For many travelers and restaurant patrons, it has become almost a reflex to go online first to see what other people have to say about hotels and places to eat. Indeed, many companies regard online customer reviews as a crucial component of their marketing.
In real estate, not so much. Only a few online outlets within the business encourage customers, satisfied and otherwise, to speak their minds.
The Houston Assn. of Realtors — regarded as practically avant-garde for its innovations in an industry that has been famously resistant to change, particularly online — began encouraging agent reviews two years ago.
A handful of independent websites such as Zillow allow various forms of agent ratings. A few brokerages and trade groups are tinkering with test versions of ratings, but in general the business regards the potential damage of negative agent reviews as a hot potato that "the other guy" ought to be the first one to deal with.
ZipRealty Inc. recently drew national attention in the industry for announcing it would post unfiltered agent reviews — good, bad, indifferent — from consumers. Lanny Baker, the company's president and chief executive, explained how he hoped the practice would help differentiate his company and build customer engagement:
Why did you decide it's time to allow an unfiltered forum on your agents' performance?
We've been collecting reviews of our agents since 2002, but not in this context. We've been using them for two things: Our agents receive a bonus when their clients are completely satisfied, and the reviews gave us data that we could use to market our services, to talk about our high level of customer satisfaction.
Things have changed in 10 years, that's for sure, starting with stuff that Amazon.com was doing with product and seller ratings. More recently, things like TripAdvisor.com and Yelp.com obviously have brought, to use a buzzword, the idea of "the wisdom of crowds" to service providers and products. There's a growing social responsibility to rate service providers. Today's college students are picking colleges based on online reviews. They pick professors and courses and dorms based on online rating reviews. Online reviews have become one of the most trusted third-party information inputs for big decisions.
How did you set up your review system?
We spent months surveying consumers and did focus groups and online surveys; we queried people who had worked with us and people who didn't work with us. They told us, loud and clear, "We want a ratings and review system that's transparent and authentic."
We asked, "If you encountered an agent online and they seemed knowledgeable about what you're looking for, what's the No. 1 thing that would lead you to call that agent or engage with them?" By a mile, it was authentic ratings from other customers who have worked with them. The No. 2 thing was concrete evidence that [the agents] are involved in the thing that I'm interested in — my town, my neighborhood, short sales, working with first-time buyers, etc.
We also asked them, "Let's say you got a referral from someone. Would you Google that agent?" Eighty percent said, "I am going straight online to look for reviews." It was resounding.
How do the ratings work?
If you take the Yelp system as an example, there's not often a case where somebody would go into a restaurant and not eat the food but still leave a rating and review. But in the real estate business, you might call up an agent and get advice from them, tour homes, learn from them about a neighborhood, but you might not have a closed transaction. Sometimes people work with agents and closings don't happen, or haven't happened yet, but you still have your own opinion of the agent's performance.
So we decided that to be able to post a review, you have to be a registered user — we have all kinds of data that tell us that you're actively working with one of our agents. If you're trading emails, visiting homes, writing contracts, we have a good window to that. If you were just a friend of an agent, you couldn't log on and say, "Go work with this agent." Agents can't write their own reviews.
And we think that in verifying the authenticity of the consumer, we're including data that can help others decide if their reviews are helpful — we can indicate that the reviewer (identified in the review by first name) was a first-time buyer or an investor or somebody seeking short sales. Consumers reading the reviews can use that information to help narrow down their agent search.
How do your agents feel about the reviews?
They're starting to embrace them. We don't require our agents to participate. We have about 1,700 agents in 20 metro areas, plus 200 to 300 agents who work for other brokerages but use our technology.
We've gone from a 5% adoption rate at the soft launch of our ratings about two months ago to about 54% adoption right after the official launch at the end of May.