Last year, leadership at the National Association of REALTORS® tasked the Strategic Thinking Advisory Committee “to develop a wide-ranging list on the threats and challenges facing the real estate industry in the next 3- 5 years.” The result was an exhaustive study called The Definitive Analysis of Negative Game Changers Emerging in Real Estate Report, better know by it’s acronym, The D.A.N.G.E.R. Report.
The report, by design, does not address solutions. Instead it seeks only to clearly define the problems. On first read that may sound like a waste of time. I even joked about it at its launch. However, As Michael Oppler noted in a recent NAR sponsored video addressing the report, “I’m reminded of a fascinating quote by Albert Einstein, and he said if he only had one hour to save the world, he’d spend the first 55 minutes defining the problem and only five minutes looking for the solution.” In reviewing it in more detail, I think there is some merit in this approach.
A1: Masses of Marginal Agents Destroy Reputation
The report contains five sections – Agents, Brokers, NAR, Associations, MLS – with ten dangers per section, ranked by probability, timing and impact. At the very top of the dangers impacting agents, Danger A1, is this, “Masses of Marginal Agents Destroy Reputation.” The report further defines the danger this way: “The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents,” the report says. “This knowledge gap threatens the credibility of the industry.”
Let’s Spend Five Minutes Looking For A Solution
If you want to solve for this danger, one of the first thing you’re going to need to be able to do is identify who these part-time, unethical and/or incompetent agents are. You need a way to understand who is and who is not serving their clients as a true fiduciary. Unfortunately, the industry’s current reliance on simple ratings and reviews is not going to serve that purpose.
You don’t have to look hard to understand why. I can scroll through pages and pages of agents on any real estate rating site before I get to an agent who has less than a five star rating. Even when I get to the bottom of the list, I’m dealing with differences that have no possible way of helping me identify who fits the description of the agent described in A1 of The D.A.N.G.E.R. Report. It is quite possible for two agents to both have 5 star ratings and one of them not be very good at their job, but very good at cherry picking who they direct to go to bat for them on ratings sites. If the industry thinks the onslaught of agent ranking sites is going to help them solve this problem, it is gravely mistaken
We Need A Canary In This Coal Mine
We see this all the time at RealSatisfied. Two agents have the exact same customer satisfaction rating. The assumption you might make from looking at the ratings is that they are both great agents. Perhaps. If that was all we had to help us understand, we’d be no different that the agent ranking sites. The difference we have is this; we expose what we like to call “canary in the coal mine” data points that, like the gases canaries detected in new coal mine seams, are invisible to anyone but the brokers who use our system.
I’ve written about this before. Absence of feedback is not a sign of satisfaction. “The absence of feedback is not a sign of satisfaction,” wrote Vala Afshar, Chief Digital Evangelist at Salesforce. “Indifference is awfully quiet and the true enemy.” It is an invisible gas that requires other information to uncover. Like response rates and send rates.
One of the most interesting pictures that can be painted by the data we collect for our clients, if they’re using RealSatisfied correctly, is the picture of indifference. Customer satisfaction ratings are not built by the indifferent. They are built on the backs of those who care enough to take the time respond. This is just one of the reasons why it’s possible for two real estate agents to display matching customer satisfaction scores, and have two completely different levels of true customer satisfaction.
I’ve used this example before, I’ll use it again: Agent A closes 10 deals and sends a RealSatisfied customer satisfaction survey to 10 clients and 7 clients respond to the survey. Agent B closes 10 deals and sends a survey to all 10 clients and 3 clients respond to the survey. Both agents informed their respective clients that a survey would be sent at the close of the transaction. Both agents work for the same real estate brand in the same office. Both agents receive a customer satisfaction rating of 97% – Agent A based on 7 responses, Agent B based on 3 responses.Which agent has happier, more engaged customers? I’d argue Agent A by a wide margin.
There are other data sources to be used as well, like “consistent sending.” Let’s use a similar example, and please notice the nuance: Agent A closes 10 deals and sends a RealSatisfied customer satisfaction survey to 10 clients and 7 clients respond to the survey. Agent B closes 10 deals and sends a survey to ONLY 3 clients and all 3 clients respond to the survey. Both agents informed their respective clients that a survey would be sent at the close of the transaction. Both agents work for the same real estate brand in the same office. Both agents receive a customer satisfaction rating of 97% – Agent A sent surveys to all 10 clients, Agent B sent surveys to only 3 clients, refusing to send surveys to 70% of the people they worked with.Which agent is more confident about the service they deliver to their clients? I’d argue Agent A, without question. Which agent is more likely marginal. I’d argue it is Agent B.
Using Customer Satisfaction Surveys As Your Canary
We see a wide variety of behaviors around the sending of customer satisfaction surveys in our ecosystem. Some offices clearly do a better job of training agents on how to communicate with clients about the importance of feedback than others do. Those differences have a major impact on response rates, and they have a major impact on send consistency as well.
In an environment where surveys are sent for every completed transaction and where agents are consistent in informing clients that a survey will be sent by a neutral third-party at the close of the transaction, wide variances in response rates can certainly be a signal of indifference, and agents who consistently opt out of sending surveys to their clients create a different signal. Brokers who are paying attention have the opportunity to help agents uncover what might be causing those differences, and helping them fix those problems could be a key to unlocking increased referrals and improved performance.
If “marginal agents” are indeed the number one danger facing agents, then brokers are the key to solving the problem. The kind of data required is not visible to the public in our system, so change will only occur if brokers and agents take advantage of this information to assess the danger in their own environment, and create the right environment to eliminate the danger.
Creating The Right Environment
None of what I’m talking about is possible unless the right conditions are present. The following must be in place before anything can be inferred from any comparative data.
- Brokers must provide agents with proper training and tools. Agents need to be equipped to properly inform clients about how their performance is being measured and why their feedback is valuable. Tools can include printed pieces included in listing presentations and at closing and “scripts” agents can use to ensure clients are aware of coming surveys. We have created some templates to act as a guide: North America: Download The Full Package Australia: Download The Full Package
- All closed transactions need to be surveyed. Suffice it to say, in an environment where some agents survey all clients and other agents cherry pick who receives surveys, nothing can be inferred from response rates. The indifference in that situations sits with the agent, not the client. That’s a whole different issue.
- Response rates should be closely monitored. Client response rates need to be seen as a leading indicator of customer satisfaction health and brand strength. Happy clients are willing to provide detailed feedback. Top performing agents in our system have significantly higher than average response rates. We see it time and time again.
We have the solution to A1 of the D.A.N.G.E.R. report… and we’re ready to help.