By Andrew Patterson
Real estate is rarely out of the news these days.
Commentary about property prices, the potential for interest rate hikes, the impact of loan to value ratios, QV reports and a host of other data on property values regularly fills hundreds of newspaper column centimetres and plenty of hours of airtime in the electronic media.
It seems that right now everyone is over dosing on property.
But it’s the dramatic changes that have occurred to the process of actually selling a property which has almost turned it into a form of event management in its own right that is generally much less talked about.
Marketing properties using a range of integrated new technologies is the new weapon of choice for commission hungry real estate agents.
From humble beginnings to market leader
High profile Auckland real estate company Barfoot & Thompson have long been the dominant player in the country’s largest and most profitable property market.
Founded in 1923, Val Barfoot paid £75 to aquire a tiny, run-down Newmarket land agency and a year later was joined by his older brother Kelland. Then in 1934, the Barfoot brothers were joined by Maurice Thompson leading to the business eventually becoming known by its present name "Barfoot & Thompson.”
Today it boasts a staff of more than 2,000, including 1,400 commission sales agents, a total of 69 branches in Auckland and Northland and remains in private ownership with three of the grandchildren of the original founders now directors.
Marketing Manager Jennifer Lucie-Smith says the process of selling a property these days is barely recognisable from those early days.
“Over the years marketing a property, which really is fundamental to our business, has changed dramatically. Back in 1923, when the business was first started, there were no open homes, there weren’t even 'For Sale' signs back then and there was obviously no online ads. So things have changed completely and our brand has had to develop and evolve over the years to reflect those changes.
“Fundamentally our business is all about people. It's about building relationships with people. For most people selling their home involves selling the biggest asset that they will ever own. So they want to eyeball people involved in that process and build a relationship with that person and that's really where our brand is built everyday with our sales people meeting people and selling homes.
“What we do for the brand outside of that is really just to support what is obviously the most important aspect of our business which is all about building relationships.”
Barfoot and Thompson remains a non-franchised company. All of its branches are owned by the company and its sales people are independent contractors and work on commission.
A marriage between IT and marketing
The rapid growth in internet technology and the proliferation of new sales and marketing channels has led the company to take an innovative approach to the way it manages its marketing and IT interface.
Lucie-Smith says part of that change has involved bringing the marketing and IT functions closer and physically co-locating them together.
“In recent years the pace and changes in the marketing function and its move much closer to IT has really accelerated. So just a few years ago we only talked in terms of radio, print and television advertising as the main marketing channels for property.
“But the channels to market now for us are so much broader than that; and increasingly we’re becoming ever more reliant on IT. For the last four or five years we have been very focussed on understanding the environment and also understanding where our customers are located and what their needs are within the technical space. We’ve worked really hard to build the bridge with the technical guys and understand the IT implications for the marketing campaigns that we are delivering every day.”
It was a change of location when Barfoot & Thompson moved to its new head office in Auckland’s Shortland Street in 2012 that led to the new collaborative approach being adopted.
“Previously, in our old building, our IT division were on the 6th floor of our building and marketing was on the 4th floor so there was a lot of running up and down stairs all day. Our website, as in most businesses, is the place where the marketing and IT teams are straddled. And so working with the web team and really starting to understand the technical complexities of that process we were running up down those stairs more and more.
“So when we had the opportunity to move to Shortland Street and move in to this new building we lobbied quite hard for IT and marketing to be on the same floor. Now we’re effectively neighbours which has enabled us to communicate significantly more often and obviously a lot more easily. We see each other all the time. Our CIO and I are able to have daily conversations about the projects that we are working on together and being in close proximity has certainly helped.”
Collaboration is key
The decision to co-locate both departments was strongly supported by CIO Simon Casey who had worked closely with marketing teams in previous IT roles and it was his support for the idea that eventually allowed the somewhat non-traditional marriage to take place.
However, as anyone who has worked in large corporate organisations knows only too well, marketing and IT departments attract notoriously different personality types that don’t always sit comfortably with one another
“I admit we do have challenging conversations sometimes but at the same time, we’re really focussed on delivering the best value to our customers, whether they are internal customers or external customers. I think whenever we have challenges and difficult conversations we always pull ourselves back to that premise. We regularly ask ourselves questions like why are we doing this and where is the value to the customer. As a result, you have to decide you’re still going to fight for your siloed corner or am I not?
“Over the years that we’ve been building this relationship, we’ve got really good at making our customer the clear focus of those conversations and of the projects that we are delivering. I do think though that there has been a real journey from my teams perspective in terms of understanding IT and understanding the complexities of the things that they have to deal with.”
Like any relationship, gaining an understanding of each other’s perspective as well as maintaining an open dialogue is key to making it work.
“Importantly, we’ve come to realise that if we deliver a campaign and we have spent months thinking about it and developing it and it hits the paper and it's a complete flop, we can just pull the ads and we don't have to run them anymore and we can lick our wounds and move on. But with IT the planning and the thinking around all of the detail and the specifics are hugely important. Often it will take six months to build, generally they’ll be significant costs involved, and once it’s in place the expectation is that it will last two or three years so you definitely want to avoid having a flop.
