Note: The contents here reflect purely my own opinions, and not necessarily those of any other person or company.
We founded Contactually as a generic relationship marketing platform, suitable for any professional who can directly tie their professional/career success to their ability to build and maintain relationships. After first targeting generic early adopters (the “TechCrunch” audience), we looked to focus on a particular niche if we were to move from early adopters to early majority (thanks largely to Geoffrey Moore). While the product remained largely industry-agnostic (and still serves professionals in dozens of different industries), we concentrated our commercial efforts on residential real estate – growing to become one of the best CRMs for real estate agents.
The industry-agnostic challenge for a startup to reach product-market fit and scale commercially is already a big hill to climb – battling the negative sentiment around the real estate agent doesn’t make it any easier. We continually encountered vendors, investors, and, in some periods of our growth, members of own team, who were overly dismissive of serving agents and brokers. Let me not fool you in to thinking that there are some serious structural hurdles to overcome, but given the incredible opportunity and honor we’ve had in serving this market, I’d rather be constructive in the hopes of helping others.
I’ve since mentored numerous entrepreneurs and investors who desire to serve the residential real estate market. In the hopes of helping a greater audience, I’ve documented as much as I can here.
While what is in here is focused on this industry, I’m sure you can take insights here and find they apply to others as well.
It’s All About Relationships
This isn’t just because I’m the co-creator of a relationship-centric CRM and author of a book about relationship marketing. Real estate is a relationship-oriented business – between agents and homebuyers/sellers, between brokers and agents, between an MLS and its’ constituency, and definitely with vendors and the entire ecosystem. The extent to which people go from competitors to collaborators and back, the changing of flags and affiliations, all the while remaining friends and hugging each other in hallways, is unmatched. Social connection – and social proof – is one of the most important assets you can build up. You’ll see this thread throughout. Maybe buy a book about it.
This was most apparent to me when our acquisition was announced. Given Compass’ stature in the industry, there was some concern about the new partnership, and I fielded many calls and emails in the first 48 hours to address their concerns, knowing what questions were likely to come up well in advance. What I was not prepared for was how many people prefaced the discussion with how happy they were for me. Humbling.
Identity vs Outcome
If I were to tell you that using a particular tool would result in a 42% increase in your bottom line, I would be following the outcome model. If, instead, I were to share the people in your office or market were using that tool, that would be the identity model. Real estate is heavily rooted in “follow the leader” – at all levels. Understanding the persona of agents and brokers, the identity model of marketing is what we’ve seen to be the most effective. Calculating ROI was largely done downstream as confirmation of existing customer relationships. Because real estate is highly competitive, targeting the best agents in an office or region, the top brokerages, the top teams, is your best entry point into the market. We reached the point where we had enough leading brokerages that we often were asked to skip the demo or any due diligence, and just talk pricing and logistics. This is a vast deviation from other enterprise markets. This also applies post-sale as well: showing how other agents are already benefitting from your solution can help drive adoption.
Brands Are Religion
It is commonplace for agents and agent teams – with the occasional entire brokerage – changing brand affiliations. One could thus derive confidence in delivering one message to the market, especially when it comes to social proof (see Identity vs Outcome). In our experience, messaging needs to be completely brand-agnostic – or tailored to each brands. For example, sharing how many Keller Williams franchises you support will likely not help your case when talking to independent brokerages. Our marketing messaging – testimonials, case studies, etc – were swapped out to be brand specific. When we spoke to Sotheby’s International Realty affiliates, we only showed the logos of other affiliates. When we attended Leading Real Estate Companies of the World conferences, only independent brokerages were on display.
Your Best Way In: The Agent
I still consider that one of the most beneficial cultural contributor to our growth was our core value of focusing on the user. Being agent centric helped us build a product that agents used/loved. Because agents used it, teams would too. Because agents loved it, brokerages would speed through pilots, to get this in the hands of more agents. Other enterprise software markets can rest their laurels on being a solution provider to the decision makers and C-suite in a company, who can mandate usage (I don’t think anyone working at Concur has ever met an end user who’s had to file an expense report). In real estate, regardless of whether the one paying the bill is an agent, team lead, broker, or other entity – if your success relies on an agent actually using the software, treat them as a first class citizen.
Understand The Differing Personas And Their Needs
Walking through a vendor showcase, one might be fooled into thinking that the only thing that matters is “more money, more listings, more leads.” Yes, and…? Is that it? No. Just as there is not one persona pervasive throughout all roles and levels in the industry, it’s foolish to think that there is one common motivation. This may seem obvious to most, but understanding deeply who you are looking to sell to, and serve, will go a long way. When we started moving upmarket, we felt secure in our messaging tying usage to increased agent production and, thus, more revenue. We were frustrated by how that message never connected with prospects. It took time, and good research, to learn that brokerage leaders were much more focused on increasing agent retention and recruiting; having a strong toolset was key for that.
Conferences Are The Big Show
Since building and maintaining relationships are so central to successful execution here, conferences are a keystone. Be there – at as many of them as possible. We were present at nearly every one of them where our target personas were in attendance, and were always testing new shows. The big national shows, the small invite-only leadership retreats, the brand get-togethers, the regional seminars, etc. We tested all of them, and found the mix that worked well for us. In some cases it’s acceptable to send a sales team (and a Delorean), but more often than not, executives and senior leadership should be present – because your customers and partners are doing the same. Yes, my heart sank too when I walked off the jetway in Vegas for the fourth time in a year. But we saw the results.
As for strategy at the conference – the best relationships are not built sitting at your booth or in a session. While the content is generally useful, and getting a sponsorship that comes with a booth is often a good investment, your best ROI will come from going out there and building relationships (for heaven’s sake, even if you are going to be at your booth all day, be standing in front of it, not in it!). I recall one time at an Inman Connect in New York I logged 60 1:1 meetings in a five day period – most of them arranged prior to the show. My first meeting with one of our biggest customers was meeting for a drink by the Lake of Dreams at the Wynn – at midnight. Again, experiment to see what works for you, whether it’s lobbycon, getting a booth, private meeting suite, co-hosting a party, hosting a dinner, hanging gift bags on every hotel door – we did it all.
Be Aware of Seasonality
This is more for planning and expectation setting for you and your team than for anything else. While many other industries see user, customer, and prospect engagement wax and wane over the year, the peak-to-peak amplitude is exceptional. In most markets, the intense periods for an agent are roughly February through June, and September through November. At the same time, usage was so low we could probably have shut down our servers Christmas week. You’ll learn to ride the waves, but especially if you are setting expectations with investors, planning ad spend, or comping salespeople, you are best heeding the seasonality.
I’m sure there is more I’m forgetting at this point (and some things I am intentionally omitting for now), but if you have particular questions where our years of insights can help accelerate your learning, please don’t hesitate to reach out.