Strategic Planning Idea Exchange National Association of REALTORS® 2011 Anaheim
Strategic Planning Idea ExchangeStrategic Planning Idea ExchangeNational Association of REALTORS® 2011 Anaheim
WELCOMEWELCOME
Bob Kulick2011 Strategic Planning Chair
Shannon Williams-King2012 Strategic Planning Vice Chair
Elizabeth Mendenhall
2012 Strategic Planning Chair
Today’s ObjectivesToday’s Objectives
• Exchange IDEAS – Gather thoughts on the future course for our industry
• EXPOSE Leaders to the Strategic Plan• Cultivate the development of GAME-
CHANGING Ideas! – Think beyond the Usual
• Involve MORE Members in the Strategic Planning Process
Game Changing IdeasGame Changing Ideas
What “game-changing” events will impact the real estate industry in the next 5 years?
NAR Strategic ThoughtsNAR Strategic Thoughts
Game-Changing IdeasGame-Changing Ideas
The best way to have a good idea is to have a lot of ideas.
Linus Pauling
NAR Strategic PlanningNAR Strategic Planning
• Consumer Focus Groups
• REALTOR® Focus Groups
• Outside Experts• Committee of your
Peers and Staff
The Art of the Long ViewThe Art of the Long View
• Scenario Planning• Challenging our “Mental
Models”• Lifting the “Blinders that Limit
our Mind”• Move Beyond Forecasting the
Future to Preparing for it!
ScenariosScenarios
• Demographics• Organizational Structure• Technology• Value Proposition
Small Group Report onDEMOGRAPHICS
Small Group Report onDEMOGRAPHICS
Generations in Brief Generations in Brief
Baby Boomers(1943-60)• 78 million• Social• Optimistic• Career oriented• Loyal• Most
REALTORS®
Gen X(1960-80)• 50 million• Independent• Problem
solvers• Portable career• Not easily
awed by authority
• Desire freedom at work
Gen Y(1980-00)• 80 million• Self-confident• Civic-oriented• Career with a
conscience• Respect for
authority• Thrive on
structure
Issues and Challenges With Multiple Generations
Issues and Challenges With Multiple Generations
• One size does not fit all– Each generation communicates, does business and
thrives as an association member in different ways• Knowledge is power
– Baby boomer REALTORS® need to understand Gen X and Gen Y as they come to dominate the market
• Selling the value of a REALTOR®
– Younger buyers and sellers will be reluctant to work with a real estate professionals who cannot meet their needs for advice and council (they already have the data).
• Opening up leadership opportunities– Associations need to create attractive opportunities
for X’s and Y’s and shorten the time to climb the leadership ladder
Scenario 1: Organized real estate is hot, hot, hot
Scenario 1: Organized real estate is hot, hot, hot
REALTOR® Organization takes the lead by:
– Educating members about the views and values of younger generations as consumers and sales agents/brokers
– Encouraging mentorship to integrate X’s and Y’s into the business
– Segmenting benefits and services to each member
– Streamlining the leadership structure
REALTORS® and the industry embrace X’s and Y’s by:
– Showing they understand their needs
– Providing superior and appealing technology
– Offering a variety of work arrangements
– Developing entrepreneurial opportunities
Probability: 42%
Scenario 2: Why won’t they listen to us?
Scenario 2: Why won’t they listen to us?
REALTOR® Organization has done the right things:
– By opening up channels of communication with younger members
– By promoting volunteerism that is important to Y’s
– By providing more involvement in governance by X’s and Y’s
– But still see membership decline as boomers exit the business and X’s and Y’s become increasingly productive using technology
REALTORS® and the industry stick with the status quo and:
– Assume boomer values will continue to rule the market
– Retain business and operational models that have worked in the past and assume will continue to work with X’s and Y’s
– See numbers dwindle as business moves toward fewer companies that recognize the changes occurring
Probability: 18%
Scenario 3: We don’t need no stinking badges?
Scenario 3: We don’t need no stinking badges?
