We're Talking About Inflation, Software for REALTORS ®, and What to do About Both.
This month, we're talking about inflation and the rising monthly costs of software for REALTORS ® in Canada. With many tech providers feeling the squeeze of inflation they're turning to last resort practices. As a result, many have begun raising their rates for monthly subscription services.
If you rely on software for marketing, real estate listing data, content, and customer data management then you might be looking at where to cut to help your own bottom line. You aren't alone. Canadians are feeling spending pressure at the pumps, the grocery store, and on all consumer-related spending. It was only a matter of time before we saw the aftermath trickle into our business expenditures. The question remains, how can you keep up with the rise in costs? Should you try to keep up? And, what if anything can you afford to cut? Let's dig in below.
Nice to Hear from You!
Recently, we received an email newsletter from one of our subscription providers. It's one of many emails that has been commonly making the rounds. The company, which rarely if ever has sent an email newsletter in the past is touching base to let us know that for "the first time ever" they will be raising its rates. They've chosen to apply a 20% bump to all monthly plans across the board.
This was an excerpt of their statement:
Now, for the first time, we are increasing the price of your subscription plan to better reflect the value we have added to your business and ensure that we keep investing in research and development.
Now, there's no doubt that this software as a service is invaluable to our business. We use it daily and it helps us to do our job more efficiently. It's not one we can do without. But a 20% increase without warning affects a company, so what are our choices moving forward? This is what we boiled it down to,
- One: Suck up the increase
- Two: Pass the added cost onto our customers
- Three: Find another provider who offers better value/service
How Do Tech Companies Evaluate Other Tech Companies?
We have determined that the software is of value to us. This was the first step in evaluating whether or not to hit that 'Cancel Now' button.
The software allows us to take care of a multitude of tasks that would otherwise require at least one full-time person to manage. The efficiency of the product was never in question.
However, what we didn't know was whether or not something else has come around since we got comfortable using it.
The tasks are repetitive, and common for our industry and overall there's plenty of fish in the sea when it came to companies offering this type of SaaS. A quick Google search looking for like-minded providers presented a bevy of options for us to research. However, that in itself presented another challenge.
In today's climate when the work calendar is packed and stacked, how do you find the time to research, set up, and then learn a totally new software system?
These are all common factors in the decision to switch tech providers. None of which can be taken lightly because they all come down to how much time and bandwidth you have available. Oftentimes, this is what companies making a price increase will bank on. That you are happy enough with the product that a small monthly increase won't cause you to throw the baby out with the bathwater. However, when we find ourselves in the economic situation many are facing today, it's inevitable that there will be some wandering eyes.
Sucking Up the Increase is One Thing, Charging It Forward is Another!
Ultimately, in this case, we decided to go with option one. Suck up the increase. Mainly because the software has been good to us and the thought of switching providers is extremely daunting. Even though we aren't 100% on board with the reasoning and are somewhat skeptical that it isn't solely for profit reasons. We all understand that this is par for the course in today's economy. Even if our own rates haven't increased in well over a decade.
We won't be passing on the increase to our customers. This one is a little trickier but we had to look at our own customer base to determine if this would be a smart move or would just ruffle feathers. I'm sure the aforementioned company weighed the very same options. Will the wave of cancellations because people are upset outweigh the future revenue, how long will it take to build back, and basically will we ever financially recover from this? As mentioned, this isn't the only cost that has gone up over the past few months.
Don't Have to Look Too Far
In fact, the biggest increases have come from the very boards that serve REALTORS®. That's right, listing data. Data storage, access, and integrity continue to go up across the country. Even the CREA DDF® which was originally established as a free and open source option for Canadian REALTORS® and brokerages to access their own data has recently issued a pay scale model. And it was not cheap for technology providers who had been largely offering this service as a workaround for agents and brokers who were unhappy with their local boards' data provision.
CREA issued the following statement when it announced the increase in fees.
On April 1, 2021, we introduced Phase 1 of our new fee structure for technology providers operating 51 or more data feeds. We’re now moving into Phase 2 which will commence on October 1, 2021, focusing on technology providers operating 6 to 50 data feeds.
Data feeds are still and will always be free to members. Charges will only be applied to technology providers, as per the new pricing model.
Technology providers like us, use the DDF® at the direction of the customer. The customer, generally a REALTOR®, does not know how to build a website and connect their data to a front-facing solution. That's where technology companies come in on their behalf. The services we provide are to show that data on a front-facing details page, along with providing website visibility and marketing.
