Does Co-Dominance Spur Disruption?

Outspoken Zillow CEO Spencer Rascoff made headlines this week by using an industry event to publicly describe his arch-rival, Murdoch-owned Move Inc., as “a crappy company.”

There’s no love lost on the Move side either. Move, which operates the Realtor.com real estate listings site, has previously cut off listing fees to Trulia right after Trulia was acquired by Zillow, and now has Zillow in court over its merger with Trulia.

Certainly, the stakes in the real estate listings data business are huge, so bare-knuckle competition isn’t surprising. What is surprising is that both companies are finding success with radically different business models.

Realtor.com has what I view as a very conventional “just the facts ma’am” user interface. It offers basic parametric search, with listings displayed as summary listings, each offering fast access to listings detail. Real estate agents can pay to advertise themselves or highlight specific listings, and are provided with sales leads as well.

Zillow, as you may recall, burst onto the scene with its “Zestimates,” its estimate of the value of every home in the country. This got Zillow immediate interest and tons of traffic, and it quickly became a major player in the market. Zillow also distinguishes itself with a map-based user interface and somewhat different listing detail than Realtor.com. But the “Zestimates” that helped Zillow rocket to the big time are a two-edged sword. Sellers almost always feel they should be higher, and buyers tend to assume they are much more authoritative than they really are. Zillow also sells advertising to real estate agents with essentially the same suite of offerings as Realtor.com.

Does it make sense that both can thrive? Certainly, we see examples of “co-dominance” in many very large BTC markets simply because they are so large. But while more subtle, it appears that the biggest weakness of both sites – neither has 100% of all listings – may be a strength. That’s because lots of people use both products, leaving real estate agents uncertain about where to place their advertising dollars.

It’s the same situation we saw play out in the heyday of the yellow pages industry. Independent yellow pages directories sprung up everywhere as lower-cost competitors to big, established telephone company directories. But advertisers, rather than cheering and running to advertise in the new, cheaper upstarts, found themselves confused and fearful. Which directory did their customers use? Did they use both? Well, the safest course for many advertisers was to advertise in both directories, meaning their cost to reach the same market went up significantly. Not surprisingly, advertisers were not happy with this outcome.

There are rumblings of discontent in the real estate market as well. Indeed, a new initiative called National Broker Portal Project, meant to be run by and for real estate agents and brokers, is gaining steam. It wants to create a major site that will be both dues-funded and run according to rules developed by the brokers themselves. It’s a long shot to be sure, but it shows once again that being the dominant player in a market is tricky, and sharing that dominance is even trickier. We must all remember that disruption in any industry is not inherently a one-time event.

Upping the Data Ante

Step back a bit from the fray and you’ll see an interesting evolution in the world of data: from providing lists of people or entities that might be prospects, to lists of people or entities that should be prospects, based on something they have done (think sales triggers). Now we’re beginning to move squarely into what used to be the realm of science fiction: identifying prospects before they have done anything at all.

We’re blazing new trails here, and pre-prospecting (for lack of a better name) depends heavily on lots of input data and Big Data analytics. The 800-pound gorilla in this space right now is a company called InsideSales that calls its analytical secret sauce “Neuralytics.”

All hype, you say? Well some level of hype is a given these days, but the company has raised over $139 million to date, and Salesforce.com in particular has fallen hard for the company’s pitch, and actually led its most current funding round, that also included Microsoft.

I don’t have any inside knowledge of what InsideSales is up to, but from the tantalizing tidbits that have surfaced in the press, it seems to be a combination of obvious inputs such as social media feeds, plus less intuitive things such as weather patterns and sports team scores. I can only guess that you’re a somewhat better prospect if it’s sunny out and your team won last night, but perhaps these data are being used in a more subtle and sophisticated way.

The other hint I picked up is that InsideSales depends on “email and phone records” to perform its analytical alchemy. Needless to say, these tend not to be public records, so to deliver the holy grail of sales prospecting, InsideSales apparently depends on the holy grail of input data as well!

I’m not dismissing InsideSales, primarily because I am doing some big league speculating here. But I will say there are data sources available today that get us a long way towards the notion of pre-prospecting. What excites me the most is what is going on today with online ad re-targeting. Ad re-targeting is based on what might be described as networked cookies. Visit a site, and a common cookie is placed on your computer. As you move to other sites that are part of the network, ads can be displayed based on sites you’ve previously visited. More importantly, your travels around the Internet can be centrally stored, creating a wealth of information about you, your interests, your habits and much more. While not easy, it is a straightforward leap to start learning about not only what interests you but also what are the early signs that you are beginning to contemplate a purchase.

Privacy isn’t the issue in re-targeting (at least for now), because nobody needs to know who you are for re-targeting to work. But as your movements around the Internet are recorded and analyzed, it is entirely possible that we’ll someday know when you’re thinking about buying something, and perhaps even a little before.

The next generation of sales insights likely isn’t all that far away, so now is a good time to do some pre-pondering on what it might mean to you and your business.

