The 30 Elements of Value

Providing Value as a Real Estate Agent in the Information Age

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When it comes to providing value as a real estate agent in the Information Age real estate agents may not be well adjusted to the competition brought about by the internet.  Companies like Zillow and Realtor.com to name just two have leveled the playing field for many real estate agents.

Christine Ethridge, of LeadsandLeverage.com, states,

You Have To Give The Consumer Two Things

  1. You need to give them value…
  2. You need to give them what they are looking for.

We know what the consumer is looking for: a home to purchase or help in selling one. The obvious question then should be, “What is of value to the consumer?”

What is Value

Bain and Company, is a Boston, Massachusetts based management consultancy considered one of  “The Big 3 in the World”.  They have studied the meaning of value for consumers and found that it is based on what they term The 30 Elements of Value, published in The Harvard Business Review in an article entitled “The Elements of Value.”

 

 

 

Most readers will probably agree that quality and cost are two overriding concerns for consumers.  Think of it this way.

 

  • If two similar things cost the same and the quality of one item is better than the consumer will likely choose the one of better quality.
  • If two things are of the same quality, but one item is lower in price, then the consumer will likely choose the less expensive one.

One of the significant findings of the report is that some elements of value mean more to some people than to others and vary according to demographics and culture. For many consumers that do not have a reliable means of transportation finding a dwelling near ,or at least with easy access to, their employment or school, will usually far outway badge value of a home, conversely for a CEO of a Fortune 500 company badge value will probably be more of a value they seek in there home  than ease of access to work.

The research also found that more is better when it comes to providing value.  Companies that scored high on a least four of the elements of value, from at least 50% of the respondents to the survey had higher customer loyalty, measured by Net Promoter Score (NPS).  Three times higher than companies with only one high score and 20 times higher than companies that did not have any high scores.

Companies with four or more high on the elements also grew revenue at a faster pace.  Revenue for companies with four or more high scores grew revenue four times faster than companies with only one high score.

Online companies such as Zillow and Realtor.com do well at providing value to real estate consumers at the functional level. These companies help consumers reduce effort, avoid hassles, provide information, and connects consumers to agents.

What to do

What can a real estate agent do, you may ask, to compete against online companies?  I would suggest that there are some things that can be done.  If a consumer were to research my neighborhood, there is information online that they could undoubtedly find useful.  They could find demographic data, the types of restaurants, obtain quality reviews of the restaurants, find a list of annual events in my neighborhood, calculate commuting times to downtown, determine the best routes to travel to the suburbs, learn about cultural events, find daycare centers, and much more.  If you as a real estate agent you do some of this work for them, write it all down,  and give it to them, all that means is that you have provided the same value as an online service can.

If you can provide them with more intimate knowledge, then you will score higher in terms of value than online websites do.  For example, if a consumer has school-age children and asks about elementary schools, you, as a real estate agent, might say that Anytown Elementary school has an inclusion program that is being considered as a model for the whole city, that the Principal’s name is Ms. Tuesday and that if you would like to meet them, you could arrange it.   You might say that the school has a very active PTA that secured funding last year for a new playground and was instrumental in changing the school hours to an earlier opening, which studies have shown is beneficial to better attention spans in elementary aged school children.

Insights like these would show that you can provide more value than an online website.  Also, such comments would likely help to reduce any anxiety the consumer might have about your knowledge of the area, and you would be offering to provide them access that they would otherwise have to obtain on their own.

What real estate agents often do for marketing, and what experts argue they should not, is self-promotion. Look at websites for real estate agents, postcard mailers, or other materials, and you will likely see statistics about how many homes an agent has sold, how high above the asking price a home sold for, and similar data.  Pam Moor of Marketing Nutz in her podcast Top 10 Mistakes Killing Your Success asserts that self-promotion is a mistake and that knowing your audience and providing them with content that is of value to them is the better method for growing your business.

 

Niche marketing

By definition, a niche denotes or relates to product, services or interests that appeal to a small, specialized section of the population.  All too often real estate agents try to be all things to all people.  Many experienced professionals in real estate will tell you to find your niche or have it find you.  My original plan in real estate was to sell homes in the neighborhood in which I lived and help people buy homes in that same area.   As it turned out the competition was very high and entrenched in that market.  My niche, which found me, was assisting first time home buyers and in particular first time millennial home buyers.

Having worked with many clients in this niche, I now have a persona defined of who my “ideal” client is.  I know what their job is, their education, their marital status, whether or not they want children, and when they want children if they do want them.  I know how large of a home they want, whether they want a home in the suburbs or the city, whether or not they are looking for a condominium or a single family.  I can tell you about the style of architecture they like.  I know if they prefer to be near certain amenities like parks, grocery stores, and public transportation.  I know if they prefer to cook with gas or electric.  I can even tell you what they look like.

With this information, I can structure a website to provide content that is of value to the persona I have defined as my ideal client.  Don’t get me wrong the content appeals to lots of people.  The idea is that if I try to provide all the value I can to my ideal persona, there will be a great deal of information that is of value to 90% of first time home buyers, a little less for 80% or them, and so on.  As I said my niche is millennial first time home buyers, but I did work with and am still close, to a couple that became first time home buyers when they were in their 60’s.

By developing the persona of my ideal client, I know what question to concentrate during a buyer consultation.  I know what content to put on my website.  I know what content to blog about.  I know what questions they are likely to ask about a neighborhood, a house, or even a mortgage lender I might recommend.  I am betterer prepared to provide them value.  Unlike online websites, I do not have to be all things to all people.  I know what issues and problems they are likely to encounter in the buying process, and I can prepare for them ahead of time and advise them as appropriate.  In short, it makes me a better agent.

What Elements of Value to Provide

The elements of value that a real estate agent can provide are determined somewhat by circumstance and somewhat by their clientele.  When a client is looking to buy a mobile home heirloom value is probably not one of the elements of value that they are thinking about.  Most home buyers will not be thinking of sensory appeal when purchasing a home.  Not in the same way at least as a consumer in a restaurant when they are thinking about what to order.

There are some elements of value that you can always provide; self-transcendence is one example.  For many years a real estate company in my neighborhood advertised that they gave 10% of their corporate profits to local charities.  People knew that if they did business with them that they were also having a social impact.  The real estate company, by all accounts, did very well and was eventually was sold for a profit.

Through your experience, you should be able to reduce the anxiety of your clients.  You may even be able to provide a little fun and entertainment to them.  Jack Cotton, a well know author and realtor, “ specializes in the representation of discriminating buyers and sellers of premium properties in and around Cape Cod towns & villages.”  Often Mr. Cotton is called upon to show waterfront homes to clients.  His approach is to show these homes from his boat.  What could be more fun than that?  These are waterfront homes, often with docks, that are meant to be seen and enjoyed from the water.  When showing these home, Mr. Cotton meets and exceeds expectations by showing them from the place they are meant to be seen and in a manner in which they are meant to be seen.

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