According to IBM, every day we create 2.5 quintillion bytes of data — and 90 per cent of the data in the world today has been created in the last two years alone. Ian Campbell takes a look at how this will impact the Real Estate Industry.
Big Data. It’s the new buzz term coming out of every business magazine and blog at the moment. What is it? Well, nothing new really. It generally refers to the use of data to generate insight that translates into business advantage. This has been the primary focus of my working career, so I definitely know that it’s not a new thing. All you have to do is a Google search to see it in action. After you’ve typed just a few letters, it starts to tell you what you might be looking for – just a few microseconds quicker than it could a few years ago.
In the world of search engines, getting people to the website with the information that they need is the key value offering. And the search engine that can do it even just a few microseconds quicker than the competition could mean the difference between being the market leader or out of business. That’s what Big Data is increasingly allowing businesses to do – get ahead of the competition, to be better and faster at giving customers what they want, when they want it. In the world of real estate, Big Data has a lot of potential for creating a competitive advantage.
SO MUCH DATA
As of 2012, about 2.5 exabytes of data are created each day, and that number is doubling every 40 months or so. More data crosses the internet every second than was stored in the entire internet 20 years ago. (Harvard Business Review October 2012)
Take YouTube, for example 72 hours of video are uploaded every minute (Youtube.com) – more content than an individual could ever possibly consume in a lifetime. There were more than 4.7 billion Google searches every day in 2011. (http://www.statisticbrain.com)
YOU’VE GOT DATA ABOUT WHAT?
The variety of data that we are capturing now is mind-boggling. The reason why Google is so good at getting you the information that you need quickly is because it has captured and analysed the data relating to the way we behave while doing the act of searching. For example, it will show you different content based on what you’ve searched for previously, where you’re located, what websites you’ve visited and, if you’re using Google Plus, what your friends are into.
The ability to cross-reference data from a number of different sources is a key feature of Big Data. It’s about building knowledge from multiple sources of data, not just getting more of the same data.
The new tools and devices that we have at our disposal are also snowballing this explosion of data. Australians are adopting smartphones faster than consumers in the US and major European nations. (http://techcrunch.com/2012/05/15/kaiser-worldpanel-android-dominates-smartphone-sales-overall-in-u-s-ios-closing-in/) Our phones and tablets are capturing enormous streams of data tied to people, activities and locations. You have to remember – these devices didn’t exist five years ago.
WE’VE GOT THE DATA: NOW WHAT?
It’s all well and good to have an exabyte of data (1 trillion terabytes), but you have to have the engines to drive it. Enter the Hadoop. Do you need to know what it is? No. Nor would I pretend to be an expert on frameworks that support data-intensive distributed applications (I stole that last sentence from Wikipedia). All you need to know is that they now have an engine powerful enough to push through this enormous store of data and spit out insight at the other end.
The volume, variety and velocity of data that we have at our fingertips mean nothing if you don’t ask the right questions! Enter the role of domain experts.
A CHANGE IS HERE
Data-driven businesses will be smarter, faster and more efficient at delivering value to the marketplace. There are already a number of businesses around the country that are operating as predominantly data-driven businesses. And they’re wiping out their competition. Companies that utilise big data and analytics show productivity and profitability rates five to six per cent higher than their competition, according to research by MIT. My instinct tells me that the opportunity for real estate is in the vicinity of 30 to 40 per cent productivity gains – particularly in sales. Knowing who and when someone is thinking of selling just one day before your competition can mean a huge competitive advantage.
Today’s real estate businesses that are data-driven are disciplined and focused on the accurate collection of data that relates to their local community and the homes in which they live. They know every house, owner, landlord, tenant and buyer. And they’ve got the data to back it up in a listing presentation. These guys are the domain experts. They know the questions to ask of the data. They are pioneering its use to extract insight, and while most are doing it at a fairly simple level at the moment, it won’t be long until you see some significant advances in this area.
But for the moment capturing basic customer data is the starting point for Big Data in real estate. If you’re in real estate now, and you aren’t obsessed with the quality of your database, then you are going to be left behind. And I’m not just talking about getting as many email addresses as possible and spamming them once a week with your listings. In fact, that’s just about the opposite of Big Data – it’s Small Data. If all you have is a name and an email address, your ability to provide value to them is limited to just another email in the Inbox.
At the very least you should aim to collect a name, phone number, email and physical address. These four points of contact allow you to execute an integrated communications plan which will let you tailor content and messaging around geographic interests, at the very least.
Now, a word of warning – don’t go out and just collect as much data as you can. And by no means, go and dump a bunch of data from RP Data or Pricefinder into your CRM. You will just get what I like to call Big Dumb Data. Dumb data? It’s dumb because it actually tells you less about your business than what you knew before you had it.
THE FUTURE OFBIGDATA IN REAL ESTATE
While at the moment the focus is on geographic databasing, pretty soon you’ll start to see some cool ideas come into the tools that are provided to the industry.
Here’s one idea. I’m going to pick on the Open Home. It’s probably one of the most crucial functions that your business needs to get right if you’re going to get the rewards from Big Data. Why? Well, let’s say that you get just one person through your open home, and they’re currently renting in the area, but won’t be ready to buy for a good 12 months. How many salespeople are going to be motivated or disciplined enough to call them back on Monday? While good agents know that they should call everyone back, you’re kidding yourself if you don’t think that this particular buyer example is a typical one that will go through to the keeper.
So what if I could tell you that they were friends with five other property owners within your target market? What if they were friends with a friend that owned six properties and was an influential resident in your local community? Would this change the decision-making process around the callback? Would you bend over backwards to create a great experience for this person, knowing who they were connected to? Facebook’s social graph can make this a reality for your business tomorrow.
And what of property marketing? The industry continues to complain about the constant increase in prices of advertising via portals. So here’s an idea – start databasing your buyers properly! Recently, my mother listed her home for sale. The portals collectively produced 156 views in the first two weeks. Now that’s just page views, not unique browsers. For all I know, 100 of those could have been my mum showing my aunt how well the photos turned out!
My question to the marketing agent was, “How many people viewed it as a result of sending it to your database?” No answer. I’m ashamed to say that it was at this point I felt I could not trust that agent to achieve a premium price. In the age of Big Data, customers won’t trust you if you are not transparent.
Then there’s the world of search engine marketing (SEM) and display marketing. Variable data printing services are also starting to become commonplace. Take, for example, the common ‘Just Listed’ DL card. Variable data printing, in conjunction with a well-maintained buyer database, could literally position the property as a good investment to one person and an ideal first home to another.
Exciting futures ahead for real estate and Big Data!
Ian Campbell has over a decade of experience taking businesses to all new levels of growth across a number of industries. With a background in marketing, data analysis and business process re-engineering, Ian offers a broad platform of experience that assists clients from the real estate, legal, eCommerce and retail industries. Website: icgrowth.com.au Phone: 0411 157 211.
