We’ve had a lot of discussion in the GeekEstate community about Placester’s recent deal with NAR to provide IDX-fed websites to Realtors for $5/mo.
I asked Seth Price, VP of Marketing at Placester, to answer a few of your questions. We speak fairly frankly on this blog, so I tried to get to the meat of the critics’ concerns as quickly as possible.
$5/mo websites are attractive to agents, but many wonder if prices will go up later, advertising will be added, etc. There seems to be no profit margin in that pricing.
That’s a great question. The pricing is not temporary nor will we ever force display advertising (or any type of advertising) on anyone’s site. Building great technology on the web is about leveraging massive scale, we’ve seen this happen before with email, there was a time not too long ago that everyone paid for an email client, then Google came along and offered Gmail for free. We will never go back to paying exorbitant fees for email service again. The same has been coming down the pike for websites. We’ve seen it on the consumer and e-commerce side with Wix, Squarespace, Shopify & Weebly. No one has been able to do it in real estate until now, that part of our mission, to give every real estate professional the tools to effectively market themselves online.
Is there a critical mass of agent subscriptions that you need to reach for the model to turn a profit, or is it a loss leader with an alternate revenue stream?
Gone are the days of “if you build it, they will come”. You have to create massive value just for the right to engage with today’s consumers. That’s not lost on us. It’s also not unusual for companies to pour all of their potential profits into innovation and expansion. Amazon is a great example of this, for 20 years they’ve barely posted profits, they’ve spent a fortune on expansion and free shipping, and have completely transformed the way we buy things online.
Can you afford to provide support for agents’ websites at $5-$10/mo?
The short answer is yes. We do this by building technology that is really easy to use. If you’ve had an opportunity to try our website on-boarding process, you know that it’s now possible to launch a fully featured real estate website in 5 minutes. That reduces the handholding required to get your site up and running and reduces the number of customer support touches needed to maintain a website. The other piece is that we made a clear decision early on to become venture backed company, that provided us the resources to scale our team to support growth without sacrificing quality and service.
You seem to be aligning yourself not only with Realtors, but against advertising portals (referencing the portals “placing themselves between agents and their clients” quote). Is that the overall company philosophy, or does it only apply to the agent website products?
We believe that houses will always be bought and sold with the assistance of real estate professionals. We focus 100% of our efforts on creating tools that make the job of being a real estate professional easier and more effective. Our goal is not to be against the portals, it just so happens that they focus on trying to connect directly with buyers and sellers, then they monetize that connection with the highest bidder. We think about it differently, we want to empower agents and brokers to build relationships directly with consumers, in the markets that they serve. They shouldn’t have to pay a premium for the leads that they create with their hard work.
The hurdle for most agents is getting a website developed and online without much of a hassle. Agents will keep a monthly-fee service provider for years if it remains updated. Placester and Zillow websites seem to be focusing on simplifying that part of the process–what makes Placester’s process different or better?
I think the answer here is simple. We focus on one thing, building great website experiences for our customers. You will never see a placester.com as a destination site for real estate listings. We don’t compete with our customers. That gives us a great incentive to offer the best of what we do in the websites we create for professionals in this space.
Are there any plans to develop apps, or other related products aimed at Placester website customers in the future?
There are lots of plans but at the moment no apps in the near future. We are going to focus in adding features that help our customers drive traffic and effectively capture leads online. Essentially, we’re adding the best of what works and passing things that just take up space.
Seth is a nice guy, as well as being an excellent marketer, so of course he’s going to stay on message. I think there are some interesting nuggets here in terms of the company’s mindset, though.
Can a venture-backed website company operate with an Amazon mindset that profits are not a current concern, and if so, for how long? Will the positioning as an ideological opponent of portals build a more loyal base of users in the agent sphere or be a detriment to aligning with neutral agents? Will the bulk of agents be able to get their websites built without needing support? (Personal experience: I tested out the system and had a website running in just a couple of minutes, customized heavily within 10 minutes. It’s the easiest system I’ve ever used, including the online IDX agreement, but most agents are not GeekEstate agents.)
We know that a website won’t generate significant traffic without more work than just setting it up. The question isn’t necessarily whether these sites show huge lead conversion numbers, but is there still positive ROI for an agent at $60/yr even if they’re not driving traffic to the site? You could spend a lot of time/money customizing, blogging, and generating traffic/leads on this platform, but even if you didn’t, does it make sense as an “online business card” for the hundreds of thousands of agents who still don’t have websites? Will that be enough to make Placester successful? I’ll let you answer.