Are you ready for 2020?

ARE YOU READY FOR

2020?

A THOUGHT LEADERSHIP DISCUSSION ON FUTURE BUSINESS MODELS IN THE REAL ESTATE INDUSTRY | OCTOBER 2015

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 1

SUBSCRIBE eliteagent.com.au eliteagent.tv SAMANTHA MCLEAN – Managing Editor samantha@eliteagent.com.au MARK EDWARDS – Commercial Director mark@eliteagent.com.au JILL BONIFACE – Sub-Editor editor@eliteagent.com.au TARA TYRRELL – Feature Writer HERMANSYAH ASRORI – Web Master newsroom@eliteagent.com.au CHORUS DESIGN – Art Direction/Design thegoodpeople@chorusdesign.com INDUSTRIE MEDIA - Feature Photography and Video industriemedia.tv

ELITEAGENT.COM.AU • GET READY FOR 2020

eliteagent.com.au/shopnow (02) 8231 6669 subscriptions@eliteagent.com.au

We would like to thank the following companies for their assistance in providing support for this special report

CONNECT WITH US @eliteagentmag

BASS Publications Pty Ltd ACN 169 805 921

Postal Address: Suite 35, 4 Young Street, Neutral Bay NSW 2089 Telephone (02) 8231 6669 Registered by Australia Post/Print Post 100020180

For their participation and expertise, thank you to PwC Telstra Inspiring Rare Birds Zeus Unwired

© Elite Agent Magazine 2015. All rights reserved. No part of this document may be reproduced in whole or in part without the express permission of the publisher.

OCTOBER 2015 • 2

Contents

ELITEAGENT.COM.AU • GET READY FOR 2020

FROM THE EDITOR

4

KEY TAKEAWAYS

6

INTRODUCING OUR PANEL

7

1. THE TECHNOLOGY GAP THAT IMPACTS PRODUCTIVITY

9

2. WILL REAL ESTATE CAREERS BE DISRUPTED BY TECHNOLOGY?

13

3. ARE REVENUE MODELS LIKELY TO CHANGE?

19

4. BIG DATA IS THE NEW CURRENCY

24

5. HOW THE ‘INTERNET OF THINGS’ WILL CREATE NEW OPPORTUNITY

28

6. RECRUITMENT AND RETENTION MUST EVOLVE

32

7. ARE YOU READY FOR 2020... AND BEYOND?

35

OCTOBER 2015 • 3

From the Editor

where the issues may be for small businesses and the real estate industry in the next five to 10 years.

OUR PANEL OBJECTIVES 1. To develop a thought leadership piece based on where technology and innovation may lead the real estate industry in the future 2. Articulate what is on the horizon from a technology/business point of view 3. Suggest possible sources of disruption, both technological and otherwise 4. Suggest what real estate agents need to do to operate at their full potential moving forward 5. Suggest what business owners/industry participants should be thinking about now to future-proof their businesses 6. Suggest ways that suppliers can better support the industry 7. Suggest ways of building value for other stakeholders, such as employees and new entrants into the industry.

ELITEAGENT.COM.AU • GET READY FOR 2020

DISRUPTION AND DISINTERMEDIATION of the real

estate industry has been a big topic of late, both in industry circles and the mainstream media. Given the forces at play right now which make technological change inevitable, some people believe the industry may be in for a complete overhaul (think Uber and the taxi industry); some believe that jobs and the role played by real estate agents will change completely.

Realising the disruptive impact technology has had on many industries both here and overseas, Elite Agent Magazine gathered together some experts both in and outside real estate to attempt to answer the challenging questions facing the industry with respect to productivity, technology and

We all know there are players right now who would like to claim the title of the ‘Uber of Real Estate’ and while it’s a good buzz-phrase, there is a lot more to Uber than simple tech disruption. Uber is a service disruptor; the taxi industry may not have the current problem they have right now if they were completely focused on innovating for the customer. I think you can draw a parallel to that in real estate or any other industry.

I also think that in recent times that the word disruption is used way too negatively, whether it’s just scare tactics for others gain from, or just fear of the unknown, I don’t believe that what is happening globally with technology is a bad thing. Yes, there are jobs that will change. But there is a great deal to gain: PwC have found in their recent study (in conjunction with Google)1 that there are benefits of Internet and mobile technology for all Australian sectors. In the real estate and rental sector they have found that there could be as much 1 http://www.digitalinnovation.pwc.com.au/smallbusiness-digital-growth/

as a $2 billion boost to the economy over the next 10 years. To me, that presents a massive opportunity to embrace technology, think outside the box and innovate like crazy!

We chose our panel for their diverse expertise; in business, future technologies, digital marketing, consulting and economics, venture capital and entrepreneurship.

Having this wide knowledge and expertise allowed us to leave ‘no stone unturned’ and I have to say it was one of the most interesting discussions I have been involved in for a long time.

From the topics discussed, it was generally agreed that there are a number of things to be looked at including strategy, recruitment, revenue models, supplier sourcing and types of customer service.

Industry professionals should be thinking about these right now to remain relevant – and successful – in the future.

Whether you agree or disagree with the topics and ideas raised is entirely up to you. But I do hope this provides you with some good ideas to take your business forward into the future.

Samantha McLean EDITOR Elite Agent magazine OCTOBER 2015 • 4

The Rental, Hiring and Real Estate Services industry includes approximately 1:

31,700 small businesses

$4.9 billion current private sector output (2014, base year)

$2.0 billion potential boost to the economy over the next 10 years

1 http://www.digitalinnovation.pwc.com.au/small-business-digital-growth/

ELITEAGENT.COM.AU • GET READY FOR 2020

“Rental, Hiring and Real Estate Services industry’s small businesses can unlock an additional $2,052 million of private sector output over the next ten years from better use of internet and mobile technology; approximately $64,642 per small business1.”

OCTOBER 2015 • 5

Key Takeaways 1. Types of jobs required by the property industry will change as small business adapts to meet current and ongoing productivity and technology challenges.

Using technology effectively has the potential to boost the economy by $2.0 billion over the next 10 years1 2. Disruption will be more likely to come from outside the industry, with a different revenue model that includes selling or providing horizontal and vertical adjacencies 3. Disruption could also be ‘born’ out of the need for increased urbanisation (apartment dwellings) due to the desire to remain close to major town centres to take advantage of modern services (eg share cars, food delivery, concierge services etc). Crowd funding real estate developments may add to this disruption 4. The panel felt that any ultimate disruption did not include the current ‘self-titled’ disruptors who either provide a similar service in a different pricing model, or a technology that does not take into account legal or regulatory aspects of the property market in Australia

is and how well you are able to ‘mine’ this data and create opportunity could mean success or failure.

