Digital transformation in real estate: Nick Bailey, President and CEO at Century 21, tells CXOTalk how the largest real estate brand in the U.S. navigates changing global trends from data-driven competitors in property listings and homes for sale.
Century 21: Digital Transformation in Real Estate
President and Chief Executive Officer
Digital transformation in real estate: Nick Bailey, President and CEO at Century 21, tells CXOTalk how the largest real estate brand in the U.S. navigates changing global trends from data-driven competitors in property listings and homes for sale.
Bailey has more than 21 years of industry experience as a licensed broker, opened a real estate brokerage where he actively listed and sold properties, and previously served as Vice President of Broker Relations for the Zillow Group. He was appointed president and chief executive officer of Century 21 Real Estate LLC in August 2017, leading the iconic C21 brand and its approximately 7,450 independently owned and operated offices in 79 countries and territories worldwide.
Michael Krigsman: Real estate, it is changing! Today, on Episode #264 of CxOTalk, we are speaking with Nick Bailey, who is the CEO of Century 21. Hey, Nick. How are you? Thank you so much for taking the time to be here today.
Nick Bailey: Thanks, Michael. Glad to be here. Appreciate it.
Michael Krigsman: Nick, tell us about Century 21.
Nick Bailey: Well, you said it best. An iconic brand around the globe, this is an organization that has been a world leader in real estate, spanning nearly 80 countries, nearly 7,500 locations, and 115,000 sales professionals worldwide that are helping buyers and sellers every single day. This is an organization that, over its 46 years in existence, has grown to [be] know [as] the best brand between buyers and sellers on the entire planet.
Michael Krigsman: You're CEO of Century 21. Maybe it's an obvious question, but what does that mean? What do you do? [Laughter]
Nick Bailey: [Laughter] I like the question. Yeah, what do I do? Well, first and foremost, as a leader in the real estate franchise and organization within the industry, it's all about helping entrepreneurs grow their business. That comes in two ways. One is we help individuals that want to start their own real estate business and their own office. That's about attracting real estate professionals. My main job is to help those entrepreneurs grow their business. Then the second part of my job is to help real estate professionals capture buyers and sellers, and help them with the all American dream of owning real estate.
Michael Krigsman: Now, real estate is undergoing tremendous change. Maybe you can set the stage for us by describing what's going on in the market that's shaping real estate today.
Nick Bailey: There is a lot of talk about what's changing in real estate. I think it comes down to one thing, which is, we are in a consumer-driven movement. What I mean by that, it's not just specific to real estate, but it's also just how consumers are engaging with products and services. We can point to many companies that have been at the forefront of this movement, companies like Amazon, like Netflix, like Uber.
Via the mediums of technology, consumers are able to make things easier, faster, or take anxiety out of the process. How that translates to real estate today is, the home search process is very popular. People jump online. They jump on their mobile device looking for property, dreaming about property in certain vacation areas, and they get very involved.
Real estate is a hot topic. Look at television shows about remodeling your home, or should I stay in it or buy something else? It's just something that's become at the forefront of consumers and excitement.
With that, though, comes a great deal of opportunity, which is, if anyone has bought or sold real estate lately, they know that the home search part of it can be fun and exciting. But as soon as you go into the next steps of the home shopping and going into actually purchasing a property, the process of how you go from purchasing that property to moving into it has a lot of room to be improved. Unfortunately, you ask many people that have bought a home recently if they'd like to do it again soon and, generally, they say no because the process to get there is so complex. That's where having a real estate professional to help with that process is crucial.
I saw a recent study that said there are, on average, 181 steps from the time you start looking for a property to moving in. That creates a lot of complexity, and so we have to help solve for that. Consumers are demanding better experiences with lower levels of anxiety, and we have the opportunity, as an organization and as a brand, to help make that process better.
Michael Krigsman: The consumer experience dimension, can we say that's your special sauce, or is that your focus? How would you characterize that?