Good Data Doesn't Take Care of Itself
Data has become big business. Bigger than anyone could have ever projected. With more and more people and businesses turning to Cloud-based solutions there's no surprise that companies are monetizing. For one, they have to pay for the storage, maintenance, and security on their end, and two, finding engineers that are equipped to do this line of work is not easy. Good data isn't free.
This was a case where we could not burden the cost of the data feed. As a result, the costs have been re-distributed to participating brokers and agents. We don't mark up our costs and our billing is transparent, but nonetheless, it was something that ruffled feathers. Especially considering that the fee increase came after a major data disruption on CREA's side that lasted weeks. And not to mention they added a little sting to the message at the end.
We understand members may be impacted by introducing new charges to technology providers, through increased service prices or technology providers choosing to discontinue this service. In the rare case of disruptions or rate increases, we have a complete list of alternate technology providers who can ensure your website continues receiving listings from REALTOR.ca DDF®.
So whether it's a 20% increase in software or a yearly fee increase from inside your own professional membership there is no question that it's getting more and more expensive to do business - online and offline. What can you do to stay alive online and ensure that it's worth it?
Here are a few points to consider when you're looking to reduce monthly software costs:
Choose to work with a company that matches your scale.
This is something that is rarely discussed but in a world of faceless corporations and titans, it is becoming increasingly obvious. The tech company from the US doesn't care about you. You are a number. The company that specializes in real estate tech in the big city across the country doesn't care about you. They care about adding dollars to their bottom line. They'll never worry about the quality of work that they do for you because they'll never run into you at a conference or the grocery store.
That is what a corporation does - they focus on growth at all costs. Work with a company your own size and preferably within your own region and you will begin to see a difference. The same tools, and marketing channels are available to everyone, thanks to the Internet. And if that isn't enough you can always consider that more often than not a big corp cannot move as fast as the little guy.
You don't have to go big anymore. It's perfectly acceptable to also go home.
Audit your digital footprint. Do it often and be ruthless.
Your digital hierarchy should look like this:
- Real Estate Website (SEO Domain + Marketing URL)
- Well curated and maintained social media accounts
- Secondary websites
- Online profiles/listings/directories
Your website should be your biggest investment. From there you can do anything, connect anything, share anything and attract whomever you need. Next up, is social media - BUT. That's right it comes with a really big BUT. Do not have social media accounts laying around that are outdated. Ignore what you've heard and please delete that Tik Tok, unless you're a content creator first/REALTOR® second.
Next up, are secondary domains and websites that are targeted to your specific sales goals eg: homeswithsuites.ca. After that come the local directories and website profiles. These are all great to have for your visibility, provided that you can keep them updated and current. If you can't, then get rid of them. Why is visibility important you ask? Visibility builds an implied trust and there is nothing more important in marketing than trust.
Look for software that makes you more efficient and includes multiple services for one all-in cost.
Real estate website providers like EstateVue, are focused on providing software tools that improve REALTORS® quality of work life. As such, there is often a multitude of tools included behind the curtain that aren't even listed because they are deemed need to have not nice to have. We've developed everything from internal communication boards for brokerage-level clients to tracking who the busiest agent is from your broker's website.
There are so many tools that are designed to increase your efficiency so that you can have as close to an all-in-one system as possible when it comes to marketing and engaging with leads.
CRM - use a Google Sheet. Not only will it keep you on track it will keep you humble and connected to your customers. Update it every morning based on the previous day's contacts and incorporate your list into your daily or weekly activities. Send a personal email, and if you don't know what to say then you shouldn't be emailing. That's SPAM. Nobody likes SPAM.
Website chat for REALTORS®- it should be free with your website and is the biggest lead capture and generator you can implement. If you don't have it then you should. If you don't like it then you should give it another try because your customers love it!
Save time and look at where you can make improvements to your marketing rather than starting immediately from scratch.
If you feel like your subscription services have gotten out of control the last thing you want to do is make hasty decisions. Carefully evaluate what you have. If you make a mistake and cancel too early you might not get back in at the rate you once had. Make a list and come up with a rating system to flag each item and its importance to your business. From there you can make decisions about which service to keep and what is no longer serving you.
During the process, you'll get back in touch with your business, cut down on expenditures, and come away with a fresh outlook on your real estate marketing.
There are companies like us who offer this service if you feel it is overwhelming. While nothing is free in this world any longer and in fact, prices continue to reach higher and higher there is still one thing that runs true when it comes to marketing. You get what you pay for. Even if your budget hasn't changed you can still make waves with the right planning and guidance.
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