Repositioning the HomeGain image
Before Web 2.0 took off less than two years ago, the only online products for real estate agents were lead generation plays - premium ad placement models like Realtor.com and lead buys from lead gen sources. Lead generation companies generally have tarnished reputations with real estate agents because the leads they sell have already been blanket labeled as "unworkable". From a marketing perspective, one needs to understand the psychological reasons why purchased leads have been damned:
- Lead generation is a tough product to
sell. Many lead gen companies (not Homegain according to Louis) sold
product under 6-12 month contract to lock in clients. The sales process
generally uses a telemarketing force, which hints to a poorer sales
experience. The lock in period irritates agents as ruthless.
-
Purchased leads require cold calling to unsuspecting potential
customers. It's not a task to look forward to... it's the last thing
I'd want to do.
-
Purchased leads' close rates are low (Louis mentions single digit %)
compared to a lead generated by other means, like a network referral or
a face to face meeting at an open house. Right off the bat, the
purchased lead is considered inferior.
- Many real estate agents, procrastinating in following up on a lower priority cold call lead, get to the lead too late. The natural blame ethic kicks in - the lead is deemed faulty, not the agent or their response time.
This goes to the heart of HomeGain's positioning challenge. Although Louis has stated that their products have veered away from straight lead sales, it's still branded with a "Web 1.0" business model, and lumped in with other lead gen companies. Although Louis states that Zillow has been copying HomeGain, Zillow is still considered the 2.0 pioneer because its cachet is newer than HomeGain's. The takeaway is Louis should be commended for actively rearticulating what HomeGain is through the HomeGain blog and how he's repositioning the company's services towards more relevancy to connecting agents with consumers. The blog and the discussion around HomeGain will create a lot more receptivity for its upcoming new products (stay tuned...) than if the new services were introduced the Web 1.0 way ... in a vacuum with a handicapped reputation.
Sideline: I originally wrote this article with the intention of publishing it on the HomeGain blog, and showed it to Louis via Google Docs. Louis convinced me it would work better on Transparent...
Pat
Thanks for an objective view on how those outside HomeGain view our company.
Its true that, until recently, HomeGain has not spent an inordinate amount of time focusing on its external image.
We have been focusing on working with our customers and improving our services and products.
Indeed, since we started surveying our customer base quarterly last summer we have shown great improvement.
Our the latest survey taken at the end of the first quarter 2008, showed that nearly 70% of our customers responding said that they are fairly satisified and nearly 40% gave us near perfect scores.
Last summer the results were closer to 55% and 30%, respectively.
We will have additional features launched in the coming two months that we expect to further delight our customers. (some of them "web 2.0" features that should please the RE.Net crowd too)
So as we make gains with our current customer base,we think its time to broaden our reach and let the rest of you in on the productive marketing tools and services that we provide.
And yes, we will be making greater use of Max going forward.
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I have spent the past 5 years developing my Internet program which as become very successful with all my Agents earning a good living and small office becoming the number one office in our county in working with buyers. Not bad out of 500 offices.
The key to good Internet success is finding the right Agents that understand that sales is a numbers game. Without any type of solid lead generation and conversion system, Internet leads are considered terrible. However, it's not the lead that's terrible, it's the Agent or Broker that doesn't or hasn't spent the time and effort to learn how to make them profitable. As I mentioned, in the worst Real Estate market our county has seen in 25 years, we are growing and doing well...and all our leads come from the Internet.
So how do you to this? I figured it out through trial and error. Of course owning an Internet Company for several years prior to Real Estate didn't hurt. I have tried almost every lead generation company out there and you are right, most of them are terrible and sell recycled leads. Then their is Homegain. I can really only speak of the Buyer Link program as that is what I use. I prefer to generate my own leads because I think they are easier to convert. I can tell you facts that can't be disputed. I have always bought my own traffic through Google and Yahoo and averaged a 7% conversion rate from clicks to leads. Once I tried Homegain, I immediately rose to a 15%+ conversion rate. Along with a higher conversion rate, there are a couple of other great advantages. First, I don't have to spend the 2 hours per day that I did managing my 500 keywords. Second, it's about half the cost of my bidding cost on Google and Yahoo to use Homegain. I don't know about you but this all equates to twice as many leads for half the money. It's a no brainer to me.
