Desperate times for brokers

Amid millions of searches but few purchases, brokers are being forced to tweak their business models. Some have turned lead generators for developers desperate for sales. A few, however, won’t stop at attacking others to keep them off the market!  

It was starting of this month (Truth Hurts) when we talked about how one of the biggest problems facing the real estate sector is the public’s perception of Realtors (read brokers). Tuesday morning, we saw another side of the profession. A mob of 50-odd agents and brokers stormed the Bangaluru HQs of NoBroker, a home rental startup. There were around 100 employees, including 30 women, when the group barged into the office, said Amit Agarwal, CEO, NoBroker.com. "We tried our best to pacify them but the group was aggressive. We finally had to call police," he said. They picketed the online house-hunting marketplace and shouted slogans, saying the company was ruining their livelihood. So that’s the stark reality. Business is in tatters and things are falling apart. The problem is there are way too many agents and brokers out there and many of them think that being an agent is an easy way to make some fast money. 

This unfortunately floods the real estate sector with people who are not very knowledgeable and passionate about their jobs. And with the amount of competition there will be many realtors who will play dirty. It's too easy to get into real estate business and way too many people think only about profit and lack the needed experience, right approach and a long time vision that you need in this business, not to mention good instincts and knowledge of human behaviour. Anyway, here’s hoping it was just a one-off incident. Talking of NoBroker, it’s a fact that the days when people would look for a broker on the street are gone. Online searches are increasing, especially in the metros and big cities, amid the slowdown. Buyers can learn a lot about a property before ever having to speak to a sales person. Buyers might be anywhere from 60% to 90% of the way through their buying adventure before even reaching the prospective vendor! So what’s the point for a broker’s sales teams to spend resources going through a list and cold calling? If you can generate leads for sales, the process is smoother and will yield more converted leads to revenue faster. Intelligent brokers realise they need to think out of the box to survive as houses are not selling and no commissions coming their way from the builders. They realize the buying process has changed and one needs to find new ways to be heard among the increasing noise. Instead of locating customers with mass marketing and email blasts, they are now focussing on being found and using lead generation marketing to build continuous relationships with buyers. Their vision is rooted in the idea that both the day-to-day jobs and the strategic role of marketing and sales professionals have been disrupted by repeated waves of change over the last decade or so: the Internet and World Wide Web; Google and search marketing; e-commerce; and more recently by social media and ubiquitous mobile computing. The builders also know that even the smartest of the underwriters cannot make the killing alone. They know it takes 6 - 12 months of "thinking" on a buyer’s part before getting serious. So the broker who focuses on a winning online lead generation strategy—starting with a guaranteed number of leads – is the flavor of the season. “In our experience, leads you pay for can lead to sales, but leads that you create on your own will be much more effective and generate more sales,” says a Noida developer. These brokers work on the premise that fewer leads can actually generate more revenue for your business. It sounds crazy, right? No. Flooding Sales with leads can actually make them less productive. A portion of the leads marketers generate is usually either not yet ready for a sale, or not a great fit for the product. And it takes time for your Sales team to sort through this junk in order to identify the gold nuggets a.k.a. potential sales. And when you increase the number of leads marketing generates for sales, you increase both the number of gold nuggets and the junk, and you can actually make Sales less productive, since it will take them more time to pinpoint the leads that are actually ripe for a sale. These are guaranteed number of leads… targeted leads that connect with you, not just impressions. “We are able to match buyers to homes much more quickly and without as much legwork as before. It is truly a simple, powerful solution to helping agents streamline the process for buyers," says a Gurgaon developer. These are MQLs or marketing qualified leads, or SALs (sales accepted leads). “We are working as a marketing team for the developer and since we only serve up the MQLs, the Sales spends less time searching for those MQLs in their typical process, thus closing more deals,” explains a broker. But all this costs money. It’s a transaction fee-based business, and to be successful, the broker has to attract buyers and sellers to his website by providing what they are looking for. Once a homebuyer is registered with the broker’s website along with the budget and location requirements, a team guides the prospective buyer on what to buy. This process includes site visits. “Most brokers who follow the brokerage model still consider face-to-face interaction with clients as the most important aspect of their business,” says a Noida broker. “The trust between the broker and the buyer has increased because of the information updates we provide on the website. The site also helps with documentation and closing the deal.” These brokers also help developers strengthen their brands, improve their marketing, and out-innovate competition. They will design, develop,  copywrite and help create brand and identity creation – all those agency things. But their work, at its core, is about turning on what’s unique, compelling, lovable or valuable in the developer’s company. “It’s not easy,” says the broker. “We need to discover the developer’s brand, his people, product, market and tell the world how his goals are unique. We need to understand him and literally discover him. We might have to design his site or make an app so that we get genuine traffic interested in buying his product.” It takes thought, time, energy and, yes, money to set up a lead generating and nurturing process.