Why do they want to disrupt your market?

The big word in the startup world is disruption, as in “We will disrupt the what-cha-ma-call-it market.” Thinking about last week’s discussion about buying a new vehicle, let’s talk about what disruption is and why “they” want to disrupt our market.

Some examples of disruption

Paypal disrupted the credit card merchant account market. Old news, but it’s a good example. At the time, it was a substantial effort for a small business to get setup so their clients could pay them with a credit card – particularly if there was a web site or phone sales involved. You could do it, but the fees and the startup obstacles put in place by the banks offering merchant accounts were a time-consuming hassle. The assumption was that you weren’t as “real” as a business selling hard goods out of a retail location. Paypal knew better and treated these businesses with honor rather than suspicion and contempt.

Ultimately, Paypal made it easy to get a merchant account. They made it easy by allowing you to manage it online. Finally, they made it more secure by creating a layer between the client and the small business taking the payment. The client gained because they didn’t have to reveal their card number to the small business. The small business gained because the “layer” that kept the card number out of the hands of the small businesses meant Paypal took on the security requirements and many of the risks of card payment fraud. More secure equals less hassle. Easier and less risk for all involved.

You can find many other examples of disruption in the finance-related sector – all of them based on eliminating the annoyances and artificial barriers established by long-term players in that field.

Other examples include Uber (Is the cab business focused on being a high-quality customer-centric experience?) and SpaceX (Is the defense / aerospace business is designed to provide the best bang for the buck?).

Why do they want to disrupt my market?

Simply put, because doing business with you or your peers (or both) is a pain in the keister. When you make it hard to deal with you, you create opportunities for startups that don’t mind doing things differently.

How do they disrupt my business? Mostly by taking the hassle out of it. Those who disrupt your market talk to your clients and identify the things that drive them crazy about working with you. What keeps you from doing that? Nothing other than you being stuck in “We’ve always done it that way” mode.

The real estate market is a great example of how businesses get disrupted. Zillow produced a website that allowed would-be buyers to identify properties for sale before they were ready to contact a Realtor. Will they still have to work with a Realtor at some point? Probably. Before they “get serious”, are they required to deal with the barriers that most real estate firms put in place? Before Zillow and the like, it was all but a necessity. At that point, you did things their way on their terms. Today, you don’t have to engage a Realtor until you’re ready to take some action.

Could Realtors have opened up MLS to web access before Zillow appeared? Yes, but they didn’t. Could they have made it easier to shop before getting signed up with a Realtor? Yes, but they didn’t. Instead, the MLS was used as a wall around the property-for-sale inventory. Until Zillow and similar vendors provided access to this data (or a subset of it), there was little if any pressure on real estate firms to implement such systems or radically improve their processes to make them more client-friendly.

Eventually, they figured it out and created a new Realtor.com that competes with Zillow and similar sites.

Realtors are not the target

These types of problems are not unique to Realtors. They are common to many businesses.

If you look at these disruptive new businesses, they’re usually focused on eliminating the market’s pet peeves.

Referring back to last week’s car lot experience, consider the business model that Vroom.com has put together. It’s not perfect, but it does a nice job of eliminating the horse biscuits from the buying process. And yet, there’s not a single thing they’re doing that local car dealers can’t do.

Will they notice and adopt the best parts?

And in your market, will you?

What surprises say about your business

What does being professional mean to you?

To some, it means “Not being an amateur”.

So how does the public differentiate amateurs from professionals?

In some circles, money is the key. Amateurs don’t get paid, professionals do.  For example, an amateur golfer typically isn’t eligible for prize money in tournaments. Once they decide to go pro, they can’t go back to being an amateur.

If not money, training

For others, amateur can imply (sometimes incorrectly) that someone is less skilled than a professional doing the same task, eg: a pro golfer is surely more consistent and better at their trade than an amateur. Likewise, an amateur welder is more likely to produce cold, poor quality and/or “messy” welds than a professional welder.

In other lines of work, being a professional requires a bit more effort than simply deciding you’d like to get paid. Many professionals require internships, experience, tests and/or certifications to prove their mettle. To become a journeyman (professional) welder, it’s likely that you would first learn as an apprentice with an experienced welder for a year or more.