We have grown from 6 Agents to 23 Agents since we started using Homegain and the service and staff has been excellent. I have not received the lead quality or customer service from any other company out there. If there was another company, I would be buying their traffic too.
Keep in mind that Internet leads are only as good as the Agents who work them and the Agents that have built great systems to use them. Our little tiny Real Estate showed 140 different buyers last month. This does not happen without our Internet program. I am always glad to talk to Agents and Brokers about their Internet program and introduce them to my 100MPH Marketing program. I owe all my success to the systems I have built. If you need any advice, don't hesitate to contact me at [email protected].
As for Louis and Homegain, they will always get my vote as the best Real Estate related lead generation and traffic site available.
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I've recently had the privilege of getting to know Louis and through him, Homegain. From what I can tell, Louis is incorporating web 2.0 into an already functioning web 1.0 model. I have more to learn about the Homegain model, but I see it as a vertical model that's useful for new and old agents alike. The more we learn about lead management and conversion the greater the position for a company like Homegain to be useful to agents. I believe the consumers are getting better, too, learning the routes to service providers, so that agents, prospects and companies like Homegain are learning to effectively utilize the "new way" and make it easier on everyone.
Louis seems up to the challenge to brand Homegain and present a solid image of a no-nonsense business model open to web 2.0 ideas that work.
I take my hat off to him and to Max.
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It will be interesting to see the new
"Web 2.0" features that HomeGain is slated to release. My money says that the features are more Web 1.5 than 2.0. The latter is something that you need to bake into the model. You can't just bolt 2.0 onto your website, feature by feature, like an upgrade kit for your 87' Chevy Camaro, and expect to change industry opinion and reap the real rewards associated with social network applications, blogging, communities and collaboration. Its tougher to reinvent the HomeGain wheel than it is to engineer it from scratch, like Zillow, especially while its moving at 65 miles per hour.
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"The same psychology comes into play - vendors are lumped into a group of predators extracting money from real estate agents who have experienced disappointing results."
Exactly. But let's go one step further. Let's assign the blame not only on the vendors but also on the aggravating and nagging reality that uninformed agents, like mice, grab for cheese unaware of the trap. It's that tendency to gravitate towards anything that sounds like the fast track to success that creates the biggest problems.
This, more than anything, is not only thankfully destroying the lead gen vendor business, but has unfortunately destroyed the reputation of real estate.
But we cannot cast Homegain in the same cement of 1.0 lead gen vendor discussion. Homegain was, is and will always be a solution to a consumer problem and therefore a very precise solution to a Realtor problem.
I speak on this from several vantage points. As a consultant for Inman News when Homegain launched, I was extensively briefed on the model and have understood its intrinsic benefits from the onset.
I am also a customer of Homegain and quite satisfied as a result. I also have a core expertise on brand positioning and therefore view Homegain with slightly different eye.
Homegain was, is and will continue to be an industry leader due to one key factor few in real estate possess - a sound business model. Coupled with its ability to delivers on it's promise, it's arguably meaningless what numerical nomenclature we assign to them.
Business is business. Making money and earning profit is far more important today than deciding which side of the social template they are on.
While Zillow is indeed a dazzling example of Web 2.0 branding, it is also an awesome destination to squat on if you were destitute. If there were such a thing as virtual homeless, they would fare well setting up a cardboard shelter over the metal grates of Zillow's expense train.
But Homegain - not only have they served as the inspiration for what Zillow and others brand around and give away for free, Homegain, earns profit.
I think this is the shinny beacon of a story here, Not their positioning challenge. I think they are positioned brilliantly especially in the wake how hardly anyone in real estate, online or offline earns profit. Whatever Homegain is doing - it's not only right, it should be modeled.
And then there is Max. There is much here to write about and comment on regarding the brilliance of this campaign.
Anyway, great post Pat. The same psychology comes into play - vendors are lumped into a group of predators extracting money from real estate agents who have experienced disappointing results.