6. Niches and knowing who your ‘tribe’ really is will be crucial. You won’t be able to speak to all future customers in the same ‘voice’ but will need to adapt your approach. Challenge yourself to see how you can create horizontal and vertical adjacencies in the services you provide to this ‘tribe’ 7. The recruitment challenge and attracting people to the industry should be resolved through providing strong leadership and a clear and ethical sense of purpose, as well as truly meaningful work 8. The ‘Internet of Things’ could be a catalyst for a different type of disruption, requiring agents to reskill and adopt new technology

“In recent times that the word disruption has been used way too negatively, whether it’s just scare tactics for others gain from, or just fear of the unknown, I don’t believe that what is happening globally with technology is a bad thing. Yes, there are jobs that will change. But there is a great deal to gain.”

9. Technology strategy and business strategy can no longer be thought about as different things. They will be one and the same 10. Be curious and don’t be afraid to try new things. It is this kind of innovative thinking and experimentation that will help take your business forward.

5. Following on from that it seems likely that ‘big data’ and therefore your data and your CRM system hold the keys to your future success; how good your data

1 http://www.digitalinnovation.pwc.com.au/small-business-digital-growth/

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 6

Introducing our Panel

JEREMY THORPE

JO BURSTON

ROB MARSTON

Jeremy is a Partner in PwC’s national Economics & Policy Consulting team. With a career spanning over two decades, Jeremy’s core area of expertise lies in the design and evaluation of regulatory schemes and government programs. His specialist knowledge includes complex impact assessments and he regularly contributes to various socio-economic impact analysis studies.

He was recently part of a study where PwC and Google partnered to present findings on small-to-medium businesses’ digital trends.

Jo is a member of the global Entrepreneurs’ Organisation, which represents 10,000 entrepreneurs in 50 countries, and is a serial entrepreneur herself.

Already a founder of several businesses including the technology-led highly successful services firm Job Capital, she jumped at the chance to spend time being mentored by Sir Richard Branson. This led her into her current project, ‘Inspiring Rare Birds,’ a movement that aims to be the largest global database and connector of women entrepreneurs in the world. Jo quotes, “When I hit a wall, there are only four options – Go over it, go round it, bury under it or smash straight through it.”

Rob is one of Australia’s most eminent thought-leaders in the mobile advertising space.

A true digital native, Marston taught MBA students about the ‘Information Superhighway’ back in 1996 at Durham University Business School. He now owns and runs his own boutique mobile marketing agency, Zeus Unwired, focusing on connecting clients with their audience on unwired devices (tablets and smartphones). He has worked with some of the biggest household brands and is a lecturer at UTS, RMIT and the University of Sydney, as well as speaking at events around Australia and Asia on digital and mobile marketing.

ELITEAGENT.COM.AU • GET READY FOR 2020

MICHAEL OSSIPOFF Michael is Telstra’s Director of Capability and Innovation, or in short ‘Chief Futurist’.

His operating unit is tasked with taking the entire Telstra product and service portfolio, explaining and interpreting the implications of new technology trends and developments so that customers can best prepare themselves to take advantage of emerging opportunities. Michael’s perspectives and experience come from both a major corporate and start-up company basis, mixed with his sales and marketing background.

MARK COHEN Mark is a digital media industry professional, having gained most of his experience within well-known digital media and e-commerce businesses. Currently, as Chief Technical Officer for Domain Group, he works with the technical leadership in a group role with involvement in various businesses.

Mark is also focused on mobile adoption and driving innovation across the broader business.

SAMANTHA MCLEAN (Panel Facilitator) A sales and marketing professional with 20 years’ experience, Samantha has lived and breathed the real estate industry for the past ten years in various roles.

Samantha has also worked for blue chip corporates such as British Telecom, Optus, PwC and Cisco and is currently owner and managing editor of Elite Agent Magazine.

OCTOBER 2015 • 7

1

THE SMALL BUSINESS KNOWLEDGE GAP THAT IMPACTS PRODUCTIVITY

“Small businesses could unlock an additional $49.2 billion of private sector output over the next ten years by making better use of technology”

1. The technology gap that impacts productivity KEY TAKEAWAYS 1. Better use of technology would mean productivity gains for all small business, not just the real estate industry 2. In the future, getting your strategy right will be more important than actual execution. Don’t execute the wrong strategy!

3. Technology needs to become part and parcel of everything you do. Technology Strategy = Business Strategy 4. Instead of using capital for procurement look for ‘as a service’. This means you can procure big company services usually at a budget you can afford 5. If you don’t know what’s ‘out there’ get curious and research or lean on others.

Don’t be afraid to try new things.

ELITEAGENT.COM.AU • GET READY FOR 2020

PWC AND GOOGLE RECENTLY partnered to study digital trends in all small-to-medium businesses. In this study, they discovered a whole range of future challenges for Australia’s workforce, identifying a productivity/efficiency gap right now which is not going to fix itself.

Powered by PwC’s Geospatial Economic Model (GEM), the analysis shows that small businesses could unlock an additional $49.2 billion of private sector output over the next ten years by making better use of technology.

It is the skills shortfall that is the issue.

LACKING THE NECESSARY SKILLS “Small business often lacks the numbers to have good technical skills. Even understanding what the technological challenges are for some small businesses is a problem, because sometimes it’s hard to know what are the questions to ask. Then putting ‘Frank’ in the corner in charge of IT doesn’t necessarily deliver leadingedge practice in a disruptive industry. We need to see a general up-skilling in every small business-oriented industry,” says Thorpe.

Ossipoff agrees. “The big thing I’ve picked up is that there’s been a change between getting the strategy right and execution. Once upon a time you could actually get your execution perfect and it would make up for the fact your strategy wasn’t absolutely spot on, whereas today if you don’t get your strategy absolutely perfect you’ve had it! You can be the greatest DVD shop in the country, but unfortunately that market has disappeared.

The strategy is wrong although the execution could be perfect. Today that is different.

BUSINESS STRATEGY MUST EQUAL TECHNOLOGY STRATEGY “The other thing is that business strategy and technology strategy used to be separate. Without any question, today they’re one and the same. Today you can’t run a business, any business, without technology. This is not a sidebar activity. It’s not a necessary evil. It has to become absolutely part and parcel of everything you do.”

But the good news for small business is that the trend towards consuming things ‘as a service’ has made it

OCTOBER 2015 • 9

“We think that puts a lot more weight back on industry associations and trusted advisors to help agents or small businesses ask the right questions to get to the right answers.”

easier to compete with big business, being able to source the equivalent equipment without requiring massive capital outlay. “In the past, the biggest technical challenge [for small business] was which photocopier I was going to buy”, says Thorpe.

Ossipoff agrees. “But the whole point is you don’t have to buy a photocopier any more. You just take it as a service.

For many people, it’s still a very different concept.”

If it is a skills shortage that small business in general is facing, one of the bigger challenges will be how to find the answers to questions that most don’t know how or what to ask.

Says Thorpe, “We think that puts a lot more weight back on industry associations and trusted advisors to help agents or small businesses ask the right questions to get to the right answers. So it might be your accountant. It might be your lawyer. It might be your trade magazines, like Elite Agent. It might be people who are thinking about their organisation from the outside with a deep understanding of where the sector is going.”