Despite all of these literal and occasionally artificial steps/barriers that prove something (skills, access to funds, etc), I do not believe that the acts of being paid, taking training, passing tests or earning certifications prove that someone is a professional. Some of these things prove that the local, state and/or Federal government consider the person a professional, but we’re talking more about checking boxes (however legitimate they might be) vs. proving something over time.

To me, a professional is someone who consistently meets goals, avoids (if not eliminating) client surprises and demonstrates an ability to solve problems while encountering unanticipated events – all while dealing with amateurs.

Why the “while dealing with amateurs” part? Because most of us are amateurs in the professional’s field when we’re their client.

Getting Real

Due to circumstances within my control, I’ve been involved in a few real estate transactions over the last month or two.

One of these required reviewing some residential rental property.

During one of these visits, I found doors that didn’t close properly, a microwave and disposal that didn’t work, a missing master bath mirror, loose toilets and cobwebs everywhere – along with a raft of eight-legged houseguests.

These things are not unusual. Agents find these things all the time, particularly in places that have been empty a while. The high-performing professionals do their best to make sure these things are fixed before they take a client to a property.

You may remember the story I tell about the real estate checklist an agent uses. The checklist demonstrates a level of professionalism / experience while making it clear that while things come up during a transactions, the agent has seen it all and will handle it.

In other words, there won’t be surprises they can’t handle. Customers really don’t like surprises.

Again, that Holiday Inn thing

Yes, I’m referring to that “the best surprise is no surprise” thing.

Professionals seldom get surprised by normal things like the property issues I noted above. If they are surprised, they take steps to encounter them in time to deal with them and eliminate problems before a client can see them.

Usually.

During my visit, the agent was surprised by the number of easily-solvable problems that rental property had. That’s what provoked this discussion.  This isn’t just a real estate thing – my experience simply makes a good example.

No matter what you do, the most noticeable difference between the amateurs and best professionals in your field is how the pro prepares for and eliminates surprises, unknowns and trouble in general. How they insulate their customers. It’s what people rave about when they recommend you, or grumble about every time they think about the experience they had.

Which of those two discussions do you want to be the subject of?

No matter what

No matter what you do, take a few minutes each week to mull over what “being a professional” means to you, both as a provider of products and services as well as a consumer/client.

Ask your clients what could have made their last experience with you just a little bit better? What would have made it less annoying?

Finally, what can you take from other experiences you have? Tweak and use them on your own business.

Checkmate on the Fridge

My favorite story about setting expectations comes from a really smart real estate agent.

When you decide to buy or sell a house with her, she gives you a pre-printed list of all the things that can happen during the process of buying or selling.

A list of 20 or 30 things that could delay the sale or otherwise go wrong might seem like a bad thing to give to a customer, but it works for her.

She explains that the list contains the most common roadblocks encountered during a transaction and assures the customer that she knows how to handle all of them.

If and when they occur, she’ll call and say “Number 16 on your list just happened, and I’ll take care of it.”

Works for me

How does this work for her?

First off – it shows the buyer/seller that she is experienced and is prepared for the little things that come along and try to derail a transaction. By discussing them in advance, she sets expectations, establishes her expertise (again, by warning you about these things in advance and telling you she has your back) and leaves you far more confident about things.

If trouble occurs, the sheet (which also acts as a timeline) shows that she predicted that it could occur and handled it for you vs. the appearance that this could be a surprise.

Once the transaction is done, the list serves as a reminder of all the things that *could* have gone wrong but didn’t. The list also reminds you of the value she delivered by taking care of all those things.

She could have simply provided a generic FAQ list and made the client sign it (likely without reading it) and handle it like other agents handle these things.

Instead, she leverages it into an advantage that – among other things – demonstrates why the client should value her services.

Are your testimonials illegal? Will they be?

Even if you aren’t using REAL testimonials in your ads, you should be. I believe we’ve talked about that a few times.

If you are using testimonials (again, you should be – I can’t nag about that enough), then you might be interested in some changes that the FTC is considering. They’d like to keep a closer eye on what people say about the things and services you sell.

As the CPSIA situation might suggest (and I think I’ve made it more than a suggestion), you have to be more vigilant about keeping track of changes in laws and regulations that can impact your business.

