I have always been a student of the game. Whether the game was football in college, tactics in the Army, or digital marketing in business, I have always wanted to gain any advantage that I could by being better armed, better trained and better informed than my competition.
I like to pay attention to trends both in and outside of my industry. One pattern has held my attention now for over 20 years, and I first observed its impact on the stock brokerage industry. The internet is changing the relationship between business and its customer by morphing the sales process; delivering new tools that empower the consumer to make an informed buying decision with little or no assistance from a salesperson.
Stock Market Warning
Though I am no expert on the stock market, my awareness as a consumer first, then as a business student second, saw the profound impact the internet had on this very old industry. First, there was Etrade, founded in 1991, and it quickly became the fastest growing company in the US. I have read that the percentage of Americans participating in the stock market increased from 5 percent to 20 percent as online trading became something families could do for themselves at home.1
As other brokerages moved to online trading, the demise of the traditional stockbroker (salesperson) became apparent. I noticed many of my friends that were stockbrokers were moving to new industries, seemingly replaced by the consumers’ desire to be more involved in the research stage (and the lower fee structures offered by online traders).
In the past, the salespeople in any given industry were the gatekeepers of the knowledge that a buyer needed to properly make a purchase decision. If you wanted to buy something, you did your research through a salesperson. If you were fortunate enough to find the best salesperson, you received great information, great guidance and you made a successful purchase decision. But, if you received less than the best, you were rewarded with less than the best in your purchase conclusion.
Digital marketing and the internet have provided a mechanism today for shoppers to perform “information gathering” without having to interact with a salesperson. Unsurprisingly, they have flocked to the idea of doing their own homework.
How Digital Marketing Has Impacted Me
I have experienced this myself both as a consumer, as well as being a small business owner. In real estate brokerage, even in the mid-1990s, home buyers could not gain access to all of the listings of homes for sale without working with a real estate agent. We were the gatekeepers of the inventory, and we held those keys through the use of the Multiple Listing Service. Officially, the MLS is a tool for real estate brokers that is used to share information and to make private offers of cooperation and compensation. It’s also the way brokers announce to the world that a home is for sale. Without MLS access, consumers would have to rely on yard signs, newspapers and magazines to get a glimpse of less than one half the inventory.
The internet has impacted real estate brokerage in many ways, but easily the greatest change was seen when the MLS moved from monthly printed paper books to a digital feed that real estate companies could use to promote all listings online. I launched my primary website in 1995, and right away, buyers in my market area could see all homes for sale in our market area.
Are You Losing Control Too?
The MLS rules changed over time to where it was not just Realtors who could promote listed properties; in fact, we saw our feed utilized by newspapers, magazines (moving online) and new digital marketing competitors. By 2000, it was becoming clear that Realtors were no longer the gatekeepers of the information, so we had to redefine our value proposition. While this created chaos and a large turn-over in our industry, it also created an opportunity for those of us who embraced the changes and searched for a modern way to effectively broker the sale of homes. I decided to go back to school, earn my Masters Degree with the goal of rebuilding my operation in a manner that would take advantage of the changes that digital marketing was bringing.
The expansion of the housing market from 2002 through 2005 brought so much activity to my brokerage that I postponed my efforts to grow and thrive through digital marketing. Sure, I now had an enhanced education and well-founded ideas on a new business model, and I knew a lot more about marketing, but the housing market was so good that it did not seem to matter. Sales were abundant and life was good. As they say, all good things must come to an end, and by 2006 it was very apparent that the housing market bubble had burst and things were going to get tougher. And, tougher it was.
By 2007, due to declining sales, I decided to renew my pursuit of a new business model, and this is when I actively became a student of digital marketingg. Later, I will address the trials and tribulations I encountered during my digital learning curve.
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