Start With A Win - Successfully Managing Client Relationships with First

Episode Date: March 18, 2020

In 2016, Mike Schneider and his team set out to build a better marketing platform, but before long they realized that what they had really created was an opportunity to integrate machine learning into real estate customer relationship management. Every listener of Start With A Win already knows that relationships are the key component to being an effective real estate agent. What you might not know is that almost 80% of individuals only talk to one real estate agent when looking to buy or sell a house. If you have the first conversation with those people, you are more likely to get their business, but you could be missing up to 70% of the listings in your existing network.First is able to combine all of your contacts from all platforms into one comprehensive database and seamlessly curate additional demographic data to provide agents with predictions about when someone in their current network is likely to be in the market to buy or sell a house. Think about how much more productive your day could be if you were able to convert one out of every six conversations instead of one out of every 17. The First app gives you a competitive advantage in your market, nudging you to connect with contacts who might be looking to make a move and helping you prioritize your follow-ups.Links:https://www.first.io/“Inspired” by Marty Cagan: https://www.amazon.com/INSPIRED-Create-Tech-Products-Customers-ebook/dp/B077NRB36N“Measure What Matters” by John Doerr: https://www.amazon.com/Measure-What-Matters-Google-Foundation/dp/0525536221 Connect with Adam:https://www.startwithawin.com/ https://www.facebook.com/REMAXAdamContoshttps://twitter.com/REMAXAdamContos https://www.instagram.com/REMAXadamcontos/ Leave us a voicemail:888-581-4430

Every day is filled with choices. You're here because you're choosing to Start With A Win. Get ready to be inspired, learn something new, and connect with the win nation. Top of the 12th floor, Remax World Headquarters here in Denver, Colorado. Adam Conta, CEO of Remax with Start With a Win. In studio, producer Mark. How you doing, buddy? I am doing awesome. Thank you so much, Mr. Adam Kantos.

Hey. Wow, that was official. Well, you're an official guy. Do we have to get official on the show? This is an official podcast. Oh, it is. It is. It's officially in the iTunes and Google Play. That's right. It's everywhere. Anywhere you get your podcast, you can get this podcast. Oh, it is. It is. It's officially in the iTunes and Google Play.

That's right. It's everywhere. Anywhere you get your podcast, you can get this podcast. Whoa. That's right. And today, officially, we have a special guest in studio with us today. Remax has the newest member of the family of brands first, which is an East Coast company that just entered the Remix family of brands. We have the co-founder and CEO of this North Carolina-based tech company, Mike Schneider. How are you doing, buddy? I'm doing awesome. Thanks for having me. This is exciting. Glad to have you here. This is kind of a lot going on here today, isn't it? It is. Yeah, we've got the whole company on site getting on board. It's exciting.

Yeah, yeah. I can't wait to spend time with the whole first crew. Obviously, we visited in the past and things like that. But let's start kind of unpacking this whole thing because people are like, what's first? So let's just start with that, Mike. What is first? It's really cool. It's a really simple mobile app that actually helps you win more business from your existing network.

And really, it does that in three ways. It helps you build a better database. It helps you find your likely sellers that are in that network. And then it really helps you master your follow-up. And those are the three things that we do really well. I'm all about doing more business out of my existing customer database, my, you know, the clients that I've built relationships with, that I cherish, that I, you know, obviously so carefully protect, like so many people in our business, the real estate industry, as well as other industries for that matter. You know, your asset is your relationships. So, I mean, how did you get to this point? I mean,

you guys didn't start by doing that, did you? You know, we always firmly believed that the agent relationship and their relationship network was their core asset. But we had a really different product approach at first. We thought that we were going to build a better marketing platform because there's so much data about everyone, right? And you can send a better message to someone who's a downsizer maybe than someone who isn't. And so we thought, we're going to build this really cool marketing platform that's going to just blow people's socks off in terms of how it connects with the consumer. And what we quickly learned, because we're a very data-driven company, as we looked at what was being sent out, was that if agents hadn't had

a conversation with someone in the six months leading up to a listing, it didn't matter what you were sending them. And so our whole product focus shifted. And we'd always been identifying who was going to sell, but our product focus shifted from sending out more or better marketing to how do we actually get agents to have a conversation with the people that they should be talking to this week. Okay, so some important key points there. If agents haven't spoken, like verbally connected with somebody, is that safe to say? That's the key. And we want you to be the first one to have that conversation when people are thinking about selling. So you hear a lot of buzz around machine learning and predictive analytics.

