It Isn’t About the House
Connect the Dots to Better Marketing Performance
By Charlie Calise
Zillow announced in early November of this year that they were getting out of the business of buying and selling homes, with the chief executive acknowledging that the division was proving to be unsuccessful and it would be impossible to scale. The division, Zillow Offers, was an iBuyer company, one that uses algorithms to make mass, “instant offer” home buying decisions.
This is not a story about Zillow, but rather the big question it raises in the minds of the average real estate investor, namely, “If a company like Zillow with its massive financial and technical resources cannot be successful in this business, how can I?”
The answer is simple: Real Estate is a relationship business…it isn’t just about the house (a transaction) but rather about the seller (a relationship). To demonstrate this point, HomeVestors®, the “We Buy Ugly Houses®” company, had a record year, achieving the highest gross revenue per house in the history of the company. They accomplished this feat by leveraging technology AND building relationships with their sellers.
Perspective
Over the last several years, the best ways for most organizations to market themselves have significantly changed. New tools, platforms and digital technologies are enabling a more insightful, holistic approach to marketing planning, better customer understanding and improved ways to convert new customers more efficiently.
However, rather than making things easier, this transformation has made marketing much more complex as the proliferation of technology has resulted in more media options and the atomization of touchpoints along the customer’s path to sale. What was once a fairly straightforward process from awareness to consideration to purchase, is now a constellation of countless directly and indirectly connected touchpoints that even the most seasoned marketing team can find difficult to harness.
Consider these facts:
» There are now hundreds of offline and online media channels available to reach customers. They can be reached in their homes through direct mail, traditional broadcast television or streaming OTT (over the top) platforms such as Netflix or HULU, or on the go through out-of-home media (billboards) and SMS text campaigns delivered to their smartphones or watches.
» Customers rely heavily on search to find what they are looking for and they search differently on their phone versus their desktop or laptop computer. The fact that Google changes its search algorithm (which determines placement in search rankings) almost daily makes managing search alone a daunting task.
» The ubiquity of social media platforms and review sites like Yelp have given rise to the voice of the customer. This has forced brands to be much more transparent, to constantly monitor what is being said about them online, and to engage with customers in real time to improve their experience with the company.
» To manage all of this activity, there are tens of thousands of tools and platforms designed to help marketers plan, execute and measure marketing performance—all generating more data than any organization knows what to do with.
To manage today’s marketing complexity, companies should look for ways to connect the dots of multiple customer touchpoints throughout the path to sale. This simplified approach allows for the delivery of the right message to the right customer at the right time on the right channel, all the way down to their device of choice.
Start with the customer
Any successful marketing program starts with the customer, or even better, a data-driven portrait of their demographic and behavioral characteristics.
There are hundreds of customer data points available from first-party (information you have about your customers), second-party (information other companies like Facebook and Google have about your customers) and third-party providers (aggregated information on your customers from sources like Experian, First American, and Equifax). When combined, you will have a quantitative, actionable profile of your sellers and their houses.
One of the best ways to collect, analyze and activate this disparate customer data is through a Customer Data Platform (CDP). CDPs are technology systems that create a unified customer database from many different data sources. The resulting structured customer profile data is then made available to other systems like CRM and marketing automation platforms for activation.
Another beneficial use of a CDP is to create “look-alike” audiences which are made up of people not doing business with you at the moment but share the same personal and household characteristics as your most valuable customers. A CDP ultimately serves as a catalyst for more effective and efficient marketing programs—from awareness all the way through to sale and endorsement (Google reviews).
Don’t Silo Your Marketing Approach
One issue many companies are dealing with is taking a siloed approach to marketing. For example, there may be one team (or agency) executing direct mail or television campaigns and another executing paid search or online display advertising. In some instances, these teams or agencies don’t always communicate well with each other resulting in a great deal of friction, inefficiency, and poor cross-organizational sharing and learning.
The better approach is to bring everyone together, all armed with data insights from platforms like a CDP. When one integrated team—subject matter experts, media planners, etc.,—has shared, real-time access to information about the seller and what’s working and what isn’t, they are able to make more meaningful cross-departmental connections and collaborate better, resulting in better marketing performance for the organization.
Refine your Media Mix
When evaluating media performance, while many customers may appear to convert online (for example, scheduling a service appointment on a website), their journey may begin offline where they were first reached by traditional media such as direct mail or television. The most effective marketing practices today should be able to track a customer’s behavior as they pinball between multiple offline and online media touchpoints, across different devices, on their journey from awareness to conversion.
Understanding these conversion, or attribution, paths and which media types play nicely together can help you get the most out of every media dollar spent.
Final Thoughts
While I barely scratched the surface of the science of effective marketing practices today, keep this in mind: Your best marketing programs are useless if you don’t understand your customer and put them at the center of your thinking.
When it comes to investors and real estate professionals, there is a tendency to chase the latest technology. While PropTech is certainly a game changer, the most successful value proposition is one that combines enabling technology with a deep understanding of the seller. Investors especially need to listen to the seller’s needs and motivations and ask, “How can I help?” This may explain the current predicament at Zillow. Algorithms are not great listeners.