Nick Bailey: As you mentioned, with a lot of change that's going on in the industry from what does home search mean, how do consumers engage with their real estate professional, and how do all those components come together, here's what I know. The real estate professional is still the most important part of a real estate transaction for someone wanting to buy or sell. There is no level of data or analytics that can do the job of what a knowledgeable professional can do to help someone make what is generally the biggest financial decision of their life.
It's still very emotional. If you look at all the data and analytics behind price depreciation and comparables within a neighborhood, still you walk into a home and it's a very emotional process of, do I want to live here; do I want to raise my family here? Here's where the memories and the holidays take place.
There's a balance between that emotional need and then the financial analytical side. When we look at it as an organization, we have to balance both of them, which we're dealing, at Century 21, with entrepreneurs that want to build their business and help people buy and sell. We're also dealing with consumers that are buying and selling and saying, "I am demanding a better process." We have to, as leaders, be able to bring those two constituents together to create a better result for both.
Michael Krigsman: Popularly, this notion of data and just being able to cut out the middleman seems to be very important. Where does that fit into the scheme of things?
Nick Bailey: Let's start with this. When you talk about cutting out the middleman, I'm going to translate that as maybe thinking cutting out the agent. [Laughter] If that's a fair assessment.
Michael Krigsman: [Laughter]
Nick Bailey: You'll look. Just two weeks ago there was data released that for sale by owners are at the lowest level that they've ever been in history. They keep declining. The question is, why?
One is because the transaction continues to get complex, more complex than it ever has been. You look at what's happened with financing. We're approaching the ten-year anniversary of the decline that we started to see in 2007. As a result of that, financing created more regulation, more complexity for the average homebuyer, and they need someone to help navigate it.
It's not just about data. It's about knowing how to go into the property, what's happening with the neighborhood. An agent knowing that, for example, the city council just approved that there are train tracks that, next year, are going to be going through the backyard. There's that community type of knowledge that a certain level of data will never be able to provide to someone that's making a huge, huge investment.
Here's where data can be really good, though, is in the education process. Especially for first-time homebuyers, you look at 47% of transactions last year were done by first-time homebuyers. Of that, 53% of them were under the age of 35. They are using online data and analytics to help educate themselves on what they should be looking for in the process. But, once you go into the actual process of buying, there are so many areas where the transaction can go wrong, from financing, the appraisal, the inspection, [and] all those negotiation pieces that have nothing to do with data, but have everything to do with getting to the closing table.
Michael Krigsman: The issue then from your perspective is the appropriate use of that data, knowing where to plug that data into the process, that complicated process you were describing, and simplifying the process with that data, I suppose.
Nick Bailey: Yeah, and I would say there are two things from that comment. One is, here's where data can be so useful, like I mentioned, the education process and the home search process. Where do I want to live? Where does my family need to be? What's happening in the neighborhood with pricing on homes? Are the values going up? Are they going down? Are they staying the same?
Creating that level of data, of empowering people to be able to see what's on the market, see what's not on the market, and do their homework on certain neighborhoods. I'm doing this myself right now. I happen to be going through a relocation, and so I'm using an immense amount of data in looking at neighborhoods and comparables on properties to find exactly the right area.
At the same time, when I visit the area that I'm looking to move, my agent is so critical of how he's helping create lifestyle for my family. My wife is a huge outdoor enthusiast, and I have young children, and so schools, sports, and community is really important. The data doesn't show that. That's where I think that you can couple data in your home search process for what house, what neighborhood, what's right for the financial side of it, what do I qualify for? Then you combine that with the community knowledge of a professional to figure out lifestyle of where you want to live.
Michael Krigsman: The role of a professional then is to help aggregate that data, but combine it with an understanding of your emotional and psychological needs, family needs and so forth.
Nick Bailey: That's right. They have to know the needs. I'll give you a great example. When I called and interviewed my agent, I said I was moving from Colorado to New Jersey. His first assessment was, "Do you happen to be outdoorsy?" I said, "Interesting you mention that. My wife rides her road bike 60 to 80 miles a day in good weather, my boys love to ski, and we play golf." He was translating this to, "Okay, we need to find you access to outdoor activities.
He asked if we had ever lived on the East Coast, do we have family friends [there]? We said no. He immediately said, "We have to find you a community where you can meet people." Those are all those components of what's really important for my family for lifestyle that the data can't complete.
