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3 Keys To Your Business Success– Activities, Resources and Costs

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Reading Jeff Turner’s and Gahlord Dewald’s posts prior to reading this one will help put what I’m about to say into the proper context.

refocusSo, I’ve attended dozens of real estate conferences over the years, from small intimate Bar Camps to the multi-day extravaganza that the National Association of Realtors puts on at its Annual event drawing thousands of real estate professionals.

Sessions are often lead by people who shell out tactical advice on how implementing “X” into one’s business will yield “game changing” results. I watch attendees leave these events, heads swimming, as they reflect on all of their newly acquired knowledge; thinking about which products and services will take take them and their business to the “next level” and how they’re going to implement it all. . .  tomorrow.

Unfortunately, this is backwards… really backwards.

The traditional real estate conference has fostered an environment of tactical addiction, where all of the focus is on how to use and abuse a myriad of shiny new things, products and services. There is little to no focus on actual business strategy that can help qualify any of the tactical advice you’ve previously received, even applies to your business.

It’s time to Refocus.

By the time you reach my session “Key Activities, Resources and Costs”, you should already have ideas around the following (and more):

  • Who you’re really building value for.
  • What problems you’re trying to solve.
  • What channels you’re going to communicate these values through to your customer.
  • How you’re going to build and maintain relationships.
  • How you transform these values into revenues.

Now that your context has been pried open, we’ll begin to facilitate the identification of the activities and resources that are required to fulfill your Value Propositions, Channels, Customer Relationships and Revenue Streams.

We’ll help identify your businesses most important costs, which activities and resources are the most expensive, yield acceptable returns as well as briefly dive into various cost structures.

To get your mind moving… Key Resources may include things like intellectual property, people who help set company culture and/or office space.  Key Activities are those things that you need to do day to day to succeed.

Remember, all these things relate back to the other blocks on your business canvas.  As you identify certain things in one block, what you thought belonged in other blocks are likely change.

Your canvas will become a living, evolving framework for your business.

It’s important to note that we’re not here to give you answers. We’re here to help raise questions. We’re here to move you to think critically about vital components of your business, regardless of which aspect of the industry you serve.

Expect to be challenged.
Expect to be pulled out of your comfort zone.
Expect epiphanies.
Expect actionable results.
Expect to see your business and greater industry in an entirely new light.

This will be a fascinating and deeply personal experience.

You will be covering material not taught in conventional real estate-related schools or continuing education courses… the process and results are far more actionable, lasting well beyond your two days at RETSO.

Once we’ve completed our session, Daniel Rothamel will guide you through the “Key Partners” block of the business model canvas.

It’s time to Refocus on how you view and evaluate current and potential vendors, products and services.

Channels, Relationships, and Revenue

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game changer gahlord dewald retso Game changer. Revolutionary. Gonna change everything. The end of the industry as we know it.

We hear stuff like this all the time at conferences, in blog posts, and repeated and retweeted across the social web.

It’s usually being said about technology. I’ve said stuff like this about technology.

But I’ll tell you something that isn’t a game changer or revolutionary but is instead simple common sense: technology doesn’t change games or participate in revolutions. 

People do.

People change their game and do things differently. People participate in revolutions and change the outlook and stance of their society.

Sure, technology plays a part. But it’s people who are doing. Every single time this is true. People do something, maybe with technology, but people are the ones doing something.

How does this happen? How do the game changing ideas or values get transmitted from the broker or agent to the customer? And how does all that look from a relationship standpoint? Or a revenue stream standpoint?

Understanding how you relate to customers–and for what purpose–is the difference between collecting an ad hoc grab bag of technology and putting together a system that allows you to consistently advance and dominate your market (assuming that dominating your market is something you’d like to do).

Using the business model generation framework, there are two areas dealing with  customer communication:

1)  The channel for delivering product/service; and

2)  Relationships for getting feedback about your product/service.

You can sort of think of the channel as stuff going from you to the customer. And you can sort of think of relationships as stuff going from the customer to you (though it’s very nice if you think of this as two way communication as well).

