With Google, Yahoo and MSN looming large on the real estate classifieds market it is time for some less than creative thinking from the real estate portals. The gist? Sign up for a multi year subscription now and we will cut our annual price hike by such and such %. In the past these price hikes have been in the range of 7-9% (ouch) but with multi year deals you could get that down to 5 or maybe 6% (ouch again).
So get set for a new spin on pricing as the major portals try to sign up agents on multi-year deals and lock them in for the long term. So what are you going to do? My opinion is that if you strike a multi year deal then you are surely going to cost yourself money. As none of the major portals to my knowledge publish actual pricing it makes it very hard to tie the % increase to published prices. This is because no one agency is treated the same and sales people have a limited range to get your signature on that piece of well crafted paper.
Think first
If Google do launch here in Australia then it will certainly lower prices as I am sure whatever they do will have an impact on the major portals. Another tip, just do not accept a price rise, ask for something extra in return, or ask for a discount. You may also want to think about your online strategy so take a few weeks to think about it and then make a decision. There are many options out there now although Domain.com.au and Realestate.com.au are the obvious first choices. All you need to do is make sure that your representative does not think as he/she calls you that it is a done deal year in and year out.
Better still
If you are one of the smarter operations then call a meeting of all of your local agents and create your own strategies going forward. This can include print and online advertising. Just because you compete vigorously does not mean you can meet once a quarter to discuss the markets.
Would you sign on a multi year deal?
7 Comments
snoop
I reckon REA and Domain will surive google and google wont want to take share from them ,more work with them.
Google just want to be the aggregator,will agents list directly into google maybe,but I think the portals if they are smart will do this for them.
Peter Ricci
Snoop, maybe Google will not initially have an impact, but locally they may work with Domain and REA but globally they will not.
Google globally will build and deploy whatever suits them and losing a few million dollars a year from the major portals in advertising will not effect them at all when you look at the larger play. REA, Domain and MyHome will continue to advertise with them even if Google Yahoo and MSN compete because they get a great deal of visitors from their websites.
As for REA and Domain sending listings on behalf of agents to Google Base I think it may happen but they will have to seek permission from agents to do this individually, as agents may want to do this themselves so their own website gets the visitors, otherwise we may have 2,3,4 or 5 of the same listings on Google Base and this is not in the interests of consumers.
I would prefer to see agents sending the data themselves through products like HubOnline, MyDesktop and Portplus (as well as my own company)
snoop
Pete isnt that the same thing??
Hublonine is REA
mydesktop is Domain
Peter Ricci
Snoop not really not all Domain agents use MyDesktop (only a fraction) and about 10% use HubOnline that advertise on these sites.
Dave Platter
Peter, your item about price rises reminds me of a story that I hope you’ll let me share.
I used to go to a diner on West 14th Street in Manhattan, near Union Square. The owner, Bill, cooked all the food and I loved his good, cheap eats.
Well, one day I got my plate of pancakes and there were four on the stack instead of two. That was a pleasant surprise.
When the check came, I noticed that Bill had charged me a bit more than normal. I asked him about it and he told me something that I think will resonate with you, too:
“I’ve decided to give people lots more food but only charge them about 10% more. That way we both work out ahead.”
Needless to say I went back to that diner whenever I could until Bill sold the property to a real estate developer and made a fortune.
realestate.com.au works on the same principle. From January 2006 to January 2007 we boosted the number of email leads provided to real estate agents from 410,000 to 580,000. That means if you got 10 email leads a month last year, you are getting 14 a month this year on average (if my math is right).
It’s about a 40% gain in total leads. (We probably boosted OFI walk-ins and telephone leads to agents a similar amount)
Just like at Bill’s diner, you pay a little more but get a lot more of what you’re buying.
We’re really proud of the value we offer to agents. I personally don’t believe any other website or newspaper or magazine or TV show is as effective an investment in building a real estate business.
Thanks, Peter.
Paul Kravyen
Nice reply Dave it does sound good that way doesn’t it. I’m against signing up for anything for extended periods of time but would consider reaestate.com.au if the terms were reasonable.
Personally I wish realestate.com.au would do away with subscriptions and go to a per listing basis, makes the accounting simpler 🙂
snoop
Paul
is that so you can pass more marketing cost to the consumer??