Last week Blackberry/RIM and Best Buy were two businesses that went on a list of dying companies. It’s often hard to predict what the future holds, and we have a tendency to get tunnel vision when it comes to our own businesses. It’s unfortunate these companies have found themselves to be in dire straights, but for me I look at situations like this as an opportunity to reflect on my own business and industry. What may look like a solid model today, may not be tomorrow. With that, I’d like to share my list of five multifamily marketing/tech models that may be in trouble.
1. The ILS (Internet Listing Service) – I’ve actually been known to say that the ILS is an absurd marketing idea. While I may have been trying to generate some controversy with that statement nearly 3 years ago, it’s interesting to think today I actually believe the ILS model is in trouble a bit. At least the way the big players look today. If you look at Apartments.com, ApartmentGuide.com, ForRent.com, Rent.com, Move.com, etc., you’ll find their models really haven’t changed much since they started. However, the way people search online is changing. We may see a few fall off over the next 5 years if they don’t evolve in an aggressive way.
2. Pay Per Lease Marketing Model – As tracking becomes more sophisticated we’re finding (and concluding) renters are using more than one source to find an apartment. Is it fair to give all the credit to a single source and pay them a premium for it? I say NO FRIGGIN WAY! Marketers are getting smarter and this model is a gimmick that has taken advantage of people for too long. I think this fad will most definitely pass in the near future as pay per lead or flat subscription pricing will win.
3. Phone Tracking Services – Now, before Mike Mueller comes after me on this one I’ll just say that I really hope he has something magical up his sleeve for this space with his new acquisition. I’m just sharing what I know and foresee here. If people are dropping their ILS expenditures, like Bozzuto (and J.C. Hart), then the demand/need to track phone calls will go down. Fewer numbers needed and alternate ways to do it. That, and new sophisticated business phone systems can do it in house. No need to outsource this service if you don’t want to. Larger companies will begin to bring this in house and many others will follow as the equipment gets more affordable.
4. Proprietary/Closed-Source Websites – The speed of technology advancement and the Internet today is difficult to keep up with. New devices (tablet, phones, etc.), new apps, and new social networks move too fast for many closed-source web services to keep up with. With open-source websites, however, a crowd-sourced larger effort is made to keep up with these tech advances. It’s just a scale issue and it compounds every year. Before investing in your next website just keep this in mind. Ask not what they can do for you today, but what they can do for you a year from now. (P.S. – Ask them what they will charge you for those innovations a year from now as well.)
5. Closed-Source Software & Services – Hey, I get it. Keep it all in the family, don’t easily integrate with anyone or any service, and nickel and dime people to access their own data. Sounds like a profitable business model. However, it’s all changing, and open-source services are helping many businesses with their sales tracking, accounting, email, and other miscellaneous business functions at a fraction of the cost. Software for the multifamily industry is actually not the norm in this area, but that could all change.
I’m sure I’ve missed a few. Agree? Disagree? Would you like to add any? Let me know, and we can discuss some more when I see you AIM 2012! There’s still time to sign up by the way.