Channels and relationships flow from value proposition and values

There are a lot of game changers out there that want to revolutionize your channels and your customer relationships. While chasing them in order to avoid the end of the industry, you may be distracted from your values.

Don’t let that happen.

Don’t lose sight of your value proposition. Because that’s the only part you own–the technology nearly always belongs to someone else.

If it doesn’t feel right for you, it’s not going to work. If it doesn’t feel right for your customers it’s not going to work.

In my session for RETSO this year, “Channels, Relationships, and Revenue,” I’m going to be giving away some data about how technology is used by customers in real estate. I’m going to be talking about how technology can reinforce different ways of making customer relationships work. I’m going to give you some tools, techniques and models to do this sort of stuff on your own as well.

After you’ve worked with Jeff Turner to determine what your value proposition is–the big “Why?” in your business–I’ll be working with you to figure out how to deliver that value to customers and and how to assess whether you’re actually doing it.

It’ll be a game changer.

 

Value Proposition Is More Than A Trend

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I’ve read with great interest this year’s Swanepoel Trends Report. Stefan Swanepoel and his talented team of co-writers have again done a stellar job of describing where the real estate industry is, or should be, headed. And the trend that really caught my attention was trend #5, the value proposition of brands.

It’s a critically important topic. I typically attach it to conversations centered around vision and values. And it’s a topic of frequent discussions between me and my friend and mentor, Bill Leider, author of Brand Delulsions.

The Swanepoel Trends Report cites the chief problem facing real estate brands:

“When asked to describe a real estate brand most consumers’ response is: They’re a real estate company or they sell real estate but I can’t describe any unique feature, market niche, position statement, etc. that relates to the brand.”

 And even though I spend a good deal of time interfacing with brand leaders, it’s true for me as well.

Why is this true? The answer seems obvious to me and it appears obvious to Swanepoel. The report states, “The service delivered in almost every national real estate franchise office will differ significantly from office to office within the same stable, and even from agent to another agent in the same office.” Bill Leider labels this phenomena, a brand within a brand within a brand.

As I’ve often said, people love to blame “the model,” or the independent contractor status of the individual real estate agent, or the inability of real estate franchises and brokers to lead effectively. Or they use the state of real estate professionalism, Trend #6, as a scapegoat. Furthermore, they use all of these as excuses for failing to establish a truly consumer-centric brand.

The real culprit, at every level, is a lack of vision, no clear actionable values, and a misguided understanding of what brand really is. “Your brand,” writes Leider, “is a widely held set of beliefs and expectations about what you deliver and how you deliver it, validated by customers’ experiences.”  And it’s that “customer” word that seems to be throwing real estate brands for a loop.

“The reason behind this,” according to the Swanepoel Trends Report, “is the fact that real estate franchisors themselves disagree as to who their client really is.”

 It’s impossible to build a consistent brand experience when you aren’t sure who your customer is.

All of this highlights the fact that, for many, there is no clearly defined path.  It’s hard to get people to follow your lead when you don’t know where you’re going. This is why I’m so excited about what’s happening at RETSO this year. RETSO is moving away from delivering tips and shifting its focus to strategy.

This is not a knock on other conferences. Quite the opposite. There is a place and a need for tips, and for conferences that focus on new technologies and how to use them. I enjoy learning about new technologies as much as anyone. But that conference field is saturated. The problem with tips is that while they generate excitement, they usually don’t have staying power, or real change power. They wow us, we pause to reflect on what has just been said, but after the tweetable moments pass, we go back to living in the present and doing things and relating to people in the same ways we did before we heard the tip – and nothing changes.

I’ve been there. I’ve done that. I’ve been one of those speakers and I’ve been one of those listeners.

“Change requires a conscious plan (even if it’s oral, or written on a napkin),” Leider wrote to me last week in an email. 

