Reposted with permission from Rob Hahn. 

A couple months ago, I took a taxi for the first time in years. I was at an airport where the Uber pickup was a long walk away, while the taxi stand was right there at the curb where one exits the terminal. I figured, what the hell — the cab is right here.

As I got in, I noticed the cab had ads all over the side, rear and interior promoting an app. Apparently, I can hail a cab, pay my fare, rate my ride and view a map using this app. In short, it pretty much does everything the Uber app does.

I do not have this app on my phone; I still have the Uber app.

Why?

The cab smelled. I can’t identify precisely what the odor was, nor did I want to. But it wasn’t ylang ylang. The driver barely spoke English, and maybe he was a really nice guy, but he came off as surly and unfriendly. And there was no small bottle of water or phone charger cable in the back seat.

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The taxicab app might have been awesome. Its features might have kicked Uber’s ass and taken names. Maybe it had advanced artificial intelligence (AI) that predicted where I wanted to go without me having to tell the driver.

Maybe it would have educated me on important global topics while I rode. I’ll never know because I had such a terrible experience that the tech did not interest me in the least.

So here’s the question: Did the taxicab company build that app to enhance my experience or the driver’s?

Technology is a tool

I just spent a day in one of the best meetings I’ve had in years with a gentleman who is a real estate tech entrepreneur. He comes out of the consumer internet space from a company you have heard of.

One thing he mentioned was how in his previous company, every meeting pretty much began and ended with the same question: “What will the consumer experience be?”

Even in the most technology-driven meetings with engineers and product managers talking about data transport formats, the team (supposedly) never lost focus on the consumer. The greatest tech advancement in the world would not matter one bit if it did not improve the consumer’s experience.

Maybe they knew the limits of technology because they worked for a technology company. You can make the checkout process as easy, funny and delightful as can be, but if the order is wrong, gets delivered late or arrives damaged, the technology won’t matter to the consumer.

He wanted to bring that kind of focus to real estate technology.

Maybe because I spent a bunch of time and energy writing about Gary Keller recently (and had a rather large cohort of people deliberately misunderstand me and pile on me for being a “hater”), or maybe because of all kinds of opinion pieces “defending” Gary Keller, I immediately thought of that whole line of reasoning from one of the visionary leaders of the industry.

Tech-enabled agents vs. agent-enabled tech: entirely missing the goddamn point

I have said on the record that Gary Keller has identified the problem as the struggle between tech-enabled agents versus agent-enabled tech. I took issue with the solution he proposed: he became a technology company some 10 years too late and a few billion dollars short, but the core challenge of remaining tech-enabled agents instead of transforming to agent-enabled tech remains valid.

Thing is, because I’ve been thinking long and hard about the iBuyer space (coming soon to a Red Dot Report near you!), I realized that we are all missing the point.

The point is not the relationship between tech and the agent, but rather the consumer experience during the real estate transaction. And if we’re being honest about it for a minute, we’d admit that the experience sucks donkey balls. No one who has ever bought or sold a home has thought, “Boy, that was just awesome! I can’t wait to do it again!”

Some of the suckitude is because of the real estate industry. It sucks when your listing agent won’t return your three phone calls asking for an update. It feels bad if you feel your buyer’s agent is pushing you to choose a house because he or she wants needs a commission check. And the industry is responsible for that suckage.

Most of the suckitude, however, is because of the dysfunctional, co-dependent relationship between big government and big finance. Your lender wants to probe Uranus with a high-powered radio telescope, financially speaking. That sucks, but the industry isn’t responsible for that.

It’s painful when the local, state and federal governments want you to sign 200 pages of legalese in triplicate. None of those things are the industry’s responsibility, but we should at least acknowledge and understand the pain and think about how we might decrease the suck.

As the KWRI response shows, however, the focus is on the agent’s experience, business and commission, rather than on the consumer’s experience.

Take a look at the transcript from the Gary Keller and Brad Inman showdown:

Brad Inman: Here we got a question. At what point do you care about the consumer experience versus the agent’s? Gary Keller: Well — Brad Inman: Or do you leave that to the agent? Gary Keller: Well, no, I care about the agent. I care about the agent’s consumer experience. Brad Inman: And do you feel like your technology’s enabling the agent to create a better consumer experience, or do you actually — Gary Keller: Yeah, that’s the whole point.

No, that’s not the whole point — not any more than the taxicab app’s whole point is to improve my experience. The whole point is to fight off Uber (whose whole point is to create a better consumer experience). It did not occur to the taxi company that perhaps it needs to look at the totality of the consumer experience; it just threw out an app because Uber is an app. But it is not.

Similarly, if brokers started ruthlessly firing every single agent who provides a bad consumer service experience, the whole point of that would be to create a better consumer experience.

If real estate people started obsessing about what’s broken, what’s less than optimal, what’s problematic in the overall consumer experience with buying or selling a house, maybe they can arrive at something that will create a better consumer experience.

If you start from the premise of the agent’s experience because “the agent is my customer,” then you’re screwed.

Limits of technology

When technology is built for brokers and agents, it’s the taxicab company building an app to help taxi drivers get more fares. Technology can be magical, but it can’t work miracles. There are real limits to technology. The taxicab app can’t clean the cab. It can’t make drivers be friendly.