REALTOR® Organization has made little progress in adjusting to realities and
– Retains the same leadership structure
– Has a one size fits all view– Fails to listen to younger
members– See influence and relevance
decline
REALTORS® and the industry adapt by:
– Using many forms of information and communication technology that appeal to X’s and Y’s as REALTORS® and consumers
– Becoming the first choice of younger consumers in a transaction by providing the “right” mix of services
– Becoming increasingly productive with fewer members conducting more businessProbability:
28%
Scenario 4: Will the last one out the door turn off the lights?
Scenario 4: Will the last one out the door turn off the lights?
REALTOR® Organization has resisted change and
– Has a structure that is not appealing to X’s and Y’s
– Sees a membership of mostly aging boomers
– Is unable to attract successful younger practitioners as members
REALTORS® are vanishing because– Many X and Y consumers find
it easier and cheaper to conduct a transaction themselves or work with a younger non-REALTOR® agent
– Fewer X’s and Y’s are attracted to the business and see little value in being a REALTOR®
Probability: 12%
DiscussionDiscussion
• In the context of empowered consumers, do REALTORS® and the Association have the most complete understanding of the forces that will shape preferences of real estate consumers during the next decade
• To what extent are baby boomer generation REALTORS® able to successfully meet the needs of a diverse, and often younger, clientele
• What will be necessary to draw the next generation of future REALTORS® to the business and ensure engagement in the Association
Game Changing IdeasGame Changing Ideas
In light of the changing demographics…
What “game-changing” public policy might be introduced, changed or repealed to position the industry for long-term success?
Small Group Report onORGANIZATION
STRUCTURE
Issues and Challenges for the REALTOR®
Organization• Younger generations see less value in belonging to
“The Club”• Value of membership unclear for some members• Disconnect between impressions and attitudes of
governing members and the rest of the membership• Organization is viewed as one of several providers of
services, although advocacy efforts remain highly valued
• Organization tries to be all things to all members even if many members do not recognize value of services
• Competition from outside means that associations that are financially dependent on MLS are vulnerable
Scenario 1: National takes charge
NAR leads a restructuring of the REALTOR® organization
– Eventual consolidation of locals and MLSs to no smaller than a metro area or regional market area
– Focus on key constituencies to include brokers, emerging leaders, successful REALTORS® and others
– Streamline leadership path to open more opportunities for Gen X and Y in governance
– Create a new membership organization of property owners
– Lead industry in adapting to newer and better business models and technology
Result is a more nimble, targeted and effective REALTOR® organization
Scenario 2:It’s too late baby!
NAR has seen the competitive wave coming, but– Changes are slow in developing and endlessly debated
given a disconnect between decision makers, members and governance structures
– Leadership path remains long and discourages younger members from participating
– Firms offer more and more services and members begin to withdraw from REALTOR® organization
– MLSs and local associations become less viable as outside competition increases
– Three-way agreement at risk
Result is a much smaller REALTOR® organization with diminishing influence
Discussion
• Who are the vital constituencies of the organization?
• What is necessary to make the organization “younger”?
• How should messages and services be targeted?
• What is the proper relationship of the organization with property owners?
• What is the appropriate organization structure for the future?
Small Group Report onTECHNOLOGY
Small Group Report onTECHNOLOGY
The Technology EnvironmentThe Technology Environment
1. Speed– Over the planning horizon speed of technology may increase as
much as four fold.
