We are in the age of data. Data is the “new oil” — able to power new revenue streams and improve efficiencies in existing ones. With the relentless rise of both the amount of data and our tools to process it and turn it into actionable insights, it is up to all of us to get the benefit or be left behind. With new technologies from giants like Amazon, Microsoft and IBM that combine data with “deep learning” to create real insights, the challenge now is what to do with those insights.
The property industry has been slow in using data effectively. There are isolated pockets where data is used to acquire customers, such as listing presentations used by real estate agents, or manage mortgage risk using credit and property valuations data. In general, though, as an industry we have been poor at execution and slow to change. The opportunities have been missed because it is sometimes hard to see the forest from the trees.
We hear about these great new technologies, about “big data” and how social platforms can predict what we want for breakfast, but we can’t seem to find solutions that have real business benefits.
This is an impediment both to our revenue growth and our efficiency as businesses. Without real insights into our customers’ needs, we end up spending unnecessary dollars trying to meet needs that don’t exist. It is also more than just having insights; it is about using those insights at the point where they can be acted upon by someone. Too often the issue with data is not about getting the insight but using it!
If our industry doesn’t mature in its use of data, we risk getting disrupted by those who know our customers better and can effectively meet their needs. Even worse, we risk becoming a supplier cog in a customer ecosystem run by others — where we are a commodity item that can be switched out.
And this is already happening. Mortgage brokers are one example where using data in customer service is helping get more customers, as are agent ranking sites such as OpenAgent with agents. On the CoreLogic systems, over 50 per cent of all Australian properties are on at least one mortgage broker’s watch list, allowing them to contact home owners proactively when they list or sell. Some advanced agents are also using “propensity models” that predict who will list their property to get listings, using data that includes if their shopping behaviours have changed (indicating a teenager has moved out of the home or that they are renovating because they are buying more at hardware stores!).
This is still lightweight when compared with just how much Google and Facebook, in particular, know about Australian consumers, but more importantly how they can execute on that knowledge with increasingly targeted adverts.
The next disruption in data will come from “data-driven workflows” where all aspects of service to a customer are driven from data about them and their needs. Marketing automation systems are already doing this with re-targeting and message shifting depending on how customers respond to adverts. CRMs like Salesforce and Microsoft Dynamics are integrating to data and analytics through “APIs” and allowing for advanced customer workflows to be constructed using data to trigger and filter actions. And most relevant to our industry, US-based fintech SoFi may be coming to Australia as a mortgage provider, using data and a customer focus on High Earnings Not Rich Yet borrowers from good universities, and the SoFi model may pick the most profitable future customers away from our traditional lending institutions.
Then there are even more digital players entering our industry or changing their existing business models to provide digital mortgages, digital sales and rental processes and even automating title transfer, from Airbnb to Pexa. These players are capturing far more data than our traditional players. They are also “digital natives” and have built businesses from the ground up where data is part of their DNA.
The lesson for our industry? Make sure you are collecting all the data you can about your customers and their behaviours. Make sure you can store and link it to internal and external data to create insights. And most importantly, know how you can use those insights to get better at service and at proactively meeting your customers’ needs.
If you aren’t, someone else will.