Every week or two, on Facebook, Twitter or a blog comment, I see someone in the industry say something to the tune of…

  • The portals take our data, then sell leads back to us with the traffic they generate from it.
  • The portals were built on our backs.
  • Consumers go the portals and I am forced to answer their questions about incorrect and outdated information.

zillowtruliaFrankly, I’m a bit tired of hearing the arguments. So, I put up topic for a session at RE BarCamp NY, “how to combat the portals”, to discuss the topic in more depth. And I managed to rope Greg at DoorSteps into helping me moderate, given he has a bit of experience from both sides of the discussion.

The portals are here to stay, and the demand side of any marketplace is the insanely hard part of any equation. The portals have the buyers (who pay everyone else’s bills), so the sellers show up. Until the industry (agent, broker, franchise, MLS) CHANGE the game, and attract a massive number of buyers — they will be forced to play ball with the Zillow’s of the world.

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What came out in the session?

I was expecting a hostile crowd. But, actually, most agents seem to be quite happy with paying the Zillow’s of the world for leads. They convert at a high percentage, and the ROI makes sense. Do the leads cost you more than you generate in commissions from them? If yes, buy. If not, don’t buy.

If you don’t know the answer to the ROI, start tracking the sources of those that close religiously so that you do.

There were multiple Zillow Premiere Agent’s in the audience, and not one of them questioned the value they are getting for their money. (I did meet one person in the hallways who said Trulia outperforms Zillow in his area). They realize, their business is selling real estate; not doing internet marketing.

At the end of the day, this discussion is about cost of lead acquisition. Leads cost money, regardless of whether they are driven from internal or external efforts. If there is a way to decrease the cost of those leads by reaching buyers directly, brokers, franchises, and MLS’s in the industry will try it. It’s of course true, that any company is better off strategically if they aren’t reliant on one or two major partners; it’s always better to have a direct relationship with their customers/clients. Realty Alliance is trying to figure this out. See Greg’s post with the grand plan here, or Rob’s thoughts here. They won’t be the last to take a stab at it.

Will the industry take an Orbitz approach (6 largest airlines teaming together to take on Expedia, Travelocity, etc), with the largest franchises/brokers teaming together to build a new portal? If they do take that approach, here is the dream team to hire.

What should the industry do to weaken the strategic position the portals currently hold? What can they do?