2. Power– Constant connectivity, large volumes of data and greater
customization of information to accelerate
3. Competition– Declining price of tech allows anyone to be their own business and
compete with the largest players
4. Responsiveness– Increasing speed leads to higher expectations of responsiveness by
consumers
5. Robustness– Consumers demand actionable, accurate, reliable information
Challenges to the IndustryChallenges to the Industry
• Information Challenge– Expectation of constantly updated local
information about properties– Consumers growing expectation of continuously
updated consumer feedback including agent ratings
– Peer advice through social media – peers become the “experts”
– Determining the value proposition for consumers when data is freely available
Challenges to the IndustryChallenges to the Industry
• Speed to Market Challenge– Instantaneous information transmission in all areas of
business, among consumers and thru social media– Availability of better decision tools requiring relevant and
accurate data– Increasing premium on being the first point of contact
• Organization Challenge– Technology often transcends geography in organizations– Direct contact with and between members outside 3 levels
of REALTOR® organization more easily accomplished today– May require tailored messages to many separate segments
of consumers and REALTORS®
Threats and OpportunitiesThreats and Opportunities
• Someone will do it better• Growing tech gap between
consumers and REALTORS®
• New tech standards for display of property information
• Diminished value of MLS• REALTOR® organization
relevance diminishes• Consumers use social
networking to form own advocacy groups
• REALTORS® use tech to enhance consumer experience
• Creation of a global real estate market operated by REALTORS®
• Increased REALTOR® productivity• Segmentation of messages to
member subgroups• NAR becomes a technology leader• Attract consumers to NAR• REALTOR® organization leverages
technology benefits
Threats Opportunities
Scenario 1: We are the drum majors of the real estate market
Scenario 1: We are the drum majors of the real estate market
REALTOR® Organization builds on opportunities created by technology to:
– Use size and scale to garner benefits and pass benefits along to members
– Adopt technology that increases speed and quality of communications with members
REALTORS® embrace use of advanced technology to:
– Offer the public the most accurate, complete and instantaneously available information about property
– Reach the next generation of younger consumers
– Attract younger people to the industry as a first career
Probability: 42%
Scenario 2: The orchestra plays on
but the conductor is out to lunch
Scenario 2: The orchestra plays on
but the conductor is out to lunchREALTOR® Organization fails to lead in technology and
– Offers little or no guidance to members on technology issues
– Relies on increasingly ineffective mass appeals to organize political action
– Members look outside the organization as relevance declines
REALTORS® embrace technology and
– Are forced to compete with tech-savvy competitors from outside the industry
– Are leaders in the presentation of property information buttressed by the accuracy of MLS data
– Offer compelling services to consumers who look to them as experts
Probability: 18%
Scenario 3: Why can’t I get these guys to play together?
Scenario 3: Why can’t I get these guys to play together?
REALTOR® Organization adopts long view, embracing technology and
– Revamps communication channels by segmenting messages and communicating directly with members
– Sets up R&D function to prepare members for outside tech driven competition
– Provides compelling tech tools to members
REALTORS® unwilling to change, leading to
– Increasing disintermediation as consumers turn to tech driven companies
– Resistance to changes among older members while few younger members join, leading to falling membership
– Small number of “survivors” around which the association re-groups
Probability: 28%
Scenario 4: The stage is dark and the curtain falls
Scenario 4: The stage is dark and the curtain falls
REALTOR® Organization remains largely unchanged with
– Growing emphasis on “club house” status
– Fewer and older members participating and volunteering
– Diminished effectiveness in advocacy
REALTORS® continue to conduct business as usual and
– Fall behind in use of technology expected by consumers
– See income and influence decline
– A small group of REALTORS® exploit technology profitably and abandon the association
Probability: 12%
ObservationsObservations
• Technology provides consumers with new opportunities to gather information and make decisions independent of real estate professionals changing the Value Proposition between REALTORS® and consumers
• Increasingly powerful business-oriented technologies may alter the relationship between REALTORS® and the REALTOR® Organization as the three-level hierarchy diminishes in importance
• Technology will influence the REALTOR® organization – especially local associations and MLSs – as the barriers to the availability of real estate information are reduced
Small Group Report onThe VALUE PROPOSITION
What is the Real Estate Value Proposition?REALTORS® and Consumers• Value is highly personalized
– Consumers expect individualized service and attention to their needs
• REALTORS® must connect with individual needs– Consumers drive the transaction and
expect to have their needs met• The value proposition varies over time
– Consumers’ view of value changes along with technology and generational dynamics
• The value proposition is the balance between costs and benefits– Consumers expect to receive a benefit
greater than the cost they pay.