YOU NEED TO BE CURIOUS Burston is of a different opinion, with a view that you need to be more self-reliant, have the courage to try things yourself and fail fast and fail often. “I think it’s the sense of curiosity that needs to be embraced, particularly with technology. What is available globally is astounding. It’s never been cheaper, it’s never been faster, it’s never been more accessible and it’s never been easier to learn.

“I think relying only on outside stakeholders or influencers to put that into your business or show you how it works is not enough – you have to have an ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 10

insatiable appetite for curiosity. You have to have the courage to ask the right questions, try something and see what happens and if it works then you do it. If you do it and it works, then you measure it and reflect on it. If you reflect on it, and the numbers are moving or the dial is moving in your business, great, keep going.

It seems so simple because it is really simple. For small business owners, you don’t need to have these people inside your business and everyone telling you what you should do. You must have this sense of curiosity because it’s unlikely anything will break or burn, particularly from a cash perspective, in your business. If you go through that simple cycle of ask, try, do, reflect, repeat, and do that every day, it becomes a habit.”

BRING THE TEAM WITH YOU The other technology issue in the real estate industry that is noted by the panel is that, like any small business, problems can occur where implementations of various systems have not had the buy-in from the whole team.

Cohen agrees with Burston that mentality has to change, “I think Jo’s point about having an open mind really falls into that. You do need that curiosity and an open mind to take on technical things. The challenge is when you embrace a new technology as a hygiene factor; it often doesn’t succeed. If you want to keep your business growing and moving, you and your team have

to have an open mind. You have to implement and have the tenacity to follow up and to push ahead with it.”

But he also somewhat agrees with Thorpe on the subject of having a mentor to help you along your way.

“Dwight Eisenhower said, ‘Planning is indispensable, but plans are worthless.’ I think as a small business you need to have an advisor or mentor to provide you with that strategic guidance, and not just as a one-off but on a continual basis.”

DIGITAL BUSINESS STRATEGIES While 95 per cent of SMEs reported that they were online, only 19 per cent of those reported that they had some form of strategy for their business’ digital activities, which was unchanged in the past year. However, most SMEs that did have a digital business strategy had a fairly comprehensive strategy compared to previous years, with most including Internet, website, social and mobile components.

Sensis e-Business Report 2014

“Dwight Eisenhower said, ‘Planning is indispensable, but plans are worthless.’ I think as a small business you need to have an advisor or mentor to provide you with that strategic guidance, and not just as a one-off but on a continual basis.”

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 11

2

WILL REAL ESTATE CAREERS BE DISRUPTED

BY TECHNOLOGY?

“What I suspect you’re going to see are more services being integrated. The process of buying a home will not be just buying a home; it’s going to be a whole range of other things connected to it.”

2. Will real estate careers be disrupted by technology?

ANOTHER STUDY COMPLETED BY Thorpe’s team

KEY TAKEAWAYS 1. 82 per cent of real estate industry jobs are at risk of a digital disruption by 2035.

2. Where value is eroded through free information there must be a replacement 3. There is no reason that you can’t innovate from within and disrupt your competition now by getting ready for the future.

within PwC reflects the situation that affects many Australian industries and that is that jobs are at risk of digital disruption, not just in real estate but right across the board.

Says Thorpe, “We used an Oxford methodology to analyse the next 20 years and what’s going to happen to our workforce [in Australia]. We found that 44.1 per cent of Australian jobs are at risk of digital disruption by 2035. And for the real estate industry it’s really high – 82 per cent.1 That doesn’t mean we’re not going to have a lot of real estate agents, but the fundamental skill-set we feel will move to either a more personalised service or be more technology-enabled.”

product in itself. Keep an open, agile mind and keep an eye on what’s emerging within your ecosystem.”

IS THERE AN ‘UBER’ ALREADY IN THE HOUSE? SQFT and Opendoor are examples of would-be ‘disintermediators’ in the form of apps that have sprung up in the United States. SQFT is an app that allows you to upload your property listing to various portals in the US and then accept or reject electronic offers online.

Regulatory and legal issues would probably prevent

“In terms of emerging technology,” says Cohen, “I think the big threat is the erosion of the value the business can add to consumers. Over time it slowly gets chipped away.

Eventually you wonder what took your market away – was it free data, consumer data, automation or the ecoadvancing systems that are emerging? The question to ask is how are you going to embrace those and continue to add value to a customer? Don’t define yourself as a

1 PwC, Future-proofing Australia’s workforce by growing skills in science, technology, engineering and maths (STEM) April 2015

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 13

SQFT from operating in Australia the same way it does in the US, and there is still a real estate agent who manages the transaction through the process.

Opendoor (who recently raised USD 30 million in funding) makes instant offers on houses and then flips them, often renovating them in the process to make a profit, and completes the transaction with a five to six per cent ‘convenience fee’. In the US, tech is still one of the shining stars of the of the economy and therefore it is not hard to find funding if you have the right product.

So the group generally agree that it would be hard to rule out a tech challenger that gets the model right, or perhaps solves a different problem.

Ossipoff is first to comment. “I think there are a few possibilities. Let’s just touch on Uber again for a second.

There’s a lot of grief about Uber in that it’s affecting the taxi marketplace. But if you travel to South Africa, getting in an Uber vehicle is safer than getting in a taxi.

It actually has a very different reason to exist there than it does in Australia. Here it looks like just a disruption type of model.”

DISRUPT YOURSELF “The role of the real estate agent could become much more of a full-service delivery mechanism as opposed to what it is today, a franchised model. It’s doing things differently that makes a difference and improves the process,” says Ossipoff.

“We (Telstra) ask our customers the question, ‘If you were setting up in business again, would you set it up the same way?’ Almost every company says, ‘No, I probably wouldn’t.’ ‘Would you do things differently?’

‘Yes I would.’ Then if yes, we ask them, ‘Are you running at 100 per cent efficiency?’ They always say ‘No’ to that.

ELITEAGENT.COM.AU • GET READY FOR 2020

Australian jobs most at risk from computerisation and technology in the next 20 years Occupation

Probability of being automated

Number of workers affected

Accounting clerks/bookkeepers

97.5%

263,348

Checkout operators/cashiers

96.9%

128,745

General office administration workers

96.1%

284,171

Wood machinists

93.4%

31,081

Financial and insurance administration workers

93.1%

128,425

Farm, forestry and garden workers

92.5%

106,017

Personal assistants and secretaries

92.4%

137,917

Sales administration workers

91.1%

56,964

Keyboard operators

87.1%

59,852

Hospitality administration and support workers

85.5%

248,862

Sales assistants and salespersons

85.2%

698,780

Real estate sales agents

85.2%

70,673

Factory process workers

84.6%

52,631

Fabrication trades workers

84.3%

90,039

Receptionists

83.9%

169,371

Clerical and office support workers

83.8%

114,710

Printing trades workers

82.9%

23,930

Mobile plant operators

82.8%

127,298

Food preparation assistants

82.5%

154,438

Food process workers

82.2%

63,072

Glaziers, plasterers and tilers

81.4%

60,977

Food trades workers

80.7%

173,639

Automobile, bus and rail drivers

80.5%

94,946

Machine operators

80.1%

83,757

Derived from Oxford University study, PwC analysis

OCTOBER 2015 • 14

POSSIBLE JOB TITLES OF THE FUTURE 1. Nostalgists Interior designers who will help the wealthy elderly design spaces that reflect their favourite decades, for example a 1980s living room or a 1950s kitchen 2. Rewilders Undoing the damage that humans have done to the countryside will become important in the future. This may mean tearing down fences or ripping apart roads and replacing them with forests and natural greenery.

