Why don’t more Realtors use the Internet more effectively to gain more clients, do more transactions and earn more money?
Are the majority of established Realtors just so fearful and stubbornly defiant that they won’t embrace Internet marketing even if resisting it could mean their demise?
I say the majority of Realtors because whenever I poke around various search portals to see how Internet listing presentations appear, most of them are pathetically weak. They contain one photo of the front of the home/condo, perhaps a few still photos of the interior, or not, bland descriptions of the property that are stylistic relics of MLS postings from the days when only Realtors could access the MLS. There is nothing to stir emotions and heighten the interest of potential buyers.
Would these resisters rather die (financially) than change? The standard answer is that people normally resist change and that generally speaking, the strength of their resistance increases with age and experience.
But is there more to it than that? Do these Realtors know something that the techie, product peddling, “solutions” savants haven’t figured out? Perhaps.
The Nash Equilibrium
In his new book, “The Mind Of The Market,” Michael Shermer writes:
“Technically speaking, staying with the old technology may sometimes be what is called a Nash equilibrium, a concept identified by the Nobel laureate mathematician John Nash (immortalized in the film A Beautiful Mind).”
“Applied to economics, markets reach a point of equilibrium where holding on to strategies is more profitable (or at least is perceived to be so) than switching strategies; thus, industries, corporations, businesses, and people reach a point of stability in which switching strategies appears undesirable.”
The application of this message for many Realtors is that their current strategies and actions regarding how they use or ignore the Internet may be due to their perception of having achieved market equilibrium. These Realtors believe that switching their strategies to embrace the Internet and to invest in building a strong, vibrant Internet presence/campaign would offer either no advantage or a disadvantage.
How did they form that belief?
To reach this equilibrium, Realtors must believe that: the right price is the driving factor in selling a home; adequate information about the listing is effectively disseminated through traditional channels, i.e. the MLS; buyer behavior is driven by a need to find a home at a price that represents good value; and buyers will endure whatever “theatrical” shortcomings exist in Internet presentations to find their homes.
Based on those beliefs, it follows that there would be no advantage in becoming champions of Internet marketing since all listed homes will sell with or without strong Internet marketing once the right price is established and disseminated through pre-Internet channels.
The disadvantage (to Realtors) would be making an investment of time and money on a new strategy that will not yield any return on investment and will take away time better spent on historic marketing practices.
The “proof” of this perception is the data showing that all houses eventually sell with or without an appealing Internet marketing campaign. When a house doesn’t sell for a given period of time, the seller, with input from the listing agent, simply lowers the price until the house sells. Therefore, the only significant variable in selling or not selling any given home must be its price.
If these same Realtors are getting their desired results or if their results are no worse than those they achieved before the new technology (the Internet) was introduced, they would conclude that the new technology has no effect on their outcomes and their incomes.
The perceived existence of this Nash equilibrium further strengthens peoples’ normal resistance to embracing and utilizing the Internet. So after at least 3 years of preaching and teaching and prodding by NAR and by many Real Estate companies, not to mention the many vendors who sell Internet tools and solutions, the rate of widespread adoption is somewhere between glacial and non-existent.
Solutions
The approach to helping Realtors change begins with developing a deeper understanding of why they are stuck.
The typical explanations that I hear from Brokers I’ve spoken to are inadequate. Answers such as, “Oh, people resist change. That’s normal. Eventually they’ll come around or they’ll retire and their younger replacements will embrace the Internet.” Or, “You know how it is, you can’t teach an old dog new tricks.” Or, “These Realtors are independent contractors. If they don’t want to change, I can’t force them. And as long as they’re paying their desk fees and expenses, that’s good enough.”
I suggest that Brokers and management executives begin to dialog with Realtors about what the Realtors who do not embrace the Internet see as the justification for maintaining the status quo. Don’t focus on overcoming their resistance. Instead, dwell on what those Realtors see as the advantages of remaining unchanged. Learn whether and to what extent there exists in your organization a Nash equilibrium and how widespread it is.
That knowledge will help you develop a better foundation for making widespread change effective, sustainable and profitable.
In our next posts, I will discuss other elements that influence resistance to change: consumer apathy and cognitive dissonance. And I will examine some approaches you can employ to strengthen your ability to lead and transform your culture.
From there we’ll move to an important reality of today’s market – the existence of two distinctly different consumer populations and how to effectively address them both.
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Thanks for commenting. I’d love to hear more about your approach to change management, particularly how you define, address and measure that initial five percent.