We're best in class at identifying who's going to sell. So what do you do with that knowledge? You want to be the first one to make a relational connection because you've seen this over and over again. Almost 80% of consumers only talk to one agent. I'm sorry, say that one more time. Almost 80% of consumers, especially on the listing side, only talk to one agent. The first agent that talks to them wins that business. And it's not about, hey, Adam, are you thinking about selling your house? It's about making a relational connection first. So relationships matter is what you're saying. They do, but you can't manage 3,000 of them at the same time. Okay. Let's talk about that for a second. So I think I have roughly 3,000 contacts in my, let's call it in my phone. Okay. And I get up in the morning and the question is, who do I call, right?

That's right. Call, text, Facebook message. I see a lot of agents doing all that, but who are you going to connect with today? How do I pick that? I mean, how do you get to the point where you can say, here's who you should talk to? Because that's really what your company's about is taking and highlighting those relationships that need to be immediately addressed in order to win that business, right? Yeah, it was a really fun journey because we had to solve a lot of really hard problems to get to that point where you can just wake up in the morning and know who to call. So the first one is you've got 3,000 contacts, but oftentimes they're sitting in siloed different

CRMs or your email or an old email from Yahoo and your phone. And so the first thing we do is we make it three clicks simple to get all your contacts in one place. So we'll take those contacts from your phone, from your email, and then we actually add the property addresses for where they live. So now I know that this contact isn't just someone that I coached my kid's soccer team with five years ago, right? But I know that they have a $750,000 home, and now I know that they're actually thinking about selling. Okay. Back up the bus here for a second. This is really fascinating. I'm intrigued because I might have somebody's first name, last name, and phone number, or first name, last name, email.

That's right. Or just say first name and email or something like that. And you're telling me you guys go out and- We build your database. We're going to go fill in property addresses. And the other fun part of that is I'm a firm believer that until you can measure something, it's really hard to improve it. And so for the first time ever, as now a REMAX agent, if you say your contacts with first, you're actually going to map out your network. And you're going to be able to see of those 3,000 contacts, I now have 1,600 that have addresses. And by the way, 82 of them listed last year. And I won 20 of them. Oh, what happened to those other 62?

Yeah, that's the unfortunate part. We're seeing across our agent base, even most productive agents are missing 70% of the deals in their network. So you're going to show me this other two thirds. How are you going to show that to me? What are you going to tell me? Yeah, so it pops into the app and we'll say, hey, your friend down the street just listed. And some of them you'll say, well, I don't really know him that well. But every now and then there's going to be some that you realize, if I just picked up the phone, if I just picked up the phone, I bet I could have won that one. And that's what we're seeing is driving a tremendous amount of engagement

on the platform. So that's kind of a punch in the gut for a real estate agent when you drive past somebody's house and you know, oh, I helped them move before, or that's an old friend, or hey, their kid's on my kid's soccer team or something like that, and you see somebody else's sign in their yard, or maybe just saw it after the moving truck was out there or something like that. This allows us to recognize potentially some of those opportunities. Now, how accurate is that when it comes to recognizing those opportunities? Because it seems like there's some sort of magic dust behind this or something like that going on. How do you do this? No, that's kind of the other really hard problem is that there's a lot of data available about all of us. And we want to make sure that A, that's treated in a way that's

leading the industry in terms of data privacy and that we're abiding by the best us. And we want to make sure that, A, that's treated in a way that's leading the industry in terms of data privacy and that we're abiding by the best standards. So we always remind agents that their contact database is their data. We're never going to share that even with their broker, right? These are your contacts. But then we have so much data about those consumers on the back end that we can use to pinpoint who's showing signs of moving. So it's things like demographics and life events are happening, right? When someone has income increases or job changes or a new addition to their family coming. And these machine learning models are able to piece through that.