To that end, I suggest you slide over to the FTC notice of their Federal Register request for comments about the use of endorsements and testimonials in advertising. Here’s the 86 page request for comments (pdf) from the FTC.

EIGHTY SIX PAGES? Yeesh. But you gotta do it, if nothing else to avoid another CPSIA-like experience. The PDF is on my reading list for the weekend. If I find anything ugly, I’ll be sure and make note of it here – HOWEVER, you need to check it over to see if your business is impacted.

Rather than get caught being less than vigilant as many were by the CPSIA, I suggest getting on top of this before it becomes law. The deadline for comments is January 30, 2009.

It appears that the changes are common sense, but I strongly suggest you check it out for yourself – one person’s common sense is another person’s “One lamp or two?

A quote from the FTC notice:

In the newly approved Federal Register notice, the FTCâ??s proposed revisions to the Guides address consumer endorsements, expert endorsements, endorsement by organizations, and disclosure of material connections between advertisers and endorsers (emphasis mine). On the issue of consumer endorsements, the proposed revisions state that testimonials that do not describe typical consumer experiences should be accompanied by clear and conspicuous disclosure of the results consumers can generally expect to achieve from the advertised product or program.

UPDATE: One of the reasons that we get these kneejerk reactions from Congress that hurt everyone is that there are still unethical vendors out there doing things that ought to get them slapped to the gutter. Things like this, for example. Thanks to Jeff for the heads up on this story.

Are your prospects giddy?

My apologies for not providing you with your expected Monday morning post, but I was a little distracted yesterday.

You see, at 4:49pm Mountain time, I became a grandfather for the first time.

And this morning, before she got another chance to divert my attention – and yes, she’s already quite good at that – I thought it might be worthwhile to make note of two markets that you might be ignoring.

Or maybe not ignoring, but not doing enough to pursue them.

Does your business have an affinity toward new parents or new grandparents?

If so, what are you doing to put yourself in front of them at the most critical times – before and just after the new arrival?

Photographers these days seem to have a handle on this for the most part. It’s hard to find a nursery/OB area in a hospital that doesn’t have free, large-format baby photos from a local photographer – with their contact info.

Some even offer the new parents a free first portrait by including a coupon in the gift basket provided by the hospital.

Some might even use the local public records, or at least the birth announcements in the paper, to know that it’s time to send something to get the attention of the new parents.

But what about financial planners (babies affect finances), tax planners (babies affect taxes), real estate agents (babies take up space – and so does their stroller, crib, and the litany of other gear), or cigar stores (why not a map for the grandfather to your store?)

Or maybe the front desk has a supply of coupons for a complimentary pair of cigars – regardless of the type, tobacco or bubble gum) with a coupon to get them into the store for a whole box – even if they are bubble gum. And of course, that coupon has a map and a phone number on it so the grandfather – often from out of town – will know exactly how to find you quickly so he doesn’t miss any more time with that new grandchild than he has to.

And what about car salespeople, pediatricians, dentists, churches, camera stores and day care centers?

If done carefully, and at the right time, each of these markets (and others) have an opportunity to intelligently market their services to the new parents – without overwhelming them with slimy pitches.

And then, there are the grandparents:)

Estate attorneys, financial planners, baby goods retailers, and many others may find themselves the recipients of unanticipated business from new grandparents.

What are you doing to attract those new grandparents rather than let that business happen due to blind luck?

Even coffee shops could provide a small sample of coffee for the hospital gift basket. Why coffee?

Because new parents don’t get much sleep, silly.

Put some thought into your message, keep it personal, but don’t be slimy.

It’s always nice to have new prospects who are thrilled to give you money because you’re in the right place at the right time.

And because they’re giddy:)

Small business + iPhone app = opportunity

Disclaimer: I simply have to admit that it’s unlikely that I would buy an iPhone until Apple decides to discard AT&T, or Steve Jobs’ gang adds a better cell carrier to the mix. I’m simply not willing to deal with those guys if I don’t have to.

And yes, I’d probably get over it if the right opportunity (or idea) came to me.

My AT&T issues aside, your business could benefit a great deal from taking advantage of the fact that there will be even more iPhone users out there – with what appears to be the best mobile application platform built to date.