I think the same holds true for every single person looking to buy a home. Where do I want to live? Where am I going to feel comfortable raising my family? And, does it fit my lifestyle? That's where, to me, the agent is so crucial in the real estate transaction.
Michael Krigsman: How do you plot a course considering the technology, considering the data, considering all of these things? What are the steps that you need to take as you plot the course for Century 21 going forward into the further reaches of the 21st Century?
Nick Bailey: Love that question. That you for that. It comes, in my mind, in two buckets. One is serving consumers, buyers and sellers, and the other bucket is serving real estate professionals.
As the leader of the Century 21 organization, we have to figure out, from a technology perspective, how to satisfy both of those constituents. When you look at the consumer side of it, we just talked moments ago about how they want to see properties online. They want to see big, beautiful photos. They want to see every type of information they can on as many properties as they can.
We're in a low inventory market nationwide, and so the need for looking at accurate data quickly from a consumer perspective is really important. What's new on the market? What does it look like? Is it in the neighborhood I'm looking? From a technology perspective, we want to make sure that we're serving up the absolute best, most timely information about real estate listings to consumers as we can. That will help create engagement with our system.
Then when you look over on the other side of it, the other bucket that I mentioned, which is for real estate professionals, our job is to help them be productive and simplify their life. We know that, with consumers and agents alike, mobile is where everyone is. Very few people are sitting behind a desktop, fewer and fewer people all the time sitting behind a desk doing searches and spending time. They are driven through their mobile device of their interactions.
From a technology platform, what I want to see within our organization is to create a mobile-first platform that helps connect buyers and sellers with our real estate professionals and helps them take their buyers and sellers from search to close because that process can be rocky. If we can make that process easy for our agents, which in turn makes it easy and transparent for consumers, that to me is a winning formula.
Michael Krigsman: Nick, how do you transform the organization to adopt these changes that you're describing?
Nick Bailey: First off, I mean the beautiful part, I told you the magnitude of this organization globally, which we have an incredible foundation with the number of associates, the number of offices, the number of transactions and the buyers and sellers that we help on a regular basis. Awesome foundation to catapult some of these initiatives, these forward-thinking initiatives from. At the same time, whenever you have a large organization at scale like this, any type of innovation that comes to market, it takes a lot of energy to get the entire system to adopt and move. That's just the responsibility that we have as an organization. If we're making the right decisions for our agents, and we're making the right decisions for consumers, in making this process of buying and selling real estate easier, then they'll be quick to adopt.
If we're serving up exactly the right things, they will be coming and saying, "We're going to carry the load of adoption for you." If we don't, and we miss that mark, then it is very difficult to turn. But, I would rather start with the foundation and the global presence that we have as an organization than start from scratch with no one and no countries, no transactions.
Startups are very difficult. We don't have that challenge. We just have the challenge of saying, "We have a 46-year-old killer organization. How do we now take 46 years of brand equity and make it relevant to the future and for the next generation? We can do that.
Michael Krigsman: How do you do that? As you said, it's an enormous, large organization. How do you take that brand equity and use it as the energy to bring forth that innovation and move that entire organization? It seems like a big challenge to do that for any company.
Nick Bailey: We have a big advantage. What that advantage is, is having when I talked about nearly 7,500 locations. Those are independently owned and operated locations, which means we have nearly 7,500 entrepreneurs out there that have partnered with us that have said, "We want to partner and be part of that innovation with you."
It's not as if we're looking at an organization of, say, 115,000 employees that you're trying to steer a ship, but you have business owners that have a vested interest in their success as a business owner and have partnered with us. Because of that inherent nature of the relationship, they are saying be leaders, be innovative, provide it to us, and we will be super excited to take it to market. When you have that many entrepreneurs on the ground level and on the forefront saying, "We're here to carry that load for you," it does make it a lot easier to create a very quick initiative or momentum on innovation.
Michael Krigsman: We have some good questions from Twitter. Bob Latigona--and I hope I pronounced his name correctly--says, "It's time to change your image from your grandfather's real estate company to a new, updated image. What's the plan?"