3. Property Navigators Giving home-buyers/ sellers better access to the information they need to make decisions. They will have knowledge of the best people for any job in property whether buying, selling or managing 4. Robot counsellors Wealthy people will likely own robots who will act as servants or caregivers. People looking to purchase robots for their homes will work with robot counsellors to determine which model is best suited to the family 5. Media re-mixers Love producing video?

Taking the job of a DJ or a VJ to another level these people will mix various forms of media into one cohesive project. They will likely be freelancers who are able to juggle multiple projects at once Adapted from mashable.com

ELITEAGENT.COM.AU • GET READY FOR 2020

So we ask them what it is that’s preventing them from moving to where they need to be.

WHERE ARE THE REAL PAIN POINTS FOR THE CONSUMER?

“Often, we need to innovate from within; but at other times something is going to happen in the marketplace which is forced upon us. What I suspect you’re going to see are more services being integrated. The process of buying a home will not be just buying a home; it’s going to be a whole range of other things connected to it.

“If you surveyed a number of people who’ve been through that process and asked them what the painpoints were, I’m pretty sure anyone who’s ever bought a property in Australia can tell you: pre-approval, the length of time it takes to exchange contracts, the actual moving process. The smart money would be saying, ‘How do we reduce the timescale, reduce the friction, reduce the pain [of these]?’” says Marston.

“We know that if you go and buy a property, that’s when you’re very likely to change your utilities or bank.

We also know that within the first year you spend about $15,000 on furniture. So who else is interested when someone buys a house? Maybe someone like Westfield.

There’s a linkage there. Then there’s someone who’d maybe help you do the move. Someone who’ll help you get your kids into school.

“Then the question I think everyone has to ask themselves is: If you’re already in that business, if you’re a real estate agent right now, what’s preventing you from doing that yourself? Why don’t you leave your company, come back in again and say, ‘Let’s look at it in a very different set of ways.’ If you’re not always curious about changing and improving you will be, in theory, exposed to someone who’s sitting in a garage and saying, ‘That process doesn’t work as well as I’d like.’ You don’t want to wake up one day saying, ‘What’s happened?’ You want to be making the change happen.”

When it comes to real estate, Ossipoff believes it is determining what the customer will be expecting that is the key. “You need to do something meaningful with that data to get from all these places and then being able to package it up and present it in a helpful, respectful fashion to the customer.”

Burston agrees. “Again, it’s that sense of curiosity to dig, to think about how that process really does work, not from your perspective but from their perspective.

It’s about changing the script in your head. You need to consider what is the journey the customer is going to go on from the time they are pro-actively approached about selling a property by an agent who’s using good analytics and data, to the experience at the end where they’re referring another customer to you. There could be 25 or 105 steps in that, but mapping it out, step by step, with all the variables, will give you an idea of what you are good at and what you need to change.

“Again, it’s that sense of curiosity to dig, to think about how that process really does work, not from your perspective but from their perspective. It’s about changing the script in your head.”

OCTOBER 2015 • 15

“To do that well you have to look at it from the perspective of never having done it before, revisit the entire process, and work out how you fit into that. Don’t take the same mindset and script you already have in your head, or you’ll just end up with the exact same outcome.”

URBANISATION AND THE DESIRE TO CONSUME SERVICES MAY ELIMINATE THE ‘MIDDLE MAN’ “Can I just put it out there,” suggests Thorpe, “That there may actually be a disruptor in having more apartments? There are going to be more new builds in Sydney; growth is geographically constrained, we are going through densification. To me, as an outsider

ELITEAGENT.COM.AU • GET READY FOR 2020

looking into this industry, says there is a chance the people who are constructing these large apartments or new communities will themselves disrupt the industry because they will say, ‘I don’t need an agent’, or ‘I’ll bring that function in this house’.”

Ossipoff agrees, “That whole thing of ‘life cycle management’ will become completely normal inside those type of centres in the future. It means that instead of taking the pure money out of someone leasing the space for a length of time, it will be leasing a set of services over a length of time. So we’ll see lots and lots of that type of participation I’m sure, in residential as well as commercial.”

OCTOBER 2015 • 16

Says Burston, “We’re already seeing this in working spaces globally. You know, there’s some incredible models out of New York and LA that are fabulous. You go in there and they’ve got 5-star dining restaurants, library media rooms, you can cut film there, you can print your own radio program. It’s the mentality of ‘I want everyone to play in my casino. I want you to stay in my casino.’ I can’t see how that wouldn’t then translate into residential living; of course it would, because everyone wins who’s plugging in something to that environment.”

Adds Cohen, “[With this setup] another one of those complementary providers in residential developments like that would be organisations like ‘Go Get’, who could provide share cars in the midst of an apartment-based living environment which services a particular market. I think there’s a lot that’s going to happen around that.”

And then the conversation moves to another possible disruptor which fits into this densification theory: crowd funding. “I forget the name of the site,” says Cohen, “but it’s a kick-starter for property development. That’s interesting as well because the minimum investment to back a development was, I think, $2,500, which was not a lot of money to back a property development.”

Drawing a conclusion from this it may be possible that the group responsible for the funding a development may then take responsibility for listing/selling.

ELITEAGENT.COM.AU • GET READY FOR 2020

NEW TOOLS WILL BE DEVELOPED Marston’s idea is an interesting one: for someone to find or develop a tool that can sit ‘above the process’.

“Think about what the Internet has done to empower individuals and how it’s taken power away from big companies. From a real estate perspective, you can find all sorts of data sources – the best mortgage provider, or what properties are available on the market.

Build something that sits above all of this process – a dashboard, for example, where you can pull and turn levers and get different outcomes. That really empowers the individual to be smarter around what they’re doing.

There’s more personal empowerment right there.”

“To me, as an outsider looking into this industry, says there is a chance the people who are constructing these large apartments or new communities will themselves disrupt the industry because they will say, ‘I don’t need an agent’, or ‘I’ll bring that function in this house’.”

OCTOBER 2015 • 17

3

ARE REVENUE MODELS LIKELY TO CHANGE?

“Could you say to people ‘I’ll sell your property for nothing, but I will refer to a number of people who I think will be valuable in the process of selling your property’? I think that’s very disruptive.”

3. Are revenue models likely to change?

RICHARD BRANSON AND VIRGIN famously revolutionised

KEY TAKEAWAYS 1. Unbundling does not necessarily equal true disruption as the current disruptors are still selling the same process using the same language 2. Who is your customer? Are they “planet story or planet price?” Who do you want to service in the future, and what would the process look like from end to end to deliver a ‘wow’ experience?