Let’s talk about a few possibilities.

Let’s say you own a restaurant. Imagine if an iPhone owner, their spouse and another couple are driving around deciding where to go for dinner.

They call up an app called TonightsSpecial on their phone. Because the iPhone has a GPS in it, it knows where you are. It displays the current specials at restaurants within a 15 minute drive (or 5 or whatever the iPhone owner decides) of their current location.

It shows the wait time for seating (if you so choose), price range, cuisine, and how to get there from the iPhone’s current location – again, since your phone knows where you are and where the restaurant is.

And with a touch, it tells the restaurant to hold a table for 4 for seating 15 minutes from now, because you’ll be right over.

Or maybe you own a motel. And some poor, tired traveler has been driving all day to get to Mount Rushmore, the kids are tired, their spouse is after them to find a motel and everything is full because it just happens to be the first weekend in August – ie: the Sturgis motorcycle rally.

Except that this traveler’s iPhone has an app on it called EmptyRoom that tells them where all the empty hotel room inventory is within 30 miles of their current location. And since you registered your hotel with EmptyRoom’s service, it knows when you have a vacancy.

Instead of that family driving past Rapid City because every hotel they checked was full, they turn left just past the airbase and follow the directions on a phone to a room that cancelled 23 minutes earlier because a biker got held up by some rain (ok, ok, that wouldnt happen with a REAL biker, but I digress).

Rather than having a room-night go up in smoke, you just did 2 things: Rented a room for the night that was probably going to go to waste and 2, pulled a tired driver off the road and made their spouse and kids a lot happier and safer.

Or, you’re a Realtor. And you have built an iPhone app that automatically notifies a client on their phone when a home that matches their needs comes on the market.

You’re busy, out making a sale, or at a closing – yet your iPhone app is telling the client where the newly-listed home is, how to get there, what the price is, and if they tap a button in the app, it’ll make an appointment using the open times in your shared Google calendar (or me.com, or whatever) to tour the place.

And of course, it’ll only do that for people you have under contract, if that’s how you want it to work.

Or, you belong to a network of independent coffee shops. Starbucks is your arch enemy, other than the nice thing they did to sell everyone on how cool it is to buy $4 cups of coffee:) So when you join the independent coffee shop network, your shop appears on someone’s iPhone when they open that app.

Again, since a GPS is built-in, it can show me the closest independent coffee shops to the iPhone’s current location. This one can be cloned for just about any independent business. Bike retailers. Pizza shops. Dry cleaners, etc.

No matter what business you’re in – and especially with service, retail, restaurants and lodging, there are a pile of iPhone application possibilities here to make your business even more personal, to deliver even more value and to take advantage of an opportunity that most competitors wont even recognize.

Sure, all of this can be done now, from a web page, or the Yellow pages. You have a chance to bring it into their hand, without extra effort, so you can draw them specifically to your business – and that’s exactly what they want, otherwise they wouldnt be using that iPhone app in the first place.

Pre-sold buyers. Everyone likes them.

Locals grumble about real estate websites too

Several local people mentioned the real estate post from yesterday at last night’s CFHS Speech and Debate State Championship celebration.

People who had never said a word about the blog before. Surprised me a little. Avast mayteys, we’ve got lurkers!! 🙂

Anyhow, I got a lot of “No kidding” and “Why don’t they do this?” sort of comments out of it. I think I hit a nerve with a couple of em. They were downright grumpy about it.

Grumpy attacks
photo credit: Jere Dow

The “Why don’t they” comments were common-sense stuff.

Things like this:

  • Why can’t I search the available listings by school district?
  • Why can’t I search the available listings by subdivision?
  • Why can’t I get new business listings sent by text message to my phone?

I could go on, but you get the idea.

So…what about your web site?

Why don’t real estate agents take their websites seriously?

I’m working on an article for the Flathead Beacon (the local paper where my business column runs) about small business websites.

The article is actually the first a series that I’m doing, looking at niches one at a time. The first niche I’m covering is real estate agent / real estate broker websites in the local area.