What is the Real Estate Value Proposition?REALTORS® and the REALTOR® Organization
• Information and communication– The organization supports the MLS,
networking, business development, and the gathering and creation of information to serve consumers
• Representation– The organization provides legislative and
regulatory advocacy• Business tools
– The organization provides information on, access to and training in tools to help REALTORS® serve clients
Challenges to the Value PropositionREALTORS® and Consumers
• Maintaining long-term relationships with consumers– REALTORS® need to touch consumers
through a variety of channels– If the relationship is unsatisfactory,
consumers will go elsewhere• Efficiency of the transaction
– REALTORS® need to understand the consumer’s needs, set expectations, customize services, but not waste their client’s time
Challenges to the Value PropositionREALTORS® and the REALTOR® Organization• Increase member awareness of value of
goods and services– Organization services and communications
need to be customized and targeted to a segmented member base through many channels
• Put money in members’ pockets– Organization should craft its goods and
services to provide value and meet evolving needs of members’ businesses
– Organization should communicate value of services to members
• Examine membership pricing– Dues model (e.g. country club pricing) may not
offer the best value proposition to member
Scenario 1: That’s my REALTOR®; That’s my Association
REALTOR® Organization makes membership invaluable by:
– Being a technology leader and providing information and training
– Engaging in advocacy effectively
– Raising public awareness among consumers
– Providing information that defines the REALTOR® as an expert
– Offering discounts on business tools and services
REALTORS® engage the consumer by:
– Making them the center of the transaction
– Customizing services– Providing client feedback
and ratings– Having a command of
technology– Communicating and
listening
Probability: 33%
Scenario 2: I’m terrific in my business, but its no thanks to that REALTOR® organization
REALTOR® Organization fails to lead and
– Relies on the status quo of the three-way agreement
– The governing members are closed to new ideas and do not encourage member involvement
– Sees advocacy ceded to large firms and franchises
– Firms become the primary source of member value
– Membership drops
REALTORS® have become the market experts by:
– Effectively using information and technology to serve consumers
– Customizing their practice to the individual client
– Developing a positive image in the community as trusted resources
Probability: 33%
Scenario 3: Why aren’t these people listening?
REALTOR® Organization embraces change and
– Makes business easier and more profitable for members
– Offers benefit packages to members that are highly personalized
– Increases participation in advocacy efforts with targeted member communication
– Raises the esteem the public has for REALTORS®
REALTORS® unwilling to change and continue to believe that they:
– Are the focus of the transaction, not consumers
– Know better than consumers because of their knowledge and experience
– Are the gatekeepers of information
– Need not be active in the association
Probability: 18%
Scenario 4: Rearranging the deck chairs
REALTOR® Organization has resisted change and
– Continues to operate as it always has
– Fails to help its members adapt to new competitive forces
– Retains fewer, older, less productive members who value the social club
REALTORS® are unwilling to focus on the consumer and
– Lose their place in the transaction
– Fail to adopt “smart” technology consumers expect
– Are replaced by salaried sales people paid a fixed per transaction fee by a national firm
Probability: 18%
Discussion
• Already armed with freely accessible information, consumers expectation about what professionals add to the transaction has evolved.
• The value proposition is influenced by generational dynamics – younger do-it-yourself consumers want a different set of services than other generations willing to let an expert take charge.
• With growing competition to the REALTOR® organization from outside entities as well as large firms what does it take to cause practitioners to join voluntarily? How should this value be communicated to members?
Game Changing IdeasGame Changing Ideas
If you weren’t afraid of failure or you weren’t afraid of the word “no”…
What are your “game-changing” ideas to position the REALTOR® to provide maximum value to our clients?
NAR Future PlanningNAR Future Planning
REALTOR.org ResourcesREALTOR.org Resources
• Field Guide to Strategic Planning• RARE – REALTOR® Association
Resource Exchange• Research Data - Industry, State, City
REALTOR.org ResourcesREALTOR.org Resources
• Buyers and Sellers Profile – Most Popular Research Piece
• Member Survey • Contact Research for
custom numbers
2012Listen to Your Heart
2012Listen to Your Heart
• Move Beyond Forecasting the Future to Preparing for it!
• The best way to have a good idea is to have a lot of ideas!
• Involve More!• Courage to Act!
The Future…Starts TodayThe Future…Starts Today
• 2012 Minds Focused on the Future in 2012
• 12 Forums - Gathering Ideas, Charting the Course and Working Together
• Maximizing our Members and encouraging MORE!
• Stay tuned for more information to sign up.
“Tomorrow belongs to the people who prepare for it today”
Thank YouThank You