3. Look at how you can provide other services to your chosen niche and who you can collaborate with. This may lead to new and different revenue models in the future 4. Above all, lose the “cookie-cutter” approach. You cannot talk to different customer personas in the same language because different customers will value different things 5. Use technology to broaden your appeal where it makes sense based on your market

ELITEAGENT.COM.AU • GET READY FOR 2020

air travel here in Australia by allowing consumers to choose what services they wanted from an airline.

An example of this unbundling or consulting style model comes in a few different flavours that we are seeing right now; for example, Hello Real Estate whose marketing says, “Welcome to the future of real estate. Where your property is sold by the one person looking out for your family’s best interests; you.” This is closely followed by encouraging the seller to “find a mentor” in their area.

Solo Pro, a new entrant based in the US, attempts to do a similar thing: the consumer pays for the services they need or use. Redfin (also US-based but has been around for a bit longer, specialising in representing buyers) don’t charge traditional commission; customers pay what they feel their agent was worth, “based on customer satisfaction”, and offering “smarter technology from listing to close” to support the transaction. There are others in Australia as well, for example onehome.com.au and yourhotproperty.com.au.

DOES UNBUNDLING EQUAL DISRUPTION? To answer the question of whether a consulting model is viable to sell a property, Burston’s opinion is that you can’t disrupt something that is already being disrupted.

“I think consulting itself is being disrupted at the moment. The consumer could pick and pack what they need into a bundle of services versus going through an

end to end process which could still be expensive and end up with no result.”

Notes Burston, “If you are going to go down the path of unbundling you have to not only disrupt what you’ve always said to people and change your language and tone, but [you] also must start to weave in additional services to solve any additional problems.

For example, the house being bought – it’s exchanged, then it might need cleaning. It could be removals.

OCTOBER 2015 • 19

There’s a unique opportunity for small businesses to collaborate in that perspective.

“Secondly to that, looking at the agents and how they’re operating, I believe the disrupter will not be an agent. I think the true disruptors come from outside the industry and see something the agent can’t see.

That means perspective is the name of the game. It’s time to get out, to travel the world, talk to agents and talk to technology and data experts. Find out what the sweet spots are coming up in the future of disruption and focus on those with ask, try, do, reflect, repeat.

Adds Cohen, “Often when you see the emerging disruptive products you can be aware of exactly what’s going on, but standard smart business practice will prohibit you from doing it. In the days of newspapers, it was giving the news away for free on the Internet. The ones who survived are the ones who actually did that. If you pulled in a consultant and they gave you best-practice advice on what they learned, it would be the opposite of what you needed to do to cover an emerging disrupter.”

To be relevant in the next 10 years, Burston’s view is that losing the ‘cookie-cutter’ approach is a must, and that agents need to focus on a particular skill they are known for being ‘absolutely brilliant at’ to take them forward into the future. “If you stick to that…what is the ‘thing’ that I’m going to be known for in my industry? When [someone] asks, ‘Who comes to top of mind in [any] industry?’, a person will come to mind for a reason; a skill that they have and are known for. That’s the skill that the agent in the future needs to have.”

Adds Marston, “I’d also like to add, that you should think about what the internet’s done to empower individuals ELITEAGENT.COM.AU • GET READY FOR 2020

and how it’s taken power away from big bodies.

Buying a car for example. Historically with women, the dealership head would rub his hands, “Oh, here we go.

We can sell her a car based on colour.” Then the woman goes in there. They are now way more informed than the people on the floor.”

‘PLANET STORY’ VS ‘PLANET PRICE’ From Ossipoff’s experience in the telco world, the price of any service is determined by the consumer, particularly when the market is competitive and lucrative, like real estate.

“If someone comes along and says, ‘No longer is [the price to sell your house] two per cent, I’m going to be doing it at 0.5 per cent’, and they’re getting a better result, unfortunately, it’s going to mean the price point for that service is going to go to 0.5 per cent. If I’m getting a home loan, one bank’s offering the home loan set-up fee at $500. Someone else starts doing it for $200. The new price for the home loan set-up fee is $200. The moment that process you’re getting paid for can be improved, changed, disenfranchised in some way, that will be what the new process price will be.”

Ossipoff continues, “What I’ve learned from doing a lot of work in marketing and having met probably every ‘ponytail’ in the country, [is that] consumers only come from one of two places. It’s either ‘Planet Story’ or ‘Planet Price’. If you’re from Planet Story, you’ll buy based on a story and you want the full service. You want to know about the community, you want the school story, you want the flash perhaps and you’ll want all kinds of ‘make me feel good about this house’.

If you’re from Planet Price, you simply want to get the lowest possible price to get access to a service. It OCTOBER 2015 • 20

“Consumers only come from one of two places. It’s either ‘Planet Story’ or ‘Planet Price’. If you’re from Planet Story, you’ll buy based on a story and you want the full service. If you’re from Planet Price, you simply want to get the lowest possible price to get access to a service.”

doesn’t mean someone from Planet Price won’t ever buy something expensive, it just means they’ll do it at the lowest possible price they can get the expensive thing for. It doesn’t get more complicated than that.

“At any stage, [what I] need to work out is what am I going to do to make up my shortfall of funds. It could be services, an ecosystem, and it could be a variety of things whether you actually do them together bundled or unbundled. I agree with Jo on the personas. That will just come down to analytics. What you can do as an agent is use your data. Firstly, to differentiate your product and personalise your offering; you can only personalise your offering if you know something about the customer. That will give you the opportunity to personalise and differentiate.

“And underpinning it all is this huge data lake, so if you know what to ask for, you can pull it out. You won’t build it all yourself; you’ll simply be pulling information from different sources to do this, to suit a particular client, a particular market, a particular segment.”

Burston agrees. “What came to mind for me is the Gen Y/Millennial generation who may not own [a property] ever, and they’re really okay with that,” she says. “This is what is going to occur if you look at the cycle of the next 10 to 15 years. They’re going to work longer; they’re going to spend more money on disposable things; they are going to get married later and have fewer children.

That means their income over that period of time is quite significant.

“If I looked at that as a persona alone, there are so many products I can wrap up into that persona, [including] where they’re renting, what they eat, where they buy from, their health interests ... It then makes sense to me. Don’t have a grey-haired 50-year-old agent

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 21

communicating with them. Create an ambassador to communicate with that particular tribe. It could be someone from the area that’s recognisable through social media or television. Then make sure you deliver a bundle to suit their lifestyle – and deliver it on a mobile phone. They know how to read it, and they can consume it in a way that they want to consume it. To me that’s a no-brainer market.”

seen it with a whole litany of different marketplaces.

The consumer will drive that and someone will actually blink first. Insurance is going through that at the moment. They’re starting out saying, ‘Goodness me, there’ll be driver less cars all over the place.’ I’ll predict within 10 years or 15 years, you’ll actually be paying a premium to drive your own car, because you’ll be more fallible than the computer.”

