The New Normal is a multistory Inman series exploring whats returning to normal after the pandemic fades and what will never be the same. Check back tomorrow for a new installment and join usJune 15-17when we take the conversation live atInman Connect.
LionDesk founder David Andersons father and grandfather practiced real estate for decades. His sister is an agent, and his step-father was a mortgage broker.
After success in software within the travel industry, the prospect of another challenge called to Anderson. So why not enter the family business?
Although I knew it would be hard work starting a new company from zero, and getting no outside investment, I was up for the challenge and was ready to have fun, Anderson said in an email to Inman.
He also shared the initial handwritten napkin sketch upon which he built his company. Scrawled on the napkin with a roughed-out logo, the message was succinct: Make sales and marketing easier for real estate agents. And thats what he did.
Once on the market, LionDesks $25-per-month fee gave individual agents access to a CRM they could afford independently and the freedom to operate with autonomy when their brokers offering cost too much money or wasnt the best fit for the agent.
The CRM proliferated by providing sophisticated lead management, generation and follow-up for the everyday agent. It was one of the first in the space to offer text automation, which empowers agents to program auto-follow-up campaigns using text instead of email, which had been the standard for a long time.
LionDesk also championed open ecosystems, a model that connects many common third-party tools to help users consolidate data and connect features. (Realogy is a champion of this open ecosystem approach.)
As it goes, LionDesk was sold to Canadian enterprise software builderLone Wolfas part of its recent surge in growth. When tech is acquired, customers often have concerns, especially related to their data.
However, several clients rightfully congratulated Anderson, who was transparent and ever-present with his user-base throughout. He will stay fully embedded with the software as general manager of agents and teams for Lone Wolf.
Nevertheless, his customers have a right to be concerned about what lies ahead for the affordable, feature-rich CRM. For every agent whose valuable tech gets sold, the concerns can include price increases, losing certain lead source partners, changing website templates or new lead-routing models, among many others.
And the technology agents use wont cease evolving. It will continue to automate, making the agents day-to-day life easier. And the more it innovates, the harder it is to break away from the daily conveniences it provides.
As was the case with LionDesk, theres a clear trend of CRMs and other valuable business tech getting acquired by larger names. Agents and brokers should consider this trend the new normal among all real estate tech sectors, from portals to back-office solutions. Tech is changing hands rapidly, and potentially taking the way agents do business onto the next company with it.
At this pace in such a limited vendor category within this pressurized market this trend has no reason to slow down.
The people behind these acquisitions are hunting for potential Wall Street trophies. And even though your favorite CRM may not end up publicly traded, it could end up emblazoned on the memo line of a massive check.
Its time for brokers and agents to begin thinking about how theyll react when a larger company likes their CRM as much as they do.
Lets first look at how CRMs have become the lifeblood of agents businesses.
It wouldnt be hard to find agents who once worked from an Act! database or maybe an Outlook contact list. These were the early iterations of lead databases. Before them, it was Rolodexes and hard copies. But this was true for all industries, not just real estate.
As the internet merged with business, solutions for keeping tabs on contacts and leads became a cottage industry and, eventually, an industrial enterprise. Once online home search took hold, agents needed ways to channel people from their website to their database without losing critical information.
From there, the fundamental business concept of customer relationship management staying in touch with clients morphed into whats now colloquially known asthe CRM,an amalgamation of omnichannel marketing, sales support, and account management. The CRM has gone from a value-add business tool to a fully integrated component of everyday business.
Todays software tells you who to call and email and then leaves the voicemail and sends the email for you. Who wouldnt want this tech empowering their business?
Vendors in the industry employ large teams of foreign and domestic coders, interface designers and product managers, all working to create new ways for agents to work smarter.
The advancements are taking work out of the agents hands, a powerful benefit when one considers how much work it requires to generate new business and manage whats current. Although automation and tools to simplify the workload for agents are out there at all levels of the CRM space, some of the more prominent names in the space are making them a priority.
For example,Inside Real Estaterevamped kvCORE for spring 2021. Its Lead Details module is more or less on autopilot, continually updating a users entire database by monitoring home search-related activity. It also double-checks the authenticity of the leads actions to provide the agent with everything needed to reach out. And kvCORE isnt the only one.
