Perhaps brokerage firms need to think about how brokers can use agent client data without damaging the relationship.
I had an interesting discussion with a leader of a realty firm the other day. We were talking about the fact that the largest and most significant repository of data or information in the industry is basically off limits to brokerage firms. Of course, we were talking about the client and customer data of the agents. While having excellent access to data about listings, sales, revenues, and costs are all valuable, and customer data has potentially far more value.
The majority of brokerage firms don’t have access to it. While brokerages do have access to some of the personal information from listings and sales, few collect this data and manage it for some other use. We know of only one brokerage that does retain it in a useful way—they offer company underwritten follow-up programs for their agents and use it to market their mortgage and property casualty insurance products to those customers for years after closing. Last I checked, they had over 20,000 customer profiles in their database.
As we discussed this further, my friend commented that perhaps brokerage firms needed to think about what exactly could, or would a broker use this data for without damaging the relationship with their agents and what services could they then offer that customer database? The answer to the second question is a lot easier to answer—mortgage, insurance, home warranty, home maintenance, etc.
The first question was more difficult. After thinking about it for a moment, he felt that for the right to offer this non-brokerage–related services, a broker could provide a service that automated the follow-up and marketing process for their agents, pay for it or underwrite it in some fashion. He opined that he thought a broker would also have to offer some assurances that the customer data was the property of the agent and that it could be withdrawn from the brokerage at any time.
Hence the exchange of value from broker to agent. I commented that he was likely on to something and that it should merit some of his attention—soon.
These kinds of discussions are likely taking place at the headquarters of Berkshire Hathaway, Keller Williams, Realogy and RE/MAX as we speak. Their discussions might be about how they can get brokerage and market data as well as their agents’ customer data. We know that Keller Williams is headed this way based on Gary Keller’s comments at the Family Reunion back in February. Of course, Redfin is already there, and likely Compass is not far behind. One also wonders how many of the large agent team businesses are building their databases for these kinds of uses.
Anyone who doesn’t think this a big part of the future of brokerage is not thinking clearly. Artificial intelligence and big data are just descriptors of how to assemble customer data and leverage it.