Nick Bailey: I hear that a lot. This also comes in two buckets. Thanks for the question, Bob. Consumers, when it comes to the Century 21 brand, they love it; they know it; they trust it. It always ranks highest in every survey of brand name awareness in real estate. The terms are synonymous. When you think real estate, people think Century 21. When they think Century 21, they think real estate. That's great for consumers.
We also know and are not naïve to the fact that, within the industry, when you take an organization and a brand that's been around for 46 years, we have to blow the dust off of it. What I mean by that is we have to reinvest in a complete overhaul of brand image within the industry. We started that work this summer. Even before I came onboard, the team started working on it, and we are moving at an incredible pace on this.
What does that mean, brand image? Let me give you an example. I think Apple is a great example that I think a lot of consumers can relate to. I remember in elementary school going in on the Apple IIe, and you had to swipe your hand under the keyboard so you didn't shock the system. As they evolved, if you think of them today, think of when you see a commercial; when you visit their website; when you receive one of their products, what the packaging looks like; when you walk through the mall and you see what one of their stores looks like. There's a cohesive nature about their brand image that has a very innovative, forward-thinking feel.
We can do the exact same thing with our brand, which is, what are consumers demanding and wanting and, at the same time, what are agents demanding and wanting? We've already received that feedback, so now it's up to us to deliver on it. From everything we do, from consumer-facing marketing, from collateral and tools and services that we provide to our agents, from our actual image, from our logo, for example, all of that we can work on and evolve it to make sure that it looks like today and in the future. That work is well underway, and we have a very aggressive timeline, early next year, for starting to bring this to light not only in the industry, but for consumers as well.
That is the reason I'm here with this position that I recently accepted and why I'm most excited about the organization because, essentially, we're making the Century 21 brand the very first challenger brand in the real estate space. A challenger brand is all about the relentless pursuit of innovation and forward thinking.
In fact, we already have a new mission statement. It is to defy mediocrity and create extraordinary experiences because--let's face it--as long as the National Association of Realtors, which is our membership system, is all about numbers, we have low barriers of entry to getting a real estate license. We will always have this huge spectrum of people that dabble in real estate, and we also have the other spectrum of wicked, amazing professionals that completely raise the bar. That's just what we're dealing with in our industry is everything in between.
We as an organization say we have to be innovative, be the place that people want to be. We have to show it, demonstrate it, and make sure to bring all of this to life and not settle for anything less. That's the new charge of the Century 21 system. When you couple that mission with what will be, months away, the new look and feel of the organization, I think it's going to be a powerhouse.
Michael Krigsman: Nick, you've just been talking about innovation and brand image, ensuring those two match up. We have a bunch of other questions from Twitter, and here's an interesting one from ... (indescernible, 00:19:43) account, which is asking, "How does Century 21 deal with digital platforms like Zillow, with A.I., artificial intelligence, big data, and all of that?" You alluded to that earlier, but maybe if you can touch on that more directly.
Nick Bailey: Sure. Yeah. I'm glad you asked that Zillow question because, prior to coming to this role, I actually spent some time at Zillow. A wonderful company, and I think that they've done amazing things for the consumer experience within home search.
Here's what I know. You're using Zillow as an example. There are several other companies that do something similar. They have done a great job in looking at what are consumers wanting in their home search process. They've done a great deal of work in this home search area. As soon as homebuyers and sellers move into, say, home shopping to close, which is the main part of a transaction, that's where the shift happens. And so, they are a great example of consumers demanding; saying, "I want insight. I want information, more that's readily available to me about neighborhoods, housing, prices, and lending." Zillow has served that up to the consumers.
Now, still, the consumer then goes and actually starts the home shopping process. Once they go under contract, it's almost as if we shut the lights out on the consumer. Then they have to work with their agent. Is the appraisal done? Did I get approved on a loan? Do we have inspection issues? There's this constant back and forth that creates a lot of anxiety for a homebuyer. That's where we still have to solve for.