Highly popular CRM BoomTowns Success Assurance Program combines human interaction and marketing automation. The service actively monitors a database from the moment of account setup to gauge a contacts activity level, score them and then recommend the appropriate action.
This feature came about afterBoomTown discovered the longer a contact record (a lead) is exposed to marketing, the more apt they are to work with that agent. This tremendous realization aims to solve the long-standing call me when you decide to sell conundrum.
Hours of tedious, manual recording of lead follow-up is quickly dissipating with such automation and high-touch CRM database management, opening up critical windows of energy to be spent elsewhere, like managing blossoming deals and in-escrow transactions.
The result is making CRM technology ever more challenging to pry away from a busy agent and thriving brokerage. That tight grip makes switching CRMs ever more complicated, and providers know that.
The more valuable CRMs are to agents, the more dollar signs larger technology companies see in them. CRM solutions offer large technology companies access to intelligent technology that agents are already entrenched in, which can pose myriad problems for those agents. Brokers, teams and agents need to brace for this new normal.
Innovation happens faster in small spaces, where ideas quickly ricochet into features, and user feedback, not subject to a vacuum, is easier to implement. Startups become targets because theyre small enough to focus on solving a single problem and getting it to market quickly. They become more valuable to the marketplace.
DashCMA, for example, was built by a mom-turned-advertising-executive-turned-real-estate agent and sold in under two years to well-funded, long-established Inside Real Estate.
Similarly, open house solution Spacio was developed and championed by a small team. HomeSpotter acquired it, and itsnow part of Lone Wolf.
These deals move fast. The quicker startups disrupt a market, the more attention they command, especially when theyre small and offer a new take on an old problem.
Funding to proptech startups quadrupled between 2015 and 2019, with investors allocating $8.9 billion across more than 500 deals in 2019, according to technology economy analystCBinsights.com. Naturally, 2020 saw a slowdown, but the organizations reporting shows that theres ample room for growth in real estate tech.
Real estate technology has transformed the industry, putting more control in the hands of consumers and giving salespeople flexible solutions, Laura Adams, senior real estate analyst at Aceable, said in a May 25TechRepublic report.
Unfortunately, all of that money fueling startups can bring risk to the user.
Thus, its common for customers to leave a technology partner because of an experience with or assumptions about the new parent company. People will continue to get upset every time Compass, Opendoor, CoStar and Zillow make any notable industry move.
No better recent example of this can be found in the reaction to Zillows latest trip to the market, which resulted in it spending $500 million on the industrys most-accessed home showing tool.
Inman reader Clay Stapp was one of many who wasnt thrilled with the deal. Whats a good alternative to ShowingTime? Im done he wrote in the comments section of the story.
Wow Why would my MLS dollars go to support this in using ShowingTime, what a MISTAKE When are Realtors going to wake up and see what is really going on here? Robert Adams commented.
Other readers threw around the word monopoly and expressed concern about ownership of listing data.
Although no other technology company in real estate ignites as much passion in agents as Zillow, Compass is a relatively new close second. Its 2019acquisition of CRM Contactuallytook flack.
NO COMPETITOR IS EVER APPROPRIATE AS A VENDOR! Compass can say they will not access data from non Compass agents, but who wants to take a chance, reader Tom Bailey commented on the Inman story.
Interesting announcement from a company that thought that they were the only ones capable of developing a state of the art agent technology tool kit, Larry Knapp wrote. At least theyre not too arrogant to admit they were wrong. This will help put them on a par with the many great traditional brokerages who have been using Contactually for quite some time.
What those readers are communicating is not a rare sentiment, theres a great deal of passion in this industry, and its possible your CRM could end up under the banner of a company with a lot of heat on it.
In 2020, Naberly Solutions added to its offeringa sharp, competitive CRM. Within a year of that announcement,IntelliAgent acquired it.
Constellation Real Estate Group bought long-time industry CRM TopProducer in March to cap off an impressive buying spree. Its other acquisitions include marketing tech companyTorchX, lead-gen solutionOffers,Real Estate Digital,Baynet World,SmartZipandParadym.
But consolidation is happening in other ways, too: partnerships.
Partnerships are forming across the proptech space, all designed to merge common user groups.
If a CRM wants to add transaction management, it likely calls upon SkySlope or DocuSign. Or maybe if a lead-generation service wants to help its customers route leads, it might build a connection with a CRM.