“So we work hard to understand the technical complexities of the things that we are asking our IT team to deliver and they have worked really hard to understand our need for change and flexibility and also understanding our way of working in our language.”
Meeting in the middle
So has this collaborative approach improved the execution of projects?
“What we’ve found is that with new development pathways as well as a more agile approach, IT development has moved closer to how we would like to do things from a marketing perspective. So it has made it easier for us to have the right conversations and probably to deliver the right tools rather than simply speeding everything up. So not only has our productivity improved but so has the quality of our output.”
Lucie- Smith says that when it comes to innovating ideas, both sides are involved in developing that part of the process.
“Generally our approach with IT is we start off by saying: we've got this campaign where we want to reach out to our customers in this way. How do you do that? How do you deliver? In the end so much of our marketing strategy is reliant on IT delivery. Even something as simple as a campaign where you want to deliver display ads on a website, you know you have to have content for it to click through to. The analytics have got to be set up correctly so that you can measure the kind of impact you are getting.”
The competitive nature of real estate ensures that service standards are kept elevated but differentiation can be difficult when all providers are essentially offering the same services so delivering value becomes equally important.
“Obviously we have to have the platforms that will market properties to the greatest number of people that we possibly can both in New Zealand and overseas. Clearly everyone in the business is focused on that objective. Where I think that we are different, and are able to innovate, is that we have a very good understanding in our business at the highest level that IT and the services that we provide internally to our sales people as customers, but also externally to our clients, can be a real competitive advantage for us. We have a big IT team, and growing one, and a real focus on making sure that we are delivering tools that make the lives of our customers easier.”
For the business as a whole the collaborative approach is already delivering results.
“The joint ownership of the online strategy has been a real win for us. We worked collaboratively with the teams to really get that right and incorporate it into not only a strong marketing focus, but a really solid platform and the basis of IT as well. So I feel really proud of that document and proud of where it is taking us.”
“In terms of achieving growth in market share, the key thing is just continuing to understand the nature and needs of a changing customer base. We know our customers are more online than ever before and the online environment is changing all the time. And the places they're going online are changing. And the things that they need, and the way they want to interact are also changing along with the amount of information and the type of information that they’re wanting.
“So it's about us understanding as much about that whole process as possible and finding ways to deliver information to them that is going to be of value and by doing that we continue to be seen as the real experts in property in Auckland.”
As customers become ever more demanding and expectations continue to rise so the process of providing timely information and relevant data also grows.
Lucie-Smith says that keeping up with those demands and meeting customer expectations is what drives those working behind the scenes.
“Because it’s one of the biggest financial decisions most people will make, they are really looking for a lot of reassurance in terms of the decision that they’re making. They have expectations in terms of data, understanding what their property is worth, comparative sales, market trends and understanding how their area is different to the one down the road. Also, they want to know if they change a particular aspect of their house is it going to have a positive or negative impact.
“Because people are generally not in the market that often each time it can be a new experience and they need to understand the market afresh. And so it is making sure that we have that information available to them in a easy to digest way that is going to add some value to their journey, but make it easier for them. And also show that we're the people that know how to do all of this and have the services to help them through that process.”
Social media strategy
Use of social media channels tends to happen at an agent level more so than a corporate level reflecting the personal nature of the client relationship.
“The very nature of the online and social environment these days means that all brands in all companies are more exposed than ever and we certainly take our responsibilities in that area seriously. Our sales people are more and more tapping in to those kinds of social channels to build a base of people who know them and who understand the value of the work that they do and will support them, or recommend them. So word of mouth is absolutely critical in our business.
“While we do have a corporate position in the social media space, really the value for our business in those kinds of spaces is an online expression of your offline relationships. People generally don't have a relationship with the Barfoot and Thompson brand. The major relationship they have when they interact with us is with the agent selling their home so it makes sense that it’s that person who is responsible for managing that relationship.”
For those considering replicating Barefoot & Thompson’s approach marrying up IT and marketing Lucie Smith says it’s about taking the first step.
“Whether it is the marketing person that makes the first move or the IT person it’s really all about starting a conversation. And when we started the conversation, it just so happened that we managed to keep talking for quite a few years.
For us, it’s been a really amazing journey. It has been challenging at times, but I think that if I go back to what I said about really putting the customer at the centre of everything that we do, whether it is the internal customer or the external customer, then we can take our marketing and IT hats off and really look to focus on delivering value to the business as a whole through that collaboration. However, what makes it work is both departments making the effort to understand both the language and the work practices of the other, but also letting go of your own jargon as well.
And it seems once you start the process there’s no going back.
“I doubt that we would be able to deliver the marketing output that we need to if we weren’t operating the way we are today. The results speak for themselves.”
|Sector:||Real Estate / Property|
|Staff:||2000 (1400 commission agents)|
|Ownership:||Private (Barfoot & Thompson families)|
|Markets:||Auckland & Northland|
|Recent highlights:||Founders inducted into the NZ Business Hall of Fame in 2013|
|Auckland house price history:||http://www.barfoot.co.nz/About-Us/Stories/Our-History.aspx|