No app can make agents give a shit about the consumer. The best customer relationship management (CRM) system in the world isn’t going to make an agent ethical. No AI can replace a listing agent having coffee with you to give you an update on what’s going on. Protect your data all you want, but how does that affect the client whose house didn’t appraise?

In theory, the one thing data and AI can do is help agents do the right thing more efficiently. Agents who don’t know a market and are too lazy or incompetent to do a thorough market analysis can use an AI system connected to big data to produce a far better pricing report.

But if an agent can push a button to produce the magic report, so can the consumer. Paying 3 percent to someone to push a button seems like a rather extravagant expense to me, but hey, see how that works out for consumer experience.

Here are a few things no consumer anywhere has ever said:

“You know, I really hate talking to my agent — if you could provide me an AI that I could talk to instead, that’d be great.” “My agent likes to call me to discuss new homes that have come on the market that might meet my needs, but what I really want is an automated impersonal email from a computer system. Can you make that happen please?” “The thing I hate most about selling a house is all the data I can get on the internet at my fingertips. Knowing what homes near me are listed or sold for is a total drag. Is there some way you can force me to contact an agent who will put me on an AI-powered marketing system instead?”

Keller is correct that agent-enabled tech companies use agents because they have to. But that’s in part because those companies are obsessed with the totality of the consumer experience. If an agent helps provide great service and improves the overall experience, they’ll use agents. If removing the agent would provide a better totality of consumer experience, you bet your ass they’ll remove the agent — just like Uber would remove the driver if that would lead to a better overall consumer experience.

Tech companies like Zillow, Redfin, Opendoor and others continue to have agents in the loop, which means they recognize the limits of technology. The real estate transaction is complicated, expensive and stressful, and these companies recognize that having the right agent in the mix improves the totality of the consumer experience.

Just like advanced AI technology, data mining out the ass and big and bigger data, the agent is a tool through which these companies try to improve the overall consumer experience. If providing a pink bunny with every purchase would improve the overall consumer experience without making them go bankrupt, I’m convinced that the tech companies would find a way to do just that.

Shouldn’t brokerages, real estate companies and agents learn something from that example?

The lion over the hill is always and forever the consumer

We in the real estate industry are so concerned with the next threat, the next lion coming over the hill. It’s Microsoft! No, it’s Google! Wait, it’s Zillow! Oh, today it’s Redfin and Opendoor. It’s those nasty discounters!

It’s as if we’ve all forgotten that the lion over the hill has always been (and will forever be) the consumer. Once in a while, that lion has to roar to remind us jackals who’s who.

Those in the recording industry thought it was the lion against the MP3 jackal, but the consumer reminded them who’s who; the hotels thought they were the lion, and they had awesome technology to compete against Airbnb, but the consumer reminded them what’s what; Microsoft itself thought it was the lion, with its control over the operating system and software, and needed to put the jackals of dot-com companies in their places, but the consumer roared.

When Amazon, Google and Facebook (or whoever else) get complacent and forget their place, the lion over the hill will remind them of the laws of the marketplace jungle.

It’s inspirational to some that Gary Keller is “standing with the agents” and protecting them from the jackals of agent-enabled tech companies. I understand. I sympathize. But, again, the whole affair is missing the point. In the linked article above, Adam Hergenrother wrote:

Gary Keller has put his agent partners first by building a platform that will allow each individual agent to be their own Netflix in their individual markets.

As we move into this next phase of the real estate industry (get ready, it’s coming!), agents get to choose the partners they’ll bet their careers on. I choose KW because it has proven time and time again that it deeply cares more about me and my business.

Netflix itself doesn’t care about the Netflix software, except to the extent that it provides a better consumer experience. Netflix was mailing out DVDs long before it built any software because that was a better experience than driving down to Blockbuster.

Netflix built software because streaming is a better consumer experience than messing around with DVDs. I’m sure it regretted having to lay off hundreds of mailroom workers, but the whole point of Netflix was not to provide rewarding careers for DVD shipping workers.

If Netflix could provide a better consumer experience profitably putting on live puppet shows in your living room, Netflix would figure out a way to do just that and ditch its software tomorrow (or else Netflix too would go the way of buggy whip manufacturers).

What’s next?

The next phase of the real estate industry turns out to be the same phase it was yesterday: delivering consumer experience. Is technology a key component of that? Of course it is. Technology is not the end, but the means to an end.

The question is: “What is the end goal?”

Adam Hergenrother, Gary Keller and most of the real estate industry appear to believe that the end goal is the agent’s paycheck and career. KW of course; but NAR is now the National Association for Realtors, and so many multiple listing services (MLSs) have “Help our members be successful!” in their mission statement.

These days, even Zillow is all about keeping the agent at the center of the transaction.

It might do all of us a ton of good to recognize that the end goal is not the careers of real estate agents.

The end goal is to deliver the best overall consumer experience possible at the highest profit margins possible.

Everything — technology, data and the paychecks and careers of taxicab drivers real estate agents — is a tool to deliver that exceptional consumer experience.

Who should tech love more — the agent or the consumer?

Robert Hahn is the Managing Partner of 7DS Associates, a marketing, technology and strategy consultancy focusing on the real estate industry. Check out his personal blog, The Notorious R.O.B. or find him on Twitter: @robhahn.

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