Now, in terms of big data, there are so many things that can be done when you look at, for example, some of our technology today at Century 21. We are able to allow an agent to work with their sphere of influence. If their sphere, if their buyers start to go online, are looking at properties, and start to engage in that process, our technology alerts our agents to say, "Hey, one of your clients is looking at real estate and may want to get involved with you." We try to connect those dots.
I think, moving forward, though, there's going to be a lot of interesting dynamics around predictive analytics for home sellers. Look around a neighborhood. Can we use technology and big data to figure out who is going to list their home for sale, say, in the next six months? I think we're going to hear a lot more about that. We're already engaging with a company to look at what those opportunities are because, how great would it be for our real estate agents to be able to serve up, via technology, some data of showing people that may have a need to move so that we can be right there to help them through that process. I think we're going to see a lot more of that on the seller side, but we absolutely can use data to help consumers and agents alike.
Michael Krigsman: Okay. We have a bunch of questions from Twitter. Let's jump into those. Again, I apologize for my audio. Fortunately, everybody is here to hear Nick, and so his audio is good.
Arsalan Khan, on the subject of agents, makes the comment that agents come with biases like everybody else. How do you tackle those biases in the home advisory phase that you described earlier?
Nick Bailey: In terms of biases, did they give a specific example?
Michael Krigsman: How does the agent ensure that the buyer is getting what they want as opposed to the agent projecting their emotions onto the type of potential purchase?
Nick Bailey: Sure. Let me answer this kind of from a broad level, which is, right now what we're dealing with within the industry and consumers is somewhat of a clash. Here's what I mean by that. When you rewind the clock even 20 years ago within the real estate industry, agents had full control of all of the data. When I say data, it was what homes are for sale; where are they? That was driven through even hard copies of books, MLS books. It was a scenario where you'd invite a consumer in, and the only avenue of figuring out detailed information on what's for sale in the market was via the agent.
You still have a number of agents within the industry that were so used to their value proposition being a conduit or someone that delivers the data that now all of a sudden we've moved way past that. The data conversation, to me, we're on the back nine. All of that information is public. It's out there. You can find it. It's easy.
Now it's about creating value of an exceptional experience, which, as I mentioned, we know it can be a rocky experience. We're really in the customer service game, not the data game. What happens is, you have agents that are still used to providing that level of data or wanting to control that consumer experience where the consumers are over here saying, "I've done my research, Mr. and Mrs. Agent. Here are the three houses I'd like to see." That data exchange in terms of how the information is served between the two has flipped, and some agents are having a hard time responding to it.
You look at, for example, on some of the platforms that have automated valuation calculators that you can go on and see what homes are worth. That can drive agents crazy. They say, "No, I'm the expert on pricing. These websites shouldn't be telling buyers and sellers what these properties are worth." You get this collision of agents saying, "I should have that job." Consumers saying, "Yeah, but I want to search that out on my own."
That's where I think we have to bring clarity between agents and consumers to say, "If consumers are demanding this information, we have to serve it up to them because they're going to find it one way or another. Then we have to be there to help them through a very complex process. That to me goes back to somewhat of a bias is, "Hey, I controlled that data before, and I still want to as a real estate agent." But the reality of it is, those days are behind us, and so we need to be thinking ahead saying, "What does the consumer want?" and we need to be delivering a better experience to their wants and needs versus what we think they want and need, as an agent.
Michael Krigsman: You mention that you are in the customer service business. Therefore, can we take away that the role of the agent becomes, as we were saying earlier, the lever point for pulling together the data, the psychological demographic information, the family goals of that buyer in order to create as easy a process as possible in this very complex and difficult environment, which is buying real estate?
Nick Bailey: A good agent will make it look like it's easy. Put it that way. They are the collection point of all these different components, not only data, but also the potholes that exist. Good agents can anticipate things, essentially anticipate the unexpected needs of what could go wrong with a transaction. They can help keep it on course.
I see it all the time. I see people go into purchasing a property, and there are going to be bumps along the road. When you have an agent that can help navigate those, whether that be with the financing, whether it be with the appraisal, whether it be with the home inspection, there are all those different components that come into play along the process before you move in that have to be dealt with.
