From books on Amazon to sellers on eBay, Web-savvy consumers have become ratings happy. And why shouldn’t they be? What better way to make an informed purchase than to read reviews from like-minded consumers? The review frenzy is not limited to goods, either. More and more consumers are looking for positive reviews to bolster their belief that they’re hiring the best architect, plumber, or (ahem) real estate practitioner.
With this in mind, the California, Virginia, and Houston associations of Realtors® are promoting rigorous customer satisfaction programs for their members—programs that not only train and certify Realtors®, but also survey the Realtors®’ customers and post the feedback online. More than 1,500 CAR members and nearly 500 HAR members have completed the training.
As part of a broader effort to improve members’ standards of behavior, the California, Virginia, and Houston associations have signed on with a company that will first train members on the principles of accountability and service, then, with the member’s consent, survey their clients. The association and the agent then have the option to publish the ratings. The Houston association Web site already features member ratings and a search for certified members.
The certification company is called Quality Service Certification (QSC), and while its concept isn’t unique, QSC is the first to offer a program to real estate professionals nationwide. Associations negotiate a discounted rate for their members who are interested in the half-day program and rating system.
According to Larry Romito, chief executive officer of QSC, practitioners participating in the program (not necessarily through Realtor® associations) have reduced their proportion of dissatisfied customers by two-thirds. Subsequently, they have seen 10 to 30 percent reductions in their errors and omissions insurance premiums.
Leslie Appleton-Young, vice president and chief economist for the California Association of Realtors®, attributes much of this customer service improvement to the “turning the light on” phenomenon. “No one wants to be watched and evaluated,” Appleton-Young reflects. Yet the truth is that agents who know they will be evaluated are likely to enhance their performance.
In California, where licensed practitioners easily outnumber housing options, association members are looking for ways to set themselves apart.
Highly rated practitioners can use their feedback for marketing purposes, says Scott Brunner, CEO of the Virginia Association of Realtors®. It’s not just individuals who benefit, though. Brokerage firms reap the rewards of being able to boast a certified and rated sales force. They also use customer feedback to coach agents in their weaker skill sets.
If ratings are good for consumers, Realtors®, and brokerage firms, why aren’t they universal? And do associations need to get involved?
Service Culture Shift
Adopting a customer-service mentality is something of a culture shift for the real estate industry, remarks Appleton-Young. Traditionally, the only feedback the industry has required and respected is financial. “Performance feedback in the real estate industry is almost entirely production and sales—how much, not how well,” adds Romito.
Yet a customer service-based shift is taking place. In recent surveys conducted by Dialogues Research Services, a Colorado research firm that performs customer-satisfaction studies for brokerages, only a third of customers reported that their real estate agent had met expectations. More than a quarter reported that they would never do business with the agent or broker again.
There’s no single reason why consumers are unsatisfied. Chet Mills, president of Dialogues Research Services’, notes that consumers’ expectations have been heightened by several factors, including higher commissions stemming from housing inflation; the availability of lower-cost, limited-service brokerage options; and prior consumer experience in the real estate market.
Another reason is that some agents genuinely need to improve their customer service skills. “Lots of people are poorly trained,” explains Anne Murray-Randolph, a real estate consultant and publisher in Highlands Ranch, Colo. “There are cases where people are misled. There are conflicts of interest.” Even practitioners who pride themselves on outstanding customer service may fare poorly in customer satisfaction surveys. Associations can facilitate the culture shift by lending support to or creating their own service training initiatives. These efforts will both raise Realtors®’ customer-service standards and provide valuable information to consumers.
To Subsidize or Not to Subsidize?
There is a healthy debate surrounding the issue of whether associations should subsidize members’ use of these programs. Murray-Randolph, feels that subsidizing quality-service programs amounts to favoring smaller players at the expense of the larger firms because small firms couldn’t afford the program on their own. Romito argues that improved customer service benefits all members.
At the very least, though, associations can use their buying power to negotiate discounts for all members who want to participate in quality-service programs. For small firms or independent practitioners, the association’s buying power can make it possible to participate.
For the associations that underwrite a portion of the survey costs, their generosity does not go unrewarded. In exchange for their support, these associations can use the home buyer or seller survey results as they see fit. Survey results can benefit all members by highlighting opportunities for improving the association’s education program. “If you start to get consistent patterns, you know something needs work,” says Bob Hale, president and CEO of the Houston Association of Realtors®.
In-house or Unbiased Third Party?
If an association wants to promote customer service, does it need to work with an outside consultant, or can it create its own program? Although an association could take the do-it-yourself approach, Brunner and Hale found reasons to seek outside help.
“We toyed with the idea of creating something ourselves, but it was a lot of time and effort when something else would work for us,” Brunner says.
An even more serious consideration is that brokerage- or association-sponsored ratings don’t have the credibility of third-party ratings. Hale recalls that the Houston Association’s decision to use an outside program was influenced by a desire to avoid being perceived as biased. Even when no bias exists, customers tend to be less forthcoming with answers when they are questioned by brokers or associations. You can bet that prospective customers take this candor element into consideration when they see the rating posted on the Realtors®’ Web site.
“No one will be honest without a third-party survey,” Murray-Randolph says. “The stronger the brand of the independent rater, the stronger the value.”
Associations don’t want to be put in the position of judging their members, says Romito, but they recognize that giving consumers unbiased, thrid-party information that further helps elevate the image of Realtors® is increasingly important.