“Change requires a concerted, sustainable commitment. Change requires the requisite skills, disciplines, and accountabilities to do and become what you aspire to be. Change requires cultural shifts that reward the desired behaviors and discipline the undesired ones – the ones that people presently practice and that may have been successful in the past. Change requires the willingness and ability to say goodbye to people who refuse to come along on the journey. Change requires patience, long-term commitment and a willingness to hang in there when things go temporarily awry and to get back on the path.”

A Path

A key word in that paragraph is “path.” Strategy is a path. The path is likely to be different than the one you’re on today. So, staying on the path also requires a clear vision and an explicitly stated set of core values. It’s not something that can be accomplished in a day, in a large group, but it’s something that can begin. You can lay a foundation.

Defining a value proposition requires that you answer a few important questions.

What customers’ problems are you solving?  What needs are you satisfying?  What services are you offering to each Customer Segment? If you’re a Broker, there are likely two distinct “Customer” constituencies: end user clients; and real estate agents. There are different value deliverables for each of those groups. By answering the questions you will establish your real value deliverable. And the beauty of the Business Model Generation Canvas, (which is the basis for how RETSO is organized this year) is that it provides a framework for having meaningful discussions around these questions. It becomes even more valuable when these diverse customer segments are defined, because otherwise it’s easy to lose focus in those scenarios.

You must take a hard look at the characteristics of your value proposition, like newness or uniqueness, performance, status, or simply “getting the job done.” There are many characteristics to consider. How you answer the questions will require that you address the various characteristics of value that come into play. Of course, all of this is in the context of your overall business model, “the rationale of how you create, deliver and capture value.” This is simply one very important part of the model.

Why is this important to you? Because you make better decisions about your business when you have a more complete and accurate understanding of your value proposition and the context in which that proposition is delivered. You better direct the actions of everyone associated with your business and they execute more successfully when they have a clear understanding of the value proposition that they are expected to deliver. And everyone extends from the receptionist at your front desk , to your newest real estate agent, to the managing broker responsible for it all.

On April 4, 2013 at 1:00 PM, I will be leading a general session defining  The Value Proposition block of the business model canvas. In this session we’ll outline the process of defining your own value proposition and how to answer those questions. Then you’ll be able to start working on answering them for yourself and your organization.

And one thing is certain, if value proposition is to truly be “a trend transforming 2013 and beyond,” it’s going to require some intelligently focused effort. I’m looking forward to it. Thank you, Stefan, for naming this a 2013 trend. It is that and so much more.

 

RETSO Refocus is for Doers

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Doer, noun. A person who acts rather than merely talking or thinking.

RETSO has always been for the doers of the real estate industry. As we strive to refocus the industry on what matters most, we can’t do it without the doers. At this year’s event we will teach strategic thinking, build unique business models, and learn a common language – but none of this will matter if the doers stop doing.

While we’ve been pointing a finger at what’s wrong, I want to also acknowledge that three fingers are pointing back toward us. RETSO is as guilty for sharing ideas and technology without giving relevant context to your actual business model as any conference. Our video on the homepage said we needed to break RETSO. Now that we have, let’s rebuild it for the doers to do amazing things. Here is a quick breakdown by industry segment of what you will be able to do by attending RETSO Refocus.

Agent
Real estate agents will discover unsatisfied customer needs and design business models around them. If they already have the business model designed, then we will help them articulate the goals, strategies, and values of their model. We will also help them assess the opportunities for improving their business. They will leave with a custom business model in writing and the confidence to master execution of their strategies.

Broker
Brokers will be able to evaluate their current business model.  Some will then design a new business model in an old industry, others will recognize unique advantages their model affords and adjust focus to leverage the advantage.  We will teach the business model canvas to be applied to internal departments.  They will leave knowing they can’t decide the future, but will have a tool in their hand to allow them to design the future.

MLS
Are you a key resource to your customers or do you perform a key activity?  Is your customer the agent, the broker, or the buyer or seller?  We will help codify these answers in a way that allows everyone to understand the role an MLS plays in our industry.  Completing the blanks in the workbook will bring clarity to your business model and allow mastery of the value proposition you provide.