Having someone experienced to know how to deal with them can absolutely make or break whether or not someone ends up at the closing table. That's where an agent not only has to be knowledgeable about the area, the community, the home, but it's just as much or more important for them to be knowledgeable about the process of how to get someone through the funnel, to the closing table so that they can move in. It's difficult, and it has potential to have a lot of disruptions. You have to be able to navigate it well.
Michael Krigsman: This has become a little bit of a town hall on Twitter for Century 21 agents, and why not? We have a question from @Century21Universallux, Century 21 UniLux, who says, "Will you combine the five branches of the brand with featured advertising so people know the full power of the brand."
Nick Bailey: I think if heard you right, will we combine certain branches of the brand? When they say branches, I'm assuming they consider things like commercial, Fine Homes & Estates, maybe some of those things. When you look at it, obviously consumers have different needs. Some are high-end luxury buyers. Some are farm and ranch. We have some of our agents who specialize in commercial.
I think the key is--again, when you think real estate, you think Century 21, and vice versa--we have to make sure that we have agents that are experts in every one of those areas and that and that we have the ability that, when a consumer raises their hand and says, "I'm a high-end buyer and I'm interested in luxury properties, we are pairing them with the right person that specializes in that area. I think it's more important, not as much even to advertise those different segments, as much as it is to connect those people with the right people because that's how you're going to create the extraordinary experience.
From an advertising perspective, we want to make sure the consumers know, trust, and understand that if they're dealing with Century 21, they're going to have a successful experience, an exceptional experience. That, to me, is what should happen at the top level with advertising. The specialties of the branches should happen between consumer and agent.
Michael Krigsman: That's interesting. The foundation of that consumer experience is confidence and trust in the brand, and then, of course, the agent needs to execute against that in a similar manner.
Nick Bailey: They do. The agent creates the experience for the consumer. They're completely dependent on it. That's where I think, if you move forward looking at technology, we can combine technology, increase the level of transparency to the consumer along the process to where there's interaction via technology from home shopping to close that allows consumers to be part of that process even more so. It will also help the agent because good agents make it look easy.
Sometimes consumers say, "Why am I paying an agent so much money? This process seems really easy?" The agent is back there wiping the sweat off saying, "Mr. and Mrs. Buyer/Seller, you have no idea what I just did to get you to the closing table."
And so, there's a disconnect there, and that's where I see technology moving forward in the next five years of bringing those two together so they can share in the experience. It takes the anxiety away from the consumer. It increases showing the transparency of the value of the agent and will help move along to a successful, easier, less stressful process to close.
Michael Krigsman: We have another question from Twitter. MichaelangeloAmantia is asking about the technology systems. He wants to be able to do things like capture his own buyer leads instead of having them sold back to them, similar to Zillow, and then he talks about user experience. I guess if we abstract that out, what's the role of technology for agents going forward, and where do you see the role of Century 21 in developing technology to fill that gap to support the agents?
Nick Bailey: Yeah, let me start. I like this question. I hear this a lot because, when you see technology marketing companies out there that are marketing real estate listings, I hear this all the time. "Why should we provide our listing content to online marketers, and then they sell us back our leads?"
Let's keep in mind that there was a point in which, even when I started my career selling real estate 21 years ago, that we were somewhat, as agents, jack-of-all-trades, master-of-none in the sense that we developed all of our own marketing, and we developed all of our lead gen. Then we took them through our process, lead to close, and our paperwork. We had to do so many things.
At the same time, we relied on newspapers and magazines to be the marketing challenges. They had distribution. They had scale. Even though they were expensive for us as agents to advertise with, we could not go out and create our own newspaper or create our own magazine and scale it the way that those marketing arms could.
I think the same holds true today, except we're seeing it online. It's not as much about us providing listing content and these companies selling back leads to us, but it's what we know is, in any business, you will spend marketing dollars. As much has changed, just as much has stayed the same. What I mean by that is, as a real estate agent, you're looking for someone that wants to buy and someone that needs to sell. By doing that, you work your sphere. You also spend marketing dollars to hopefully create that buzz and that attention back to you.
