We think about technology all the time. At least, I do. And there’s nothing left in property that technology hasn’t touched in some way or another.
Or at least that’s what I thought, until I heard about CoStar’s recent sales masterclass which proves that, regardless of the day or age, some things are never going to change.
American US property data firm, Xceligent, closed its doors in December 2017.for a number of reasons. A major competitor of CoStar, its closure left thousands of former clients without a property data provider.
CoStar estimated that this unprecedented new ocean of potential clients could add an extra $50 million to its annual revenue, and it didn’t need a second invitation to act. What followed was a masterclass in customer relations, proving that when it comes to property, more specifically sales, innovation is squat compared to a little thought and the human touch.
CoStar spent roughly half a million dollars on gift baskets over the Christmas period, hand-delivered to former Xceligent clients. Included within the gift basket was an Apple Watch. In the 13-days between 18th December and New Year's Eve, CoStar signed up 400 former Xceligent clients.
In January, CoStar set off on a 30-city roadshow, travelling across the United States to meet with a further 1,500 former Xceligent clients. As gifts to all of them, CoStar offered yet more Apple Watches, promoting its new product which is compatible with the wearable device.
After this olympic effort, CoStar reported to its investors that each new client brings with it at least $50K in net value, with the potential there for much, much more. All in all, it led to December and January becoming its two largest months of sales in history. In Q4 2017, it reported $254 million in revenue, a 16% increase on Q4 2016.
A lesson to remember
CoStar does, of course, benefit from having the disposable funds to embark on such a rampant sales effort, the likes of which most could never dream of. But it is interesting, I think, that it did so in such a traditional way.
It would seem fit in this day and age for CoStar to have stepped in and pitched the benefits of its products straight down the line. But these former Xceligent clients had been through a rough time with their technological partners.
Accusations of stolen data and an outdrawn legal battle with CoStar were significant factors in Xceligent’s closure. As such, its clients had likely soured somewhat to the concept of partnering with a data company. CoStar needed to regain that trust, even if it hadn't caused the original problem.
To do so, it used the human touch, understanding that technology had left burns which it needed to soothe before embarking on a sales pitch. I think it’s a lesson for all of property, not least agents who are being forced to compete, and often pick up the pieces in the wake of, online agents.
Closer to the community
Perhaps it’s obvious for me to say, but while there’s a lot that online agents can do and high street agents can’t, it also works, probably more so, the other way around.
High street agents have far greater access and insight to the community and, in the face of technological competition, should be looking for ways to harvest the value of this advantage.
In a recent report from law firm Rix & Kay, 76% of agents who were asked said that they were not doing enough to ensure the public is aware of the differences between traditional services and online.
The report also expresses how poorly some online agents are performing, yet it’s them we’re seeing in flashy ads on TV and tube station walls, telling the world that a high street agent is a lesser agent.
And, it’s argued by many, it’s also the online agents who are adding unnecessary damage to the property industry’s reputation with poor services, broken promises and questionable values.
If people really are growing sick of online, there’s about to be a lot of potential business out there for local agents.
Ambassadors for good
Now I think it’s important to explain, even though I think agents should be looking to engage with potential clients in a human way, technology is still a vital part of the picture. But when looking at and choosing innovations to adopt, agents could think less about what might best benefit them, and think more about what bests benefit their clients, both now and in the future.
Tech can help high street agents ward off online competition by providing tools which improve the customer experience and elevate the standard of service, but high street agents also have a significant market advantage which they should never forget to make use of; good, honest customer service.
If business is to be stripped away from so-called 'online agents', it’s definitely worth taking a leaf out of CoStar’s book and doing it the old-fashioned way. And when you do inevitably win new clients, do me a favour, would you? Demonstrate to them the true power of good PropTech, the solutions that have helped make their journey smooth and easy, in the hope that it might repair the loss of faith that some online agents have cast over the industry.
*James Dearsley is a partner in PropTech Consult, digital transformation specialists for the real estate sector. To sign up to James’ Sunday PropTech Review, click here.