Says Ossipoff, “It’s all about how smart the estate agent can be in terms of understanding their market and the product that they have to go and take to market, and then tap into that and provide services that say, ‘Wow, that’s a signature experience’.”

Adds Cohen, “There is a lot of information out there that you can find for free – I call it commodity data: recent sales, comparable properties in the area. All of this is information an agent should be giving to every customer.

But if that’s all you’re giving them, you have nothing.”

USE TECHNOLOGY TO BROADEN YOUR APPEAL Marston says great technology has been around for the past five years that effectively takes a space and shows you how to design or create a property in 3D, and agents should use this to their advantage, both in existing and new properties.

“You can walk through any building and have an experience. Hear the sounds, look at people coming in and out of the lobby, say hello to the concierge. It’s a completely different experience to sitting there and flipping through a beautiful brochure that doesn’t appeal to [a particular] audience any more. It’s an experience that has never been had before and a huge opportunity for the property market.”

GO ON: TELL ‘EM THE PRICE! “Today you get paid for a process to sell a property. If you can sell a property by changing that process, there will be a new price for selling and trading property. We’ve ELITEAGENT.COM.AU • GET READY FOR 2020

Says Ossipoff, “We know people moving house are going to buy furniture. If you take a new mortgage, I’ll offset the cost of the price of the mortgage in some way, but I’ll give you a voucher to go to Westfield and buy furniture. There’s an ecosystem of inter-dependencies, and the more open-minded you are and the more creative you can be about that, the better.”

Marston agrees and says it’s common with his clients.

“I talk about the customer value exchange. What is it that you give them over and above what they can get themselves? In the age of self-serve, it’s an additional layer of value. And the other thing is data. If you’re looking at how much it costs to sell a property; how valuable is that data [around that]?”

And almost thinking out loud Marston goes one better.

“In fact, could you say to people ‘I’ll sell your property for nothing, but I will refer to a number of people who I think will be valuable in the process of selling your property’? I think that’s very disruptive.”

OCTOBER 2015 • 22

4

BIG DATA IS THE NEW CURRENCY

“What you’re describing is funded and powered by analytics and a lot of very smart mathematics which is moving industries from being reactive to predictive.”

4. Big Data is the new currency KEY TAKEAWAYS 1. Predictive analytics will deliver more data and smarts around Geo-targeting 2. Your own data contained in your database can deliver additional revenue streams in the future 3. Don’t assume you know what’s going on; you need to analyse available data.

Just because Gen Y and Millenials look as though they may be the most obvious adopters of technology and innovation doesn’t mean they will be. Look to your CRM for real insights of what and who your audience/customers really are.

BIG DATA IS NO LONGER just for big business with big budgets. While it still sounds to most of us like something out of a Star Wars movie, in this document we have already discussed a number of ways that the real estate industry needs to embrace and use the power of data, and more importantly, their own data.

might be likely to leave home. And the list goes on.

However, Australia has different privacy laws that may prevent some of that information being public domain.

This topic is one of Marston’s specialties and he is quick to point out that there is a lot of value in data, particularly if you can elevate this ‘beyond the transaction’.

“What you’re describing is funded and powered by analytics and a lot of very smart mathematics which is moving industries from being reactive to predictive,” says Ossipoff. “It’s already happening in health, where we are all starting to wear more and more devices, like Fitbits to monitor all sorts of attributes about our wellbeing. In the future, you’ll likely be doing more; for example, recording your heart rate in the morning. It will then be uploaded to a hosted cloud and somewhere on that cloud is algorithm software based around ‘chaos theory’, which basically looks for a pattern in seemingly huge amounts of information. It grabs all the data and sends it to your doctor and your doctor will then call you if they think you need to come in for a chat.

Whilst in the US earlier this year we came across a data mining company in ‘Start-Up Alley’ at the Inman Connect conference. Called Smartzip, this service takes Geo-targeting to new levels of pro activity. Once you have staked your claim on a particular territory or postcode you can log into their system and get a ranking report of which homes are likely to sell – in order. Then an automated marketing platform is layered on top so that as an agent you can put your brand in front of those prospects, focusing your time on the most relevant, timely, potential leads, with tailored multi-channel messages.

The ranking itself happens via a combination of predictive analytics and access to significant amounts of household data. Examined are factors such as the time since the home changed hands, the sort of condition it is likely to be in, likely household incomes, average mortgage data, average age of children and when they

ELITEAGENT.COM.AU • GET READY FOR 2020

IT’S ALREADY HAPPENING IN OTHER INDUSTRIES

“The entire resources sector is driven purely around analytics. As you’re drilling into the coal face, they can determine how hard it is. It works out how much explosive you would need to blow the coal out. They know if they put too much explosive in they get the coal to such a point that they can’t go and resell it because it’s too small. They’ve improved their yields by 30 per cent purely using math and analytics.”

In the future, therefore, it may be feasible that we OCTOBER 2015 • 24

will be pro-actively calling vendors and telling them when would be a good time to sell their properties?

Marston says we may be getting closer to that sort of intelligence, but agrees the value of the data that we already have has not been properly addressed.

BIG DATA COULD LEAD TO NONTRADITIONAL REVENUE STREAMS The challenge is not about creating the technology that allows you to know more; but about making sense of huge amounts of data; deciphering what is important and what isn’t. You need to know what to ask for.

“There are data triggers that can be tracked of when [people are going] to buy, and triggers around when you may be looking to move. I’m working on a project right now which overlays pre-approved mortgage data with locations to target people in their houses. So I can tell if a person in a particular address has a pre-approved $2 million mortgage.

“A mortgage provider would climb over themselves to get an advert placed; for example, in various media in that person’s house, to say ‘We’ve got the best mortgage, come work with us’. A confluence of those things around different services that also fit together, as Michael was saying, around complementary services.

And of course, the opportunity for horizontal integration around that.

“I think being a really good real estate agent is one very small part of the equation of moving, renting or selling your house. But it is only one part of the equation. Look at the potential when you see how connected people are, not only in a social network sense but also through mobiles, through tablets, through the Internet, through networks. Think Amazon: ‘People who looked at this house also looked at these houses’. Then that data profile is something plenty of other groups might be interested in; for example, ‘Who wants to talk to these middle-aged guys in the lower north shore [who are looking at this type of property?]. We do. We’ve got golf subscriptions. We’ve got investment properties.

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 25

We’ve got holidays in Fiji.’ Looking at how different data profiles can be used is fascinating.

“Data can be interpreted to meet the needs of real estate agents and also to address the needs of the consumer; rather than just looking inwardly at the industry, look at the moving process end-to-end. What value can you add? How can you augment the process through connectivity?

Ossipoff continues, “The recent Ashley Madison fiasco has been one of the more interesting ones [here]; interesting because they’ve been recently hacked and 37 million people have been undressed. Australia had four cities in the top 25 – Sydney, Melbourne, Brisbane and Perth. But the number one postcode for New South Wales was Orange Regional Centre. I don’t think anybody expected that.”