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Jonathan you make a fair point regarding web 1.5 vs 2.0
In our most recent press release we indicated as such:
"These new features signal a move away from an emphasis on form leads and a step towards providing our Source4Sellers agents with a total HomeGain Marketing Solution that allows them to connect with consumers in any manner the consumer chooses"
The upcoming second feature in planned triology should score even higher on the Innovation_O-Meter.
http://blog.homegain.com/homegain-invents-agent-profiles
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Marc
You make an important point regarding the irrelevance of whether the model is 1.0 or 2.0
Back in June 2007 Pat and I engaged. I wrote:
"Web 1.0 companies, like HomeGain and "bricks and mortar" franchises like ReMAX, will add web 2.0 features when and as it pays to do so. Adding heat maps, HVAL tools, blogs, user generated content is not all that difficult. The trick is making those features pay."
Now is the time to roll some of them out- not because they are Web 2.0 rather because they will provide value to our consumers and our agent customers.
AND there will BE NO ADS.
https://transparentre.com/2008/02/21/why-im-writing-on-the-homegain-blog.aspx
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I do like reading these things but as an active Broker using the Internet to generate continuous business, I don't think all the web 2.0 tools I keep hearing about are really going to have a huge impact on my business. I am very open to these tools and would implement anything I believe would give my customers a better experience, but from what I have learned over the past 5 years of Real Estate Internet Marketing is if I give away to much information without building a solid personal relationship with our Internet customers, then my soon to be customers don't feel any need to comunicate with me by phone or email. I have found that when I have limited the amount of information, these same people contact me on a regular basis. What I would like to know from all of you, is how you anticipate this will, in a positive way, affect my business. In the end, as much as I want to give my customer a solid Internet experience, it still comes down to capturing leads and turning them into customers. I haven't seen anything to date that is going to "change" the way I do business. I'm all ears. Please enlighten me. Thanks!
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Mitch
The tools, whether 1.0 or 2.0 no matter how good, are only effective in the hands of a Realtor who knows how to make use of them.
There is no substitute for connecting directly face to face with customers if you want to close deals.
Marketing is only the first step.
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Well, the HomeGain admirers showed up in full force... it's an indication that HomeGain does indeed differentiate itself from the pack. The problem with the lead gen brand names is simply their similarity - HouseValues (the company with the 6 to 12-month lead lock in policy) and HomeGain are interchangeable to the masses of the real estate community. Here's to Louis' Fan Club...
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Pat
You are correct to the real estate agents that are not Homegain customers, HomeGain gets tagged with a negative association as it gets lumped into the rest of the lead generation companies.
But to the thousands of paying HomeGain customers,many of whom have been with us over four years, they know the difference.
For example:
http://blog.homegain.com/building-pipeline-with-homegain-buyerlink
http://blog.homegain.com/why-have-clicks-managed
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I will admit I am a big fan of Homegain and Louis is a great guy. He stands strongly behind his product and he has a right to. I've tried them all...and I do mean all, and the only one that I would let my kids use would be Homegain. Ok, my kids don't really want anything to do with my real estate company! Louis and Homegain are their for their customers (agents) during the good but more importantly during the bad. Recently I had a lead conversion problem and Louis spent over an hour with me one night brainstorming what could possibly be wrong. In the end, most of the "lead generation" or traffic companies are scams that sell crap. Believe me, Homegain had to prove itself to me before they had me as a loyal and very successful user. Again, I can only speak for BuyerLink as that is what I use and use effectively. In fact, I spend 90% of my ad budget with Homegain because they always deliver better and less expensive traffic.
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Pat
Intelligent real estate bloggers like Joe Ferrara at Sellsius also appreciate HomeGain:
http://blog.sellsiusrealestate.com/blogging/sellsius-joins-home-gain-blog-crew/2008/02/25/
http://blog.sellsiusrealestate.com/real-estate-marketing/home-gain-buyer-link-what-gives-with-buyer-leads/2008/03/17/
http://blog.sellsiusrealestate.com/studies/dressed-to-sell-survey-says-home-staging-helps-sell-homes-for-higher-price/2008/03/26/
Our image is not as tarnished as you may imagine.