Chimes built-in lead scoring recently got a boost byintegrating with relocation data service Revaluate, which owns a powerful algorithm for predicting when a person is likely to move. Its system constantly roams a Chime users database to detect activity indicative of a move, such as searches about new neighborhoods, portal browsing or credit checks.
There was a time when we believed an all-in-one platform was the best way to support agents, saidMike McGowan of Chime. Through our strategic partner program, we learned that by maximizing the potential of each best of breed partner and tightly integrating with our powerful CRM, we can deliver a more powerful technology stack to our clients.
Desire to expand is why open APIs (application programming interfaces) exist. Zapier, a tremendously popular product, was solely founded to connect different software products.
Its crucial for brokers and agents to look for specializations in their technology stack, which means multiple partnerships, explained Howard Tager, co-founder of Ylopo.
In a growing trend, the highest performing teams now choose to work with the top specialized providers in each category and make sure that there is seamless integration with these top gun solutions, Tager said.
Unfortunately, when a larger company comes for blocks of your tech stack, the benefit of that nicely assembled foundation can crumble.
Brokers have a hard enough time choosing a vendor and encouraging adoption. As big tech continues to absorb its more nimble rivals, more brokers will face more technology decision points, leaving agents wondering where they have to log in next.
These CRM acquisition trends illustrate why Gary Keller andRobert Reffkinare so driven to own their code, regardless of howbumpy the roadis to get there.
Agents within such brokerages should realize that outside of the entire brand being acquired, their tech is there to stay. They can feel better about committing to it.
Additionally, its much more likely that these brokerages will communicate software changes, problems, and updates ahead of time (in an ideal scenario), offering agents the opportunity to prepare and adjust as needed. Thats not to say your current independent CRM doesnt do that, but typically user feedback groups and feature beta tests are limited in size and scope.
The companywide collaboration and enterprise-level commitment to the technology can provide agents with more peace of mind about its longevity and support. In short, theres a were all in this together mentality.
Brokers and agents dont have any reason to believe your technology provider will abandon you. Thats an extreme way to couch the issue.
Sales and marketing automation are terrific advancements for the industry. Yet, how often does the user know the strategy behind them? Does the everyday agent with an already heavy task load really know how their CRM is scoring their leads?
Agents should exercise support teams understanding of whats happening when an automated response campaign gets triggered, and technology providers should be ready to explain it.
Agents need to make sure they have a grip on the underlying business and marketing concepts their CRM is performing for them. Additionally, they need to ensure their technology-based marketing plan is portable and can translate into a new system.
The set-it-and-forget-it approach is only good when you know how it all works. Thus, get into the weeds on why segmentation is essential for lead nurture and lead management efficiency, and take time to understand how a single-listing page works and what it does for your seller.
Its crucial for agents to know what percentage of their database is their own, always. The percentage of leads and contacts that are paid for by your brokerage and facilitated by your CRM are likely not yours to walk away with. Meaning, if you happen to get a new CRM, it will look a bit different because it will be working with different relationships.
The ever-changing technology landscape is a big part of why earned leads are gaining ground; they offer a stronger sense of ownership, control and longer-term ROI.
Technology providers should begin to share the systems behind lead analysis algorithms or find a way to make the process more transparent.
Providers can help their constituents by offering a little goodwill along the way. By no means should any business halt their long-range goals or sacrifice employee goodwill, but they can create a balance.
This could take the form of an acquisition promise that entails sharing plans to sell in advance or at least communicating as a deal is happening. Dedicated customers dont always have to find out their CRM was acquired by reading Inman.
They can do some customer relationship management of their own.
Lastly, the industry needs to do its homework on the rise of SPACs, or special purpose acquisition companies.
SPACs arecompanies specifically formed to acquire businesses and take them public, and theyre popping up all over residential real estate. Opendoor used one to go public, and former Zillow CEO Spencer Rascoff also has a SPAC thatsin the processof taking Offerpad public.Matterport is on its way to the stock exchangevia a merger with Gores Holdings VI.
Regardless of how brokers prepare themselves or what a technology vendor does for their bottom line, working in the right now of the real estate tech space must be similar to what its like to sit in the cockpit of a starship as it jumps to lightspeed: Its kind of a blur.
And agents are only along for the ride.
Email Craig Rowe
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The New Normal: What If Your Beloved CRM Is Big Tech's Next Target? - Inman