DATA TELLS THE TRUTH

“The fastest growing group on Facebook is the over 50s. Fastest growing group on Uber is over 45s. Fastest growing group on Airbnb, again over 50. If you think it’s just going to be one certain group (for example the millennials) who are more openminded about adoption, that is absolutely not the case.”

The message: Don’t assume anything, even if it is based on your own experience to date. Look to data for real insights on who your customer is, because they may not be who you think!

“The speed at which change will [continue to] occur will be phenomenal. Two years ago I don’t think most people were aware of what Alibaba is or has become. Ignore the fact it’s explosive growth, look at the adoption rate of these services among people over 50 who are traditionally slow at adopting. The fastest growing group on Facebook is the over 50s. Fastest growing group on Uber is over 45s. Fastest growing group on Airbnb, again over 50. If you think it’s just going to be one certain group (for example the millennials) who are more open-minded about adoption, that is absolutely not the case. It will be right across the board, because everyone is armed, dangerous and looking for a better mousetrap,” says Ossipoff.

Cohen agrees. “As a middle-aged white guy living in an urban area, my ideas about who would be the technology adopters were middle-aged white guys in urban areas. It turns out that the adoption of mobile in rural Australia was way bigger than I had estimated until I saw what was going on with online traffic.”

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 26

5

HOW THE ‘INTERNET OF THINGS’ WILL CREATE OPPORTUNITY

“The world has gone mobile and all roads lead to ‘roam’. Yes, that’s R-0-A-M. This will be the last generation that ever discusses broadband as a topic.”

5. How the ‘Internet of Things’ will create new opportunity THE INTERNET OF THINGS IS DEFINED as “an

KEY TAKEAWAYS 1. The Internet of Things (IoT) has the potential to revolutionise the property industry, both in sales and property management 2. Look for and educate yourself on new service offerings that will be available and for the home, and how these technologies might appeal to your chosen market niche 3. Base technology decisions and tools for the office around cloud and mobile availability which is already being adopted by small business, not just in Australia but around the world

environment in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring humanto-human interaction.”1 So that means electronic objects talking to each other. Recently Elite Agent Magazine published an article2 by Alister-Maple Brown, CEO of Rockend, who raised the topic of how Mercedes Benz had integrated new IP technology into their vehicles that allows car owners to access features both inside and outside their car from a distance. For example, you can start your car from anywhere or set the temperature inside your car without even being nearby. Take this one step further and integrate this into the world of the Google ‘Nest’ test lab who make thermostats for the home, and voila - you have a car that can control your home’s heating and cooling on the drive home.

PROACTIVE VS REACTIVE When you think about that as a concept, it really does have the legs to revolutionise the property industry.

In property management, for example, you might

1 Source: Wikipedia.

have a dashboard in the future which can track assets, appliances and utility usage and be able to predict when things are going to wear out or fail in some way.

Not to mention the concept of energy efficiency and sustainability being able to add value to a property.

This is Ossipoff’s area of expertise and he agrees this sort of evolution is a possibility. “There’s a whole plethora of service offerings that will become available very soon. In terms of energy efficiency – turning air conditioning on and off, heating, security systems.

You might be watching your TV, and someone knocks on your door, and without you moving, your security camera breaks into the TV so you can see who is outside and let them in remotely without leaving the couch. But there is nothing unified about them right now. You’re sleeping with 17 different remote controls!

But it won’t always be the case.”

Again some parallels can be drawn with the health industry. “The future of the hospital is outside the hospital; the future of the retirement home is outside the retirement home. People want to stay in their properties for longer. There’s a whole series of service models which can support that. The home is about to go through this explosion. It has been possible, but it’s been quite hard.”

2 Elite Property Manager Issue 02 October 2015, epm.eliteagent.com.au.

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 28

Unifying these tools into one simple dashboard would be ideal, particularly when it comes to adding value to the home, or even making the property easier to manage. “Whoever gets access into the home from a technology angle has a big prize to win. Companies like Microsoft think they would have a chance at it because they have software running on everyone’s computers.

Apple think they have a big chance of it because they think it’s going to be entertainment driven. There’s a battleground to go on there because what it really means is the opportunity for the home to become far more intelligent in how it operates.”

“The future of the hospital is outside the hospital; the future of the retirement home is outside the retirement home. People want to stay in their properties for longer. There’s a whole series of service models which can support that. The home is about to go through this explosion.”

OUR UNDERLYING NATIONAL INFRASTRUCTURE “The world has gone mobile and all roads lead to ‘roam’.

Yes, that is R-O-A-M,” says Ossipoff. “We’re going to be using a lot more video and wireless gadgets. The terrestrial line is a fixed line. You have that guaranteed performance. NBN [National Broadband Network] is terrific and necessary. It’s been slow to roll out and I think they’ve had another blowout with their estimates on how much it’s going to cost, but that’ll probably be the last blowout they’ll have and they’ll get it rolled into people’s homes.

“The truth is,” he continues, “this will be the last generation that ever discusses broadband as a topic. It’s going to become effective enough to do what you want, and it’ll be priced accordingly. DSL or BDSL or XDSL or fibre or cable become irrelevant, as long as people know they are getting what they want.”

Ossipoff says investment in the network will continue and people will start to see the value-add services that go into the network itself. “Things which companies used to have to deal with themselves, like back-up and hosting, and security, they get served up to you from within the network. You can take them as a service. If you don’t want to pay for them, that’s fine. You can just have pure connectivity, but if you do want to have them, you’re welcome to.”

He also believes data analytics will be something that takes off well into the future; in particular, unified communications such as video conferences with clients who might be located elsewhere. These conferences will allow people to inspect homes from the other side of the city, or even from overseas, with the agent using their mobile phone to point out particular aspects of

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 29

the property to potential buyers. Ossipoff says this kind of thing will become completely normal and, with the introduction of higher tech systems than ever before, the wireless world is about to reach new levels.

“We’re now sliding up towards something which we’ll refer to as 5G, the next thing beyond 4Gx. This is a thousand gig per second performance, 10 times the performance. Effectively it takes all the restrictions away that we currently have. The adoption rate [of new technology] in Australia is fast. We’ve already got, among the 18 to 35s, 90 per cent penetration of smartphones. By 2018 it’ll be very hard not to buy a smartphone; everyone will have them.

WHAT ABOUT THE OFFICE? “The technologies will be mobile everywhere,” says Ossipoff. “It will be cloud-based services, so you don’t own computers anymore. It’ll be a hybrid service where you will rent it, and you pay for it as you go. That’ll be for software. It’ll be for back-up. It’ll be for computer services. They won’t all come from Australia either; it’ll be Amazon services which we run locally, Google services run locally, Microsoft products run locally. The take-up rate at the moment among small businesses for software as a service in Australia is 4,000 a week. The drop-out rate is two per cent. Once you’re in, you’re in.”

“The adoption rate [of new technology] in Australia is fast.

We’ve already got, among the 18 to 35s, 90 per cent penetration of smartphones. By 2018 it’ll be very hard not to buy a smartphone; everyone will have them.”