When I spent money and bought a half page in Harmonhomes or Homes Illustrated, I was hoping someone would pick up the magazine. I provided them [with] my listing content. I paid for it to be in there. What I was hoping is that they would pick up the phone and call me. I would capture them as a client and hopefully turn them into a successful business.
The same thing happens today. We are providing our listing content to online marketers or magazines, classifieds, if you will, and the difference is, today, the newspapers and magazines didn't allow you to put that information out there for free. I couldn't call and say, "Will you put my ten listings in for free?" and they say, "Nick, I'm happy to do that." There was always a charge.
What's awesome today is you can put that content out there and create activity on your listing content that can return leads back to you, and you haven't invested a dollar. Now, you have a choice in the online lead game to invest more to put fuel on the fire, to increase that lead flow back to you. But, at the end of the day, we know this. Agents will always spend marketing dollars to create interest in finding buyers and sellers.
That is exactly what's happening today, especially with technology today like these mobile devices. I can't go out and create my own mobile device. I have to rely on Apple or Android. I want to leverage it. Because of technology, you are seeing buckets of specialties. You see companies like Realtor, like Zillow, like Trulia. They are specialties in online marketing, and that's what they do really well. We need to let them do that, partner with them, but leverage them for our business just as we did magazines and any type of more classic type advertising from years past.
Michael Krigsman: That's interesting as well. Those data-driven companies are essentially marketing organizations using that data even though your core competency is in the underlying data rather than in marketing, per se.
Nick Bailey: Here's where I think we'll get ahead because, ultimately, all of our entrepreneurs in our system, whether you're a broker/owner, whether you're an agent, they are in business to make money and grow their business. That's why they've joined up with a well-known brand like ours. We can't be experts in every single component of the business. Sometimes we have to partner with them.
What I believe we need to be great at, moving forward, is creating that exceptional real estate buying or selling process. We will not own 100% of the lead gen. We will not own 100% of every single one of the processes that go through. We don't own 100% of the appraisal companies or the mortgage companies. Let's allow those experts to be really good at what they are. We partner and leverage them, but we need to be the very best at what we do, which is helping buyers and sellers transact. If we do that and create a phenomenal experience, then that's going to deliver even more repeat and referral business back to us because, ultimately, we don't want anyone to buy or sell real estate without it being done with Century 21.
Michael Krigsman: Where do you see the technology of all of this going?
Nick Bailey: Yeah, so specifically here's what I see. One, mobile first. I mentioned it earlier. Everything is mobile. It's where consumers [and] it's where agents are doing their business. But when you look at [it], no one yet in the industry has solved from lead to close.
What I mean by that is, I raise my hand; I inquire; I'm interested in buying a property. I go and I look. I submit an offer. The paperwork and how that's done on transaction management, taking you through all the steps to get it to the closing table. Then getting down and signing that final 180-page book at the closing table to actually own the property.
That's where there's opportunity from a mobile perspective. I envision a space where I, as a real estate agent, can use my mobile device that a lead comes in, and I can take that lead through the entire process. If you want to see homes, I interface with you via my mobile device. When you're ready to write an offer, I'm writing an offer on my mobile device and submitting it to the necessary stakeholders. When it comes down to an appraisal and how that fits into the transaction [that's done] via the mobile device, [and] the financing that comes through. Even to a point when you get to the closing table, I envision a day where buyers and sellers will sit with a mobile device and sign all of their closing documents instead of going to the title company and actually having a close.
I think that the mobile device is going to transcend that transaction process. That's where we have to be innovative as leaders in this space in saying, "What can we invest in to make sure that we're delivering an awesome mobile experience from lead to close?"
Michael Krigsman: To what extent do you foresee technology becoming a core competence of Century 21 because, after all, you're ... (indiscernible, 00:38:37) relationship in the buying and the selling business, but you're not inherently in the technology business?
Nick Bailey: We already are. It is already a big part of our DNA, which is, right now we have the ability for consumers to search for real estate using our consumer technologies. We also have productivity tools, marketing tools for agents that are available.