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I'd say the bloggers are a savvy enough group to understand the differences between HomeGain and HouseValues. Let's go one step further and set up a simple poll somewhere and find out how HomeGain and other RE companies rate with the masses...
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Pat
HomeGain's mission is not to appeal to the masses, but rather to the select consumer who is interested in working with a realtor.
We are gladly willing to lose a popularity contest if the participants in the poll are consumers who are more interested in looking up the "Zestimates" of celebrity homes or fiddling around for hours with Google street view maps instead of working with a Realtor.
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I get your point Louis... the consumer may be completely unaware of the reputations of companies like Zillow and HomeGain, so both companies would theoretically be on equal footing in terms of reputation. And your point is that the HomeGain consumer is more likely to be a serious lead candidate over the thrill seeking readers at Zillow.
The discussion made me think of doing a quick reputation check on some of the more prominent consumer oriented real estate sites in the space. Frankly, the poll I just added is too simple, but I can't recall seeing anything else like it...
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May we all have fans. Read Kevin Kelly's "One Thousand Fans" at Technium.
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"HouseValues (the company with the 6 to 12-month lead lock in policy) and HomeGain are interchangeable to the masses of the real estate community. Here's to Louis' Fan Club...
When a puppy eats pile of crap on the street you don't blame the pile of crap for not doing a better job of differentiating itself from food. You best blame the dog for not knowing.
If agents view these two firms as interchangeable it's a testimony to the fact that agents don't read, don't investigate and don't respond to enlightenment.
The ones that do, score.
For two years Housevalues reports massive losses, layoffs and has not released a singe piece of innovation. Homegain continues to make money and innovate.
If agents can't discern between the two it seems a bit naive to lay blame on Homegain and cite them as a challenged brand.
And it might just be a bit naive to say that "bloggers" have a greater sense of things. No they don't. Just because someone blogs they are not by default smart or tuned it as I have witnessed.
I think we need to attend to the fact that not evey single problem in real estate can be solved by blogging. In fact, I will suggest that, like guns, by letting every have a blog, this industry is shooting itself in the head.
As for being a member of the Louis fan club, come on, how can anyone not look at Homegain and not be awed by their accomplishments.
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Frankly, I don't think "typical" agents can discern the differences between HomeGain and Housevalues, or even compare the different lead/advertising models being proffered by Realtor.com. They learn by signing the contract with one of the companies and find out what they got themselves into soon enough. I'm currently talking with Robin, a blogger in Irvine, who says she subscribed for an agent premium tier 3 placement for two slots / zip codes, paying $6,000 annually, expecting an exclusive. Then she finds out she lost control of her slots when HER broker was sold equivalent tiers that competed with hers and diluting her leads with her OWN broker! Robin's intelligent and she got blindsided unexpectedly.
"how can anyone not look at Homegain and not be awed by their accomplishments."
Yes, we can see it but you're giving too much credit to typical agents who can't discern the accomplishments. And then you're saying bloggers are not by default smart or tuned in to discern the differences between HomeGain and other companies... contradiction.
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Please note that HomeGain recently had layoffs numbering close to 30% of its workforce (they kept it a secret from the blogosphere, I wonder why!?!?). Sure they have an OK business plan but let's be real. They are far from being the top notch brand some of the spinsters make it out to be. It is a well known fact they have revenues of less than $30 million a year, which in the multi-billion dollar real estate industry amounts to nothing or very little. In my opinion lead generation companies will go the way of newspapers. Good luck during the economic collapse of HomeGain, its lead generating cousins and our great country.
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Pat you can tell Robin how to tell the difference between Realtor.com and HomeGain-We don't have a $6,000 a year "exclusive" packages for which you have to sign a long term contract for.
We don't offer our products under long term contract.
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Louis, I now know that HomeGain charges something between free and $6,000. So what's the deal?
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I don't think typical agents can discern either. We are in agreement.
Typical agents also don't realize that an Internet lead is like a fox that accidentally got caught in trap.
No contradiction here. I say Homegain's biz model is as clearly distinguished as the Empire state building from the Verazzano Bridge. If agent can't figure that out, they havn't tried.
