At a recent closed door event in Boston, Greg Schwartz, President of Media & Marketplace at Zillow Group, spoke to approximately 100 top agents about Premier Agent 4 that has begun its implementation phase in select marketplaces.
I was fortunate enough to be part of that group and hear first hand what Schwartz had to say.
Zillow is now connecting an agent on the call 100% of the time with a lead. Someone from Zillow is on the line, and connects you with the lead directly. They give some background information, including the properties the client is interested in.
Why is Zillow making these changes?
Well, based on studies done over the past year, Zillow found some startling statistics.
Zillow found 20% of the Premier Agents have NEVER answered a lead from Zillow.
In addition, 49% of consumers who use Zillow and request more information, have NEVER heard back from an agent on the property they clicked on.
That’s right. Agents are only responding to Zillow leads half of the time.
Those are mind-blowing statistics, considering Premier Agents are PAYING Zillow for leads.
Zillow reached out to consumers and collected over 750,000 surveys. When asked what is the most important thing overall when in the market to buy a home, 80% said responsiveness.
Now, compare that to the 49% of consumers who said they never got a response from an agent, and it makes complete sense why Zillow decided to make changes.
Breaking it down even further, here’s what survey responders found most important during each stage of home search:
During the initial stages of property search, the number one thing consumers look for is connecting with a KNOWLEDGEABLE agent.
When engaged in a property – actually going out and looking at homes – the number one factor consumers want from an agent is RESPONSIVENESS.
When closing the transaction, the consumer believes TRUST is the most important factor.
Schwartz made a great analogy at the conference: If you buy batteries from Amazon, and they only show up at your house one out of two times that you order them, you would stop going to Amazon. Zillow does not want the consumer to stop going to their site. They are very passionate about making sure people continue to use Zillow.
With the results they got from surveys, Zillow created a five-step plan to improve Premier Agent.
And number one on that list is making consistent connections happen. Meaning, if someone requests more information on Zillow, they will be connected to an agent live on a phone call every time, which has already begun in some market places.
They also plan on aligning buyers with top performers, creating an algorithm that will allow newer agents to get leads and honor the agents who are responding to the most calls.
Here is where the conference got tense. There were a lot of agents in the room very frustrated with Zillow.
Schwartz admitted that in Quarter 1 of 2018, leads in certain areas became way too expensive. In some zip codes, more agents were paying for leads, causing prices to increase. And without enough leads coming in to those zip codes, the amount these agents spent could not be validated.
There are documented agents who received a refund because their estimated amount of leads was so much higher than the leads they actually received.
Now, with this new plan, leads in some areas are decreasing even more. The ones who are in marketplaces where the new Premier Agent has been implemented, have seen their leads from Zillow DECREASE AS MUCH AS 75%.
Agents with huge teams, who are paying Zillow a lot of money, are seeing these decreases in leads and are not happy about it.
Here’s what I’ll say to agents relying heavily on Zillow leads:
It’s time to start investing in your personal brand.
Some people have 30, 40, up to 50% of their gross commissionable income coming from Zillow. That, to me, is crazy.
Just like you you don’t want to rely heavily on Facebook, don’t put all your time and money into Zillow. You don’t own these platforms, so when they change their procedures or algorithms, it is going to impact your bottom line.
Produce more content. Whether it’s local or national, pour into your brand so you’re not relying solely on Zillow.
The focus on brand and content marketing is a much longer play. You might be two years in before you start to see results, but the results are going to be so much bigger.
My team has seen this happen. Most recently, we secured a development on the Connecticut shoreline – an $80 million sellout – that stemmed from creating relationships and having brand and content to back up our work.
These changes are not going away. The tension in the room with Greg Schwartz was real. And it tells me that Zillow is going to do whatever it takes to give their consumers what they want.
Jeff Bezos, founder of Amazon, has a famous quote: “Your margin is my opportunity.” He doesn’t care who he puts out of business: if it’s good for his consumer, he’s going to do it.
You know Zillow is thinking the same way.
Watch the full Real Word episode on this topic here.