Getting Your Data Into the (Work)Flow

In a fascinating move this week, Salesforce announced a new plug-in offering tight integration with Microsoft Outlook. This new capability, still in beta release, is offered free to Salesforce customers with its Enterprise plan or higher.

Why is this fascinating? First of all, Salesforce compete head-to-head with Microsoft in the CRM space, so this is arguably a shot across Microsoft’s bow on that front. But more importantly, it’s showing the growing importance of both applications and tight integration to data publishers.

One of the great weak spots of most CRMs has long been email integration. Getting email from one’s email client to the CRM has tended to be clunky and far from automatic. Getting salespeople to send email from the CRM tended not to be practical, and nobody wanted email messages spread across two systems.

This new integration from Salesforce doesn’t magically solve all these issues, but it’s a big step forward to making the user’s preferred systems and processes more powerful. And that’s exactly the mantra we’ve been preaching to the data industry for many years now. Get into the user’s work environment and get in deep. This is a great example of this principle at work. And even better, the many data publishers already leveraging the Salesforce platform can leverage it immediately and for free.

This brings up a larger discussion about data publishers becoming dependent on third-party platforms. Sometimes it makes sense and sometimes it doesn’t. And part of that decision process involves an honest assessment about whether or not you can reasonably achieve deep embedment like this yourself.

Another useful point this new plug-in highlights: for all its issues and flaws, email isn’t going away anytime soon. And because it is arguably the most core workflow tool at most companies, it is arguably the most important place to seek to embed your data … provided your data makes sense in this context.

Google Disrupts the Insurance Business

Google’s recent entry into the insurance industry (not as an insurer or agent, but rather as a discovery and price comparison tool holds some useful insights for data publishers.

In brief, Google is working with a number of auto insurance companies in California (it has national expansion plans of course) to help online shoppers easily find policies and compare rates. While exact specifics were not disclosed, it appears that this venture has a lead generation model, where Google will be paid for referring leads, although some published reports suggest Google will receive a percentage of the actual insurance premium from sales it generates.

Google is reportedly working with 14 auto insurers in California, but few of them appear to be the household name national auto insurers, at least for now.

This initiative is unquestionably disruptive to the insurance industry, which may explain why those insurers with the least to lose seem to be the majority of the early participants. After all, participating in this venture not only means giving up lots of valuable data to Google (who some predict has designs on becoming an insurer itself), but it’s a potentially large new marketing expense. Most significantly of all, it further commoditizes auto insurance, as Google makes it even easier for consumers to buy strictly on price.

What’s intriguing from a data perspective is that Google has partnered with insurance companies, in large part to get the data it needs. Certainly Google needed to get rate data directly, but it also needed comparable policy data to make meaningful side-by-side comparisons. In short, Google couldn’t find what it needed on the open web. I’m hearing from an increasing number of data publishers that Google is licensing their data primarily because it can’t adequately structure content to deliver the user experience it wants.

Secondly, we’re seeing the hidebound and opaque insurance industry showing willingness to cough up real time pricing, to be used in an environment where consumers are encouraged to buy on price. That’s no small decision, and I think this is a harbinger of things to come, as companies come under increasing pressure to do the unthinkable: provide pricing transparency online. And that means that we could shortly be seeing more price comparison sites in vertical markets, and these are true data-driven opportunities.

Looking at all these pieces, what I see is that Google is forcing change in the whole area of vendor/product feature and price comparison. But Google doesn’t have the finely structured data it needs to push into these markets. It seems to me, that with the essential data in hand, and a respected and neutral market position, data publishers can follow Google’s lead and cause a little disruption of their own. 

Evolving From Tools to Hands

I recently learned about a company called LeadGenius that styles itself as an “end-to-end sales-acceleration solution.” What that means is that you tell LeadGenius about your market, and they take it from there: identifying leads from business databases, scoring them, sending promotional messages to them, right through to appointment setting – all duly reported to you in the CRM system of your choice. It’s obviously an appealing concept, and it may also suggest the next level for data publishers. Data publishers have built stronger and more profitable businesses by building tools around their data and injecting themselves into client workflow. But what’s next after that?

If LeadGenius represents where things are headed, the answer may be to not just fuel prospecting for our customers, but to do prospecting on their behalf. It’s not as wild a concept as it might sound. Indeed, many B2B media companies have pushed hard into a new business called “marketing services,” which can include just this.

Does it make sense? Well, talk to data publishers and you’ll quickly find that a key frustration is that they are providing much more sales intelligence to their customers than they know how to fully use. You’ll also hear endless horror stories about customers who squandered great leads or missed big opportunities. Perhaps sales prospecting (and we’re talking about developing live prospects with an expressed buying interest, not closing the sale) belongs with the organization that understands it best.

It is also worth considering the appeal of a service such as this in our app-driven world, where anything can be obtained with a few clicks. In a nod to this, LeadGenius offers its own API through which customer projects can be ordered and managed. Someone who offers to do the work tends to be more appealing than someone who wants to help you do the work yourself.

Of course, it’s speculative to discuss where things are heading based on the example of just one interesting company. But in our pay-per-click, cost-per-action world, is this really so difficult to imagine?