With about 2 million active real estate licensees in the United States, companies who specialize in products and services for real estate agents play in a big market. If you have a website that is visible to the world in any meaningful way (you show up in Google search results), no doubt you field cold calls from salespeople every day.
When you’re ready to buy, how will you determine whether you’re getting something you’ll be happy with over the long run? Before becoming a Realtor, I spent two decades working for technology companies, most recently as an executive for a software company. I’ve been on both sides of the vendor evaluation process – selling software to prospective customers and evaluating software and tools we needed to scale our operation (such as CRM systems, email service providers, and a wide range of marketing tools).
These days, I spend considerable amount of time evaluating vendors and products I believe will help me run my real estate company more efficiently. Here’s how I do it.
Prioritize Product Features and Service Offerings
Over the years, I’ve found that a methodical and structured approach to vendor and product evaluations helps me find the best service or solution for my operational needs.
Well-designed products and top-quality service providers already know how to solve a lot of challenges you face each day. But companies often differ wildly regarding their offerings because:
- Some have done a better job developing their products/services than others, mostly based on the degree with which they get customer feedback and incorporate that feedback into their product.
- Newer companies usually have fewer features than mature companies merely because they’ve had fewer development hours to create all the bells and whistles you’ll probably want or need.
- Older companies may have slow systems or outdated products because they’ve not kept up with the latest trends or rebuilt their legacy systems using the latest technology frameworks (they’re stuck on a brittle, technology stack).
At the end of the day, you want to find a solution that scratches your itch. And, the best way to get started is to create “buckets” of features you know you want and prioritize them.
Bucket 1: Must Have Features
These are the features you really, really must have. Said another way, the absence of any product feature or service offering in the ‘must have’ bucket would be an instant disqualifier – a total deal breaker.
Bucket 2: Nice to Have Features
These features are things you’d like to have but are not ‘mission critical.’ You don’t want to live without them, but you could live without them. Often, features that fall into this bucket are ‘shiny objects’ that seem really appealing but have little bearing on improving your business or solving a big business challenge.
Separating ‘must have’ and ‘nice to have’ features can be tough. It’s human nature to want everything, but separating ‘must have’ from ‘nice to have’ will make your final decision much easier. In fact, the process of putting each feature into one of these two buckets removes the sting of the whole process, making it a somewhat dispassionate exercise. Prioritizing this way can bring a little psychological relief.
Cost of Ownership
Calculate the total cost of ownership. What do I mean? Factor all the things (excluding human capital) you’ll need to make this product work for you beyond the published service fee or product’s price.
Here are some things you can ask yourself that will help identify the true cost:
- Does this product do what I need it to do straight out of the box? Can I configure and customize this product to reflect my reporting needs? If not, what are the fees or hourly rates customize it?
- Who does the customizing, the vendor or third-party developers? What do they charge per hour?
I like to do quite a bit of homework before getting on a call with a salesperson. It’s better to steer the conversation toward things that matter to you the most: your ‘must have’ and ‘nice to have’ features. Otherwise, you risk being a passive participant on the sales call, getting only a salesperson’s canned pitch and propaganda.
Start by reading the help section of a potential vendor’s website and pore over the product documentation. Learn what features exist, how they’re configured during the setup stage, and how each works once launched. You’ll also learn whether the company’s product documentation sucks – most IDX vendor documentation is unclear and often poorly worded, which is too bad. Frankly, help documents are an oft-overlooked area of a website that does a lot selling to prospective customers (savvy ones, anyway).
You may also learn about features you didn’t know existed, and after reading about them, you might decide to add a few to your buckets.
I like to join a vendor’s Facebook group before a sales call, too. You can learn a lot about a product from how the existing customers use it and talk about it. No product is perfect; surely there will be complaints. You’ll have to decide if the complaints are legitimate or not (e.g., small, easily fixable issues or significantly bigger problems like consistent server outages).
Using Excel (or any spreadsheet program) is the easiest way to keep track of ‘must have’ and ‘nice to have’ features. I’ve attached a screenshot of a spreadsheet I recently used in a recent IDX evaluation.
Download this template for your own vendor evaluations.
The Sales Call
When you’ve created your buckets and done some initial homework like reading help docs and joining Facebook groups, it’s time to schedule some sales calls.
During calls, you’ll find out how well the company’s salespeople know their platform, features, and benefits. The two sales representatives with whom I spoke were both really, really good. You’ll get a vibe pretty quickly whether the company has their act together or not. A well-run sales team will NOT put a person on the phone who hasn’t been adequately trained on the product itself.
Since you came to the call extremely well-prepared, it’s time to get to it! Riffle through the list of features you outlined and ask questions along the way. Remember: you’ll get much more out of a product demo or services pitch if YOU are in the driver’s seat. You’re the interviewer!
Real World Vendor Evaluation Example
I own and operate a few real estate websites on the west coast that carry property listings from in Vancouver to Los Angeles. Recently, I decided to build another site in a new market. To minimize start-up costs and get live quickly, I decided to use WordPress for the CMS and add a turnkey IDX solution. But which one?
Typically, I take the template with the features I outlined above and just add in the vendor names to the top row. For this example, I kept the vendors anonymous since software changes frequently and I do not want to misrepresent product functionality if this post is referenced at a later date.
Any vendor who showed up in the “Must Have” section with a negative mark (in this case, denoted by a red character) was eliminated from contention straight away.
You’ll notice the spreadsheet above is incomplete. That’s because I don’t always need to complete the column before I know the particular vendor would not work out.
Two IDX providers were eliminated early:
- Vendor 2 – Their product documentation revealed that their platform only allows a website to display property listings on subdomains. I do not like that setup. Period.
- Vendor 4 – I filled out most of vendor 4’s information from memory because I’m familiar with their platform and think it’s a great product. However, they don’t cover the MLS in the new market where I’m trying to launch a site, so they were (unfortunately) also out of contention early on. If/when they add the MLS board I’m interested in, I’ll take another look.
Vendors 1 and 3 remained. I took sales calls from each.
- Vendor 1 – When I read their marketing collateral and help docs, I was confused about their different products, but the sales rep explained each. What I learned was that I’d need two of their offerings to create the kind of integration I wanted on my website. You can see in the spreadsheet above, subscribing to two products knocked the price way up. I didn’t hear any other features or benefits that could justify the higher monthly cost.
- Vendor 3 – This was the IDX solution that came closest to matching all the features I wanted. The price was quite reasonable, as well.
Take out the guesswork for vendor evaluations by surfacing what you really need to solve your business challenge(s) from things that might sound great but are not as critical. Then do a little research so that you’re prepared to ask a lot of questions when you speak with sales representatives. If you follow a process, you’ll be more likely to find a solution that best meets your needs.
About the Author
Tony Mariotti is a Realtor® in Los Angeles, California, a sought-after real estate blogger, and digital marketer.