called Federal Express happen?
It happened because the consumer wanted it to happen. Federal Express knew the secret wants and needs and frustrations of the consumer and they knew these were the basis for the design of something new and very big.
Overnight that company called Federal Express became a common household name, not unlike Kleenex. The company became so popular that within just a few short years, the consumer had shortened its trusted brand name to be simply, FedEx. And when "you absolutely, positively had to get there overnight", you simply FedEx’d it.
So that should do it. End of story, FedEx founder Fred Smith stopped there and all is well at FedEx to this day. Right? Wrong. Smith knew that the consumer always gets what they want. And that want they wanted could be at FedEx or if not, it will absolutely be someone else. And he was not going to let that happen. He had the lead and once he got it, he was determined to innovate and change to keep it.
Now see the ad sent to me this week as a FedEx user below.
The FedEx company went on the deliver on to innovate for its customers and to deliver then expand its delivery on Saturdays. For, of course an extra fee. And then it also progressed to ship literally anything, anywhere in the world. And now this week it announced that it will deliver all seven days of the week - this time for not a penny more. So why would a clear industry leader constantly change the way it does business? And why would they remove fees that at one time were perfectly acceptable to the consumer?
It’s simple. Because they wanted to. It is the core of the way that they do business. They understand that what the consumer wants, they will ultimately get.
That’s right, they wanted to delight the consumer with a simultaneous value added service and a substantial fee reduction. They could have just added Sunday delivery for an extra charge, but no, they did not do that. So guess what is about to happen now? Watch as UPS, the USPS and the other overnight carriers follow suit. And who is the outright winner here?
It is always the consumer first and the business next. One leads the way and the other is sure to follow.
So now let’s look at real estate and how we have managed enhancing the real estate experience for the consumer. And you guessed it, all I hear out there is crickets.
Sadly even the biggest and most powerful forces in the real estate industry today have refused to change anything and expect to keep everything. Our business processes have not changed since the times of the T Rex and our pricing model for our services is considered to be the ultimate sacred cow. And then, when others enter the business with a changed model we scorn them as discounters or as nothing more than short-lived, shiny objects. And therein lies both the challenge - and the opportunity.
Do you think that any consumer believes that FedEx is a discounter just because they added value and reduced their price? Would any person on the street, if asked, say that FedEx is sure to fail because they voluntarily “took to zero” the entirety of their premium services revenue? If you think yes, I suggest you think again.
FedEx as a giant in its business category made a fundamental change in its pricing structure to first, delight the consumer and second, in an effort to dislodge the same consumer’s business from its competitors. Those two things go hand in hand but note the order. Consumer first, then you next.
And just because all of the other players in the industry are like us, nothing changes so we believe we are doing great. And that is so wrong. Why do you think each year the NAR holds its breathe and announces the average commission level in the industry. And each time that they do that, the rates drop. I can almost see the brokers all over the Country squinting in pain as they hear the stats. And I can hear the sighs each time the drop in fees allows them to remain viable for another year. So why do we know that the level of our fees will drop year after year? And the real question is, why are we still not doing the things that would cause those fees to increase year after year?
The issue we have in real estate is that all too often we measure change on the magnitude of what we must do to survive, not on what we should be doing to thrive.
I believe that brokers in this business live by the old adage that if you always do what you have always done, you will always get what you always got. And that is good enough for them.
If your’e reading this and say, not me Ken, then I say to you, prove it. If you want your company’s brand to become a household name, you are going to need to do more than just what you are doing today. Way more. But the good news? Nothing is stopping you from doing just that now. Nothing.
Your agents are out there pitching the same old things that the consumer has disliked for years, they are using processes that are archaic by design, they are doing things that generate needless emotion throughout the transaction and most of all, they are not thinking before they say something with a consumer-first mentality. You are the leader. Your are the Fred Smith of your business and you need to take control and lead your business in your market to a different and better place.
So what can you do today that would signal to the consumer that contrary to your historical agent-first mentality, that they come first in your world? Think about it, challenge your executives to provide tangible ideas and then go do something.
Be FedEx, be bold, proactively signal to the consumer that they are first in your world, surround yourself with a team that believes that is what must be done always and then watch what happens. You will be amazed at the result.
I hope this helps.
Have a great day!