Night Shot
photo credit: VisitMyLuxuryHome.com

I get the idea that a lot of these businesses really don’t take their website seriously. Given that we live in a resort area outside of Glacier National Park, you can’t just assume that because the locals don’t care (a mistaken assumption, I think) that your site doesn’t matter.

I looked 15-20 different real estate websites.

What I found

  • There are a few real estate service bureaus that tend to create most of the sites (yes, there are exceptions). You can tell because the sites of several real estate companies that compete with one another are being serviced by the same out of town web service. The layouts are the same except for color and a few graphics. The site structure is identical across several competitors. Where is the competitive advantage from using a template website that 12 other Realtors are using?
  • Most of the sites did not have curb appeal, something I would expect any real estate business to understand.
  • A few sites were exceptions, and the best looking sites were built by local web companies (how cool is that?)

All of these sites had a few critical things missing:

  • Almost no testimonials, and with one exception, the ones that did exist were weak, or years old (if they were dated). One notable exception that was fairly well done – Matthew Hohnberger’s – but even his testimonials could be improved (not the text, other things).
  • A lot of me, me, me – and not much focus on the prospective client.
  • No blog (one exception that didn’t motivate the reader to return, with no posts in almost 3 weeks)
  • No frequently asked questions. Help me buy. Help me sell. Establish your expertise before I make the call.
  • Almost no video. What video there was – came from their national organization. Homogenized corporate content that isn’t specific to Northwest Montana or even to your agency. If you’re an agent here in Montana, do you think I can drop an expert agent from Miami or Dallas here and have them know what to talk about? No. Any video is better than no video, but you need video of YOUR staff, talking about issues in THIS area.
  • No audio.
  • Very few photos – a few have photos but are monopolized by large unbroken paragraphs. Of the photos that were there, almost all were property or mountain view scenic shots. Only a few included a quality photo of the real estate agents. One included a photo of the sign on their building. Why is that interesting to someone looking to move to the Flathead, or buy/sell a home here?
  • No statement of specialties. “I specialize in finding homes for people with a heartbeat.” is not a specialty. I found a few that specialize in waterfront properties or property in certain areas, but none of them stepped out and said “This territory is mine and you are making a mistake if you work with someone else in my area of expertise.”
  • No commercial website for commercial buyers and sellers, vs. the residential site – other than the funnel site provided by the national organization. Commercial clients have different needs. Who is going to address them?
  • No city specific sites. Kalispell is not the same as Bigfork (or Whitefish, or Columbia Falls or Somers). The buyers and sellers are different, with different budgets and different needs. Why would they have the same site?
  • Very little establishment of personality on the part of the business, or the people working there.
  • No use of Web 2.0 / social media technologies. It isn’t just a buzzword.

Apple iPhone vs BlackBerry Curve 8300: Size Comparison
photo credit: Dan_H

The biggest reason for all of the above is the dependence on using whatever the national real estate company provides as a fill-in-the-blanks website. I found little or no investment in localized content or regional information except from the agencies that are not affiliated with national firms – and even those were missing most of the items above.

The problem with using the stuff that the national companies offer (much less with not using the items on the list above) is that the successful, smart agent can’t stand out from a crowd of starving, Tercel-driving agents who are working other jobs and selling only on the weekend. You don’t want me choosing a real estate agent out of a phone book. You want me to know, long before I sell a house, who I insist upon using and why.

If you are that agent selling only on the weekend, trying to make a name for yourself is the reason you should be doing these things.

Bridle - 660 E. Bridle Way, Gilbert AZ
photo credit: VisitMyLuxuryHome.com

I know, if you are currently doing well in the real estate business (and the smart ones do well regardless of the market), you have to be asking: Why is this important?

It’s important because you are leaving money on the table. You are not speaking to the younger crowd, nor to the web-savvy crowd who lives here (or elsewhere).

Right now, the field is wide open for the person or business that steps up. Even if you are making a good living in real estate, the websites I found are leaving money on the table.

It’s important because people who choose a real estate agent should be – if you do things right – choosing an agent for life. How many sales is that for you? How many sales is that for referred friends?

It’s not about the technology, it’s about the clients.

If you aren’t in the real estate business – you should be looking at your site through a very similar lens. Don’t discard the conversation just because you aren’t a Realtor.