The thing that we have to do and realize, though, is once that technology comes out, we have to constantly be thinking about the next one. That's just the space we're in. Everyone can relate to mobile devices. You get a brand new one. I just received mine last week. I'm already thinking about how I make sure that I get the new one that's next year.
We have to stay ahead of that curve. That's our job as leadership from a brand perspective is to say, "What technologies are out there? Are there some that we can build and make proprietary in-house because we have phenomenal technology resources?" But, we also have to make sure to say, "Our core business is not a technology company, so there are times that we need to go out to the street, find best in class, and incorporate them into what we do. Let those best in class companies be great at what they do, leverage them, and bring them into our platform." That's what we plan to do.
Michael Krigsman: Technology is, remains, and will be a core part of any ... (indiscernible, 00:40:00) judgment, what we develop in-house, what we buy, where we stake our claim to technology, given ... (indiscernible, 00:40:08) continually changing, and your focus ultimately is on that relationship with your buyer and seller?
Nick Bailey: Yeah. Today, here's the reality of what's happening in real estate. The space is very fragmented. What I mean by that is there are agents--I know if they're listening, they'll be shaking their head yes--that are using two, three, four different systems to do their business. The innovation, to me, is going to come with integration. Making an agent's life easier is being able to utilize one system.
For example, what I mean by that is every lead source that they have, whether it be online from their website, maybe an advertiser's website, coming from the brand's website, whatever lead source they have coming in, they need it to dump in one single spot so that they can manage their business efficiently from there, not log into three systems. Even if you're not in real estate, we all have that where you may go to your bank for something and your credit card for something else. Agents are dealing with that all across the board with multiple platforms.
Our goal within Century 21 is to say, "How can we create a singular base program that everything can plug into and integrate?" because that to me is innovation of when everything talks to everything else. We're not there yet, and that's where I see it as great, great opportunity in technology because I think the real estate industry lags in overall technology innovation as a whole in society. We can move faster at it.
Michael Krigsman: We have only three minutes left, so I'd love to explore what you were just talking about, but I think, to close, maybe it makes sense to ask you for advice that you can offer to agents in how they can survive and they can thrive in this changing environment that ... (indiscernible, 00:42:02).
Nick Bailey: I get asked that a lot. Here's what it is. We're in a very noisy space within real estate right now. There are a lot of startups. If you look at 2017, it is set to have over $1 billion of capital influx into just technology innovation. It's the highest it will have been in years. It was climbing before 2007. Obviously, the trajectory changed on that a bit. It's on a steady climb, but over $1 billion of capital coming in for new technology. You have startups popping up all over the place.
We're seeing prices increase. We're seeing low inventory markets. Real estate is hot. When it is hot, we start to see a flavor of everything coming out of the woodwork. What that does for agents is creates a whole lot of noise to say, "What should I invest in? What should I be using to expand my business?"
Here's how I would narrow it down.
- A successful real estate professional works their sphere and knows that the vast majority of their business will come from repeat and referral business. If you've done business with someone, keep in contact with them. They're likely to do business with you again. It sounds simple, but it's so easy to go to the closing table and then forget to talk to your past clients. That is still the biggest basis of where you can grow your business.
- Invest in marketing, and I say marketing where you advertise. If you invest in purchasing online leads, whatever that is, track it because we can get, in all this noisy space, the hot flavor of the day. Agents say, "Oh, I've got to go spend on this," and they throw their credit card down. Six months later, they haven't looked to see if there's any result. Don't toss money where it doesn't need to be tossed. Make sure you're investing in your marketing and you know that it's delivering you a return.
- Be the very best master of your trade in creating an exceptional experience for buyers and sellers because that is where I believe, as long as I'm alive, the agent will be at the foremost most important component of a transaction, creating an exceptional experience for a buyer or seller.
Work your sphere, track your ROI, and make sure you are the very best at what you do in taking a buyer or seller from lead to close.
Michael Krigsman: You have been watching Episode #264 of CxOTalk. We've been speaking with Nick Bailey, who is the CEO of Century 21. Thanks so much, everybody, and have a great day.
Published Date: Nov 17, 2017
Author: Michael Krigsman
Episode ID: 482