The Service Value Crisis

Understanding Whom We Serve and Closing the Price/Value Gap

Practicing Real Estate by Convenience.

The service delivery process surrounding the real estate transaction does not offer the consumer a consistent, reliable, predictable service outcome and provides low level professional accountability. This is in marked contrast to other high fee professional services e.g. accounting, architecture, law and medicine. Real estate practitioners (800,000 + of them) individually determine what, when, how and if something is to be done related to service. The real estate industry may be the last on earth where practitioners rather than consumers define and drive service. Individual practitioners may and do provide a very different service process from day to day and even from morning to afternoon. An external event affecting the emotions, psyche or physiology of the service provider may be a determining influence in what is done, how it is done or if something is done at all. Sadly, such a service delivery system could be described as biorhythmic. Consumers experience a service that is processless. The outcome is closer to a random event or miracle rather than a managed process.

Customer Demand Raises the Bar.

Consumers increasingly recognize this absence of a standard of practice. They are becoming adept at accessing housing information in the 24X7 dimension (24 hours a day, 7 days a week). This awareness is improving judgement in the selection of service providers which raises the level of competition and service accountability. Service providers who simply choose to ignore this shift are increasingly at risk.

Consumers Increasingly Seek Value Through Price.

In any product or service, value is the relationship between quality or qualities of that product or service and its price. Consumers will always seek to maximize value and in an industry like ours where differentiation is unclear, that pursuit is increasingly focusing on price. In our industry quality is just a word.and too often just talk. For the consumer, price becomes more measurable, more meaningful, and more certain. Consumers have, in real estate services, come to have more confidence and certainty in chasing price as the pathway to value than the vagaries of quality. The result of this pursuit is of course the continuing erosion of fees as a percentage of sales price. For many practitioners, aggressive pricing (discounting) is a dominant or primary strategy for competitive advantage and market share.

Maximizing Value by Providing Quality Service.

Can a strategy focusing on quality rather than pricing have a hope of success in today's business environment? In a world, where for many, time is a more scarce resource than money there are numerous examples to support such a premise. But such a strategy requires that quality be more than a word and more than a promise. Service quality from professional services providers must be measurable, meaningful, substantive and definable. Quality professional service must offer consistency, reliability, predictability and accountability.a defined process.a managed outcome rather than a chance event.

Value Through Quality-Beyond the Standard.

Customers recognize that the current system is not right. Brokers and owners can see that measurably better service quality will reap the benefits of customer loyalty, repeat business and referrals, improved risk management and lower operating costs. Sales professionals, under constant pricing pressure from both competitors and consumers, are looking for leadership to provide a vision and a practical plan.