Association
Can an association serve the public, the agent, the broker, and the affiliate under one business model?  We will showcase the versatility of the business model canvas to account for multiple customer segments and mulitple value propositions on one page.  Association staff and volunteer leaders alike will leave with confidence on how it creates, delivers, and captures value for all it’s customers.

Lender
Lenders play a key role in the real estate industry as they provide access to money.  But how do customers prefer to access money?  Does the answer vary by customer segment?  We will show lenders how to deliver value via preferred channels and also define the role a key partner plays in a business model.  Lenders will leave knowing not only how they provide value, but also how to play the role of key partner effectively in other business models.

Vendors/Consultants
Vendors and consultants play a vital role in our industry by helping clients question their business models and envision building better ones.  However, they often need to find the right business model themselves in order to launch an innovative product.  They will leave with a codified business model and mastery of the language to spread their ideas throughout the industry.

Executives
Executives will be able to take their vision for the company and design a business model to execute effectively.  They will take their ‘why’, turn it into ‘how’, in order to accomplish the ‘what’ of their unique ideas.  Through the simple yet powerful resource of the business model canvas, executives will leave with a tool to change their organization.

Intrapreneuers
Those doers who work for executives yet perform like an entrepreneur are what make companies amazing.  We will help them exploit technological developments by tweaking business models to allow creative tactics for success.  They will leave with the ability to communicate with executives on a level playing field and collaborate to find meaningful innovation.

REFOCUS

While we still acknowledge the key role technology plays in our industry, we simply want to change the focus to start with business model design. From there, we can properly evaluate technologies as either a key resource or key activity to create value for your customers or a channel in which to deliver value. It’s this language of business model design that is so important for our industry to unite around. A common language is one of the most powerful tools a culture can own. RETSO Refocus wants to help the doers of the world master the language of business model generation.

Just because you can, doesn’t mean you should

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Tools, Tactics, & Technology are not the answers you need

Three of the biggest challenges facing your business model are also three of the most frequent topics found at a conference. It’s time to put these into the box they belong in and step away to look at the bigger picture. New doesn’t equal valuable and potential certainly doesn’t mean you should buy it or even try it. 

“Too often I see people latching onto technology because anecdotal information is presented to say, ‘If you just get a single deal, this will make it completely worth your while.” – Jeff Turner

While tools, tactics, and technology could all be valuable to your business at any given moment, it doesn’t you mean should try them all.

So how do you know the difference of what’s worth trying and what’s not? By placing the content before you into the proper context of your actual business model. More often than not, tools, tactics, and technology are simply key resources, activities, or channels within your business model. The most important parts of your business are still missing. Mastering customer segmentation and value proposition will help provide context to the tools, tactics, and technologies needed to properly design your business model. It seems the real estate industry is consumed by shiny object syndrome.

It’s time event organizers asked better questions instead of providing answers to problems no one needs to solve. Enough of the show and tell, let’s just sit down and work together to make something meaningful. Where do we start? By asking the right questions. At RETSO, we required all of our partners to explain what problem do they solve for the real estate industry? We’re going two steps further and asking, What key resource do they provide? and What key activity do they perform? We will continue by asking attendees even tougher questions, such as what bundles of products and/or services are you offering to each customer segment your business model serves?

When will the real estate industry stop the cycle of latest tips and greatest tools?

At RETSO, we’re stopping everything on April 4th. From sitting still, we will work to methodically build your custom business model that will enable you to avoid the distractions and noise. You will leave empowered to describe the rationale of how your business creates, delivers, and captures value. Using a method that has been applied and tested around the world and is used by organizations such IBM, Ericsson, Deloitte, NASA, and many more, we will craft a blueprint for your strategy to be implemented through organizational structures, processes, and systems.

The starting point for our workshop style conference this year will be to establish a shared understanding of what a business model actually is and how do you go about designing the optimal version for your future success. From there, we hope not only to empower you to make a difference in the world but also to be able to challenge your fellow doer by asking the right questions based on the shared language and understanding of business model generation.