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 30

6

RECRUITMENT AND RETENTION MUST EVOLVE

“‘Choose Your Own Boss’ or ‘Design Your Own Job’ is actually transforming why someone will come and work for you. ‘Youngies’ want something where they can feel they contribute, and they are very good at scrutiny and integrity”

6. Recruitment and retention must evolve KEY TAKEAWAYS 1. The turnover for many businesses (not just real estate) is the same. It’s about vision, purpose and leadership 2. The industry needs role models who fulfil a higher ethical purpose to attract younger people. For the younger generation it’s not about technology but about what their contribution will be to the company and society 3. Think about culture and the type of environment you can offer top talent and why they would want to come and work for you.

THE REAL ESTATE INDUSTRY has a reputation for being fast paced, and unfortunately that’s even more so when it comes to turning over staff. Due to lack of onboarding, support and mentoring the job can sometimes be a revolving door; and attracting the best talent is often a problem.

“I don’t know whether, from a young person’s perspective,” says Burston, “it’s taken seriously as a career. Perhaps it’s like working in a restaurant until the next step happens. We also know young people are going to try many careers and many skills before they choose the one that they love doing or they feel aligned with passion, particular, or purpose. Generation Y is thinking very much like that.”

Burston believes it comes down to people and culture.

“If you look at the industry and you look at the emerging generation, why would they want to become a real estate agent? What’s the compelling reason for them to have a career in this industry? That’s the first thing I would look at.

“I don’t believe technology is what is driving the career.

It’s [whether or not] that industry is delivering something that resonates personally and professionally. From an industry perspective, [we need to look at] the triggers and levers that can be pulled for people entering the industry to escalate their careers. The turnover for many businesses [not just real estate] is often the same. It’s about vision, purpose, and leadership. When those things

ELITEAGENT.COM.AU • GET READY FOR 2020

are driven from the bottom up, and not from the top down or in a circular format, it works really well. Culture and people within organisations, and within industry, look for role models. They look for mentors. They look for people they can go to and surround themselves with; people who are much better at what they do and who have walked the pathway they want to walk.

“It would seem wise to me to have that pool available or that resource available. If you were to look at the industry today, who are the role models? Who do I want to be? Who do I want to become? Why am I in this industry?”

RE-SKILLING WILL BE NECESSARY Thorpe believes stability is the key, particularly when it comes to sales roles. “Sales roles in almost any industry have higher turnover than the community average.

Whether it’s in retail sales, whether it’s in property sales, car sales, for whatever reason the nature of that job just over time has meant it’s less stable. Some will certainly stay, but there’ll be a higher turnover.

“The problem is the skills and the jobs that are there now are not the skills and jobs that are necessarily going to be there in the future. As I said before, 82 per cent of these jobs are under threat either of extinction, because elements of it disappear, or change; and we see the new technology underpinning the activities of the organisation. As this becomes a more stable, common

OCTOBER 2015 • 32

technology-based industry in sales, I expect we might see greater stability in the sector,” he says.

Burston agrees. “Looking at the broad offering within the industry in the future, whether that’s in digital marketing, analytics data, collective services, collaboration; there are new roles that would make young people far more excited about the industry. I think having a look at those and help defining what they may look like can take a young person on a journey with a vision.”

DOES YOUR BUSINESS GIVE BACK? Ossipoff says with the aging population in Australia, retaining young staff is something he has been looking at very closely. Being connected is something he believes is imperative in this respect. He says he has even been working on new concepts at Telstra such as ‘DYOJ’ and ‘CYOB’.

“DYOJ is Design Your Own Job and CYOB is Choose Your Own Boss. If you’re the principal of real estate business, that might be quite confronting. As a suggestion, as you run your business think like Kim Kardashian. I don’t think she’s got any special skill that I’m aware of … apart from the champagne flute balancing trick! But she’s got more followers than some countries have humans. Her entire business is about having a point of view and people will go out and follow it.

ELITEAGENT.COM.AU • GET READY FOR 2020

If you’re running a business that is contributing back to society, people will get engaged with that. It gives them a sense of purpose where they can look at themselves in the mirror and say, ‘Hey, this is a really good thing I’m doing. I’m contributing’.

“Again, people will follow people who have points of view. If you’re doing something new in the industry, people will want to be part of it if it’s cool. They want to be involved in it. If you’ve got a set of jobs where there’s always some onerous report-filling or when the tenant leaves and you still have to fill in the form by hand ...

I’ve actually seen one estate agent who does it by voice using Siri on an Apple device. It’s much faster, but it’s cool. It’s interesting in the way it works.”

He believes letting people design their own job is important. “Choose Your Own Boss or Design Your Own Job is actually transforming why someone will come and work for you. ‘Youngies’ (Gen Y) get an idea of purpose.

They want something where they can feel they contribute and they are very good at scrutiny and integrity. If you’re running a business that is contributing back to society (which real estate should be doing), people will get engaged with that. It gives them a sense of purpose where they can look at themselves in the mirror and say, ‘Hey, this is a really good thing I’m doing. I’m contributing’.

OCTOBER 2015 • 33

7

ARE YOU READY FOR 2020 ...AND BEYOND?

“What are the five things that I can change right now, today, which will take me one or two steps forward?”

7. Are you ready for 2020... and beyond?

KEY TAKEAWAYS 1. Observe what is happening in your business right now. Take the time to poke your head out at the world and look at what is going on.

2. Look at five simple things that you can change today to take you one or two steps forward 3. Find some trusted advisors to help you along the way 4. Revisit your business plan and note down the steps it would take you to get to your desired state.

WHILE SOME OF THE TOPICS discussed in this paper seem complex, it is a process of gradual change. Burston believes the first step is for agents to go back into the space and simply observe. “What are the five things that I can change right now, today, which will take me one or two steps forward, and how do I do all that? It’s the how that really gets people stuck. Then you have to look at the practicalities of it. Where am I still using paper in my office? How do I get rid of that? How clean is my database? When was the last time I tidied that up and cleaned it out?

“I speak to a lot of SMEs and entrepreneurs - in the thousands, literally – and they get stuck with how. If you lay all this over the top of another service provider who says, ‘I can show you how. This is the best practice, or this is going to become [the standard] in ten years’

time,’ that’s actually really useful as well because small business owners, while they’re running their business, rarely have the time to poke their heads out and look around and see what’s going on.

“My suggestion is to consider what are the five things I can do this week, in the next month or next quarter.

What do I want to be known for? What do I want to be in my industry? What are my capabilities and resources to make those changes? What are the capabilities and resources that I’d like to have so I can go and find that at some point? Then, how does that marry up to the ability for me to create a strategy? Where was the last time I created a strategy for my business? How old is my business plan? Basic, basic, basic. Get back to real steps that work and that you can see impact and measurable outcome very quickly.”

“Small business owners, while they’re running their business, rarely have the time to poke their heads out and look around and see what’s going on.”

ELITEAGENT.COM.AU • GET READY FOR 2020

OCTOBER 2015 • 35

subscribe to the Brief eliteagent.com.au/subscribe