Stop Trying To Sell Me On What Business Model Is Right

If you watched 60 minutes on Sunday, you probably saw the story on a Seattle real estate company called Redfin. 60 minutes featured Redfin because of their new, discount, limited service, rebate business model.

Discounting is nothing new in real estate or in the business world. We have Walmart, Cost Cutters, and even McDonalds would fall under this category of discounters.

There is a lot of opinions about Redfin and other limited service real estate company’s out there. I don’t care about them. I don’t believe shouting louder or longer makes someone right. I don’t believe by telling someone they are wrong makes you right. I don’t believe many Realtors have the right to call themselves professionals based upon their behavior, whether they are limited service or full service.

I stopped by Redfin’s blog, because I knew Glenn Kelman, CEO for Redfin would have something to say in the aftermath of these PR stunt. Glenn wrote a post entitled  “60 Minutes Aftermath: Hell Hath No Fury Like a Realtor Scorned“.

I posted the following comment to his post:

Glenn and Redfin staff, 

Congrats on your press and exposure. It must be an exciting time for all of you as you watch you vision get heard by more and more of the public. I’m not sure though why you are trying to spin the real estate industry as a bad guy though. If you believe that you are it’s savior, good for you, but the consumer will speak with the all mighty dollar. I am reminded of a story of a hair salon in Denver Colorado that was full-service and charged a beginning price of $35 for a hair cut. A Cost Cutters opened up across the street, with a big sign in the window “We charge $9 for a Haircut”. This full service salon felt it was in trouble didn’t know what to do. How do you compete with such low prices? They figured it out! They put up a sign in their window “We FIX $9 haircuts”.
Discount models have been in the business since the ’70s. Discount, flat fee, rebate, refund is nothing new.

Glenn, you and your staff are doing a great job of PR and marketing but just because you shout the loudest doesn’t make you right. The same can be said for NAR and Realtors. We are all shouting that we are right and we provide value. Everyone needs to stop shouting, shut-up and actually start providing some value.

Glenn, I have watched you on many online videos. You are a like-able guy. You are creative, passionate and determined, but if I could offer up some advice. You have the ability to make some change and be a leader, but by shouting about how wrong people are and pointing fingers. people are only going to dig their heals in even if you are right. Try some honey. Focus on what we all have in common. Believe it or not, the real estate industry is concerned about the consumer, we are just taking different routes to get there. Try persuasion, instead of damnation.

Glen Kelman responded back:

Hi there Edyn Real Estate:
Thank you for the excellent advice. We try to focus first on customer service, second on technology. We believe this has allowed us to offer a meaningful alternative to traditional service, which is why we have attracted the attention that we have. My own personality is somewhat beside the point, though I feel like a dork whenever I see myself on TV. The overwhelming majority of our public comments are about our own service. When asked, we will say loud and clear that we believe the industry needs reform, but we don’t have a beef with individual real estate agents and mostly we are just proud of what we have done so far for our customers. I am not sure where anyone has heard me criticize individual agents, though if I have, it will undoubtedly show up as a comment on this blog post in a jiffy. We sometimes get stuck in a defensive posture though, so your advice is very welcome.

I followed with:

Glenn,

You are a gracious, considerate person and I can not imagine the amount of stress that you under go with the personal attacks and business model attacks you get daily. When you say “we will say loud and clear that we believe the industry needs reform,” why is that needed? I can see you saying it needs alternatives, it needs choices. However when you say it needs reform that implies that even the consumer is wrong and stupid for choosing to do business that way. Be an alternative, be a choice. People love choices, they don’t like to be told or FEEL that they were wrong or are wrong. Look, if you really are about the consumer, why try to make them wrong? The consumer might feel uncomfortable doing business a new way, the consumer might feel judged by you, for feeling comfortable with a “traditional” broker. If you are truly for the consumer, wouldn’t it make sense to stop making them wrong?

Glenn and Redfin have very little real estate experience but enormous amount of tech knowledge. More things for Edyn Real Estate to think about in the idea of our Mission and Vision.   How do we view the consumer? What is our value to them? Do we view them just as a transaction? Do we want a relationship with them? How important is a handshake to us?

Here are some other places to read more on this:

Real Estate Undressed: The Skyhook Theory

Bloodhound Blog: 60 Minutes Redux- What it means to be Nordstrom?

Bloodhound Blog: Talk to the Clown-Would you like fries with that?

360 Digest: Waiting for the dust to settle

Rain City Guide: Stirring up the Redfin dust