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One thing lacking with RE web 2.0 is monetization. Being able to charge for a service indicates usefulness to the user. As players like Homegain, who already have a profitable model, engage in web 2.0, it's quite likely they can teach the RE web 2.0 players something - how to add the missing element of service -- value added. Also in Kevin Kelly's writings is the warning that advertising will not be enough -- you have to create something worth advertsing, something better than "free".
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Hi Robin
Thanks for your inquiry.
Here is a link that contains a description of HomeGain's products.
http://www.homegain.com/agent/realestateagent?entryid=9992
Rather than describe them here, feel free to email me at [email protected] and I can explain (not sell) the products to you.
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Louis, you are worse than me, don't you ever sleep! One thing I see which I'm not understanding is everyone comparing House Values and Homegain. Your models, last I checked were completely different. I guess that is obvious by the lack of profitability of House Values. When I used House Values they promised me the world and were extremely nice. In fact, I still keep in touch with my rep from there as she was awesome. However, as far as production, in the 6 months I signed on with them, I never got even a response from a customer. The difference being of course is I received business immediately with Homegain. As I said, I'm not sure why everyone is comparing the two companies.
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Mitch, one of the theme's of this thread is the fact that agents can't tell which lead models work, and subscribe to them on impulse to test it out. Since you tried Housevalues, you now realize the efficacy of HomeGain's model and can differentiate between the two. That's the normal learning process that agents go through. Even you could not identify beforehand that HouseValues' model was insufficient for your needs.
The other theme of the thread is once an agent gets poor results from one of the lead models, as Robin did with Realtor.com, all models become suspect. And there were so many suspect lead gen models over the past few years that it created a negative perception for the whole industry.
The conclusion, which is supported by the thread, is HomeGain is making great strides to differentiate itself positively from this prevailing perception.
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Mitch,
The thing is - not everyone is making the comparison. But I content that those who do do so out of self imposed ignorance.
Another important aspect to Homegain beyond what myself, Farmer and others regard as a critical feature - profit, is the fact that Homegain has a leadership you can touch and feel. I cant remember the last time or any time when Ian Morris or Dale Stanton descended from the high horse to mingle with the minions. Louis's hands on, almost single proprietor like accessibility is not only a huge differentiator but clearly illustrates why Homegain has a fan base.
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Finally I am able to sit down at my computer for a few minutes. Crazy day! We are on pace to set a record for the amount of monthly contracts written this month in my office. We are currently at 23. Our previous record for contracts written in a month is 31. Not bad for Internet leads that don't work according to most Realtors!
I believe one major difference between Homegain and some of the other companies I have tested in the past was the fact that they understand Real Estate and they have staff that actually have sold Real Estate. Most of the other companies are comprised of telemarketers, a lawyer, and a tech person. Not many of them, if any, have been able to take an office from scratch and build a working Internet model. I guess one could argue that Zip Realty has done that, but I heard being profitable is a good thing! Because Homegain understands Real Estate they are able to actually discuss how their product can help the average Realtor. Because of that they are able to reach people like myself who live and die by the Internet. I have converted my entire online marketing budget (90% of it) to using the BuyerLink program. By having a steady stream of affordable yet excellent traffic allows me to go into test mode to design my conversion tools. I believe once I launch my 100MPH Marketing Software Company it will be one of the few profitable Internet Real Estate companies. It's not just a software product with a great CRM, but it's also an Internet Solution. In the end, my success just proves that the Homegain BuyerLink model is very successful for not only Homegain, but for Internet based Real Estate companies. However, no matter how good the traffic, if an Agent doesnt understand lead conversion, they will still think that lead generation, Internet leads as well as Homegain are not worth it. Personally that's ok with me as I am the leader in the Internet in my area and nobody else has a clue. I love that!
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The discussion has spread to
here:
http://bonzai.squarespace.com/blog/2008/4/18/homegain-coming-on-strong.html
and here:
http://bonzai.squarespace.com/blog/2008/4/18/pat-kitanos-homegain-article-hype-or-results.html
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In the car Industry, the number of leads generated via the internet has
decreased, obviously because of gas prices and the bad economical situation.
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