And agents do this all the time, right? If you are an agent and you see that someone got a new job or they're having their third kid and they live in a two-bedroom house, you know that they're probably thinking about selling, right? What computers are able to do is they're able to look at all those factors across 214 million people every month and track all the different components. And so what's available today with the compute power could not have been done 15 years ago. It just couldn't have been done because we're able to look at not just how certain factors contribute, but the machine can look at all of the things going on in a person's life. So it's never really one factor, right? If my wife and I were having our third kid, that factor alone might make us one and a half times likely to sell. But if you factor

in that we have a townhouse with two rooms and X income and all the different components, that's where the machine can now say this person's five times likely to sell. So you asked how good is it? We're able to connect agents with people that are going to be selling two to three times as frequently if they focus on the people that we highlight. So think about that. If you were going to go, in most areas, it's 17 to 20 people move, one in 17 out of 20. And so you'd have to connect with 20 people to maybe get one. And if we can change those odds to where every fifth or sixth person that you talk to is moving, that really boosts the number of listings you're able to win.

So you're basically cutting my workload by two-thirds. We want you to work smarter, not harder. And so you see that in everything we're doing, whether that's cleaning up your database for you. We don't want you to have to spend hours and hours. Agents are phenomenal relationally. We want you to spend as much time connecting with people, and we want that time to be as productive as possible. So yeah, if we can cut your workload by two-thirds or help you win the same number of listings in a third of the time, that's pretty exciting. This is awesome because when you take a step back and you think about this, and you

mentioned it, what are agents the very best at? Managing the relationships, closing the deals. That's right. So everybody spends so much of their day, and I don't care what business you're in, you spend a lot of your day kind of running around doing things that don't manage a relationship with a customer or close a deal. So that's why a lot of people hire assistants, inside sales associates, the different companies that have call centers, things like that, to try and do some of this. But ultimately, it's not you managing the relationship. It's somebody kind of taking the relationship from you to try and cultivate it a little bit and give it back to you. So we do see some decrease in relationship value there.

But first, just get you focused on the thing that you need to be doing, which is managing the right relationship at the right time. I'm really intrigued by this. How did you end up, you know, you started as a marketing company. You end up at this point. What were some of the challenges you had to overcome in order to get to this point? You know, I think the biggest challenge for any product organization is really getting close to your customers and understanding their workflow and understanding what's going to work for them. It's great when, you know, the first year when we had the real results on the model and it was amazing how accurately we could identify if

people were going to sell, I was jumping up and down, but that doesn't mean that it helped any agents that day, right? Because if you hand an agent a list of 150 people for them to call, most of them will stick it in a drawer and forget about it. And the biggest challenge was, how do you build a product that fits in my daily workflow, that's easy, that's fun to use, where I actually feel progress? And it was amazing building a world-class product organization behind some great product leaders where we started iterating. And I'll tell you, they stripped our product down to about a third the size and our engagement went through the roof. And it's all mobile. And it's kind of like a little intelligent coach that's telling you what to do every day and reminding you to set that next step after you have that first

conversation and nudging you to actually connect with these people that have been three stars in our system. They're likely to sell and you haven't talked to them in six months. So getting to a product that agents really loved and that was a part of their day to day, it was really the biggest challenge. And I think the biggest win that we saw over the last few years. I love this. So it's kind of an Apple philosophy that I hear. We all study these different companies in business school and look at some of the principles that they followed. And one of those that Steve Jobs followed was when he came back into the organization, he took all these different product sets that everybody was spending so much time on and scattered focus and brought it down in just a handful. And that's what you do with the tasks of the agents when it comes to managing

their relationships and their customer list. So you get it to that point, you refine everything. And how long has First been in business now? A little over four years. relationships in their customer list. So you get it to that point, you refine everything. And how long has First been in business now? A little over four years. From the first year to now, how much more powerful, because machine learning continues to learn, right? Every month it gets better. So how much more powerful is this and why? Help the audience that don't know anything about machine learning or these algorithms or anything like that, help us understand how this improves itself and where it's gone from to now. Sure. So I think the simplest way to describe machine learning, if we want to geek out for a minute here. Let's do it. Humor me for a second. In the old way of programming, you would say to

a computer, hey, here are the rules, right? Now I'm going to feed some data in. Now you tell me the results, right? So I'd say, hey, if someone is, has three kids, et cetera, et cetera, here's the rule. If someone is this, then X, right? And then you feed it data, you get the results. And that's kind of cool. You can do some interesting statistical things. What's fascinating about machine learning is that it's exactly the opposite. You say, here's the goal I want to predict. Here's what I want you to figure out. I'm going to give you a ton of data and you figure out the rules. And the machine, because it knows the outcomes. So the outcome in this case is very simple. Did they sell or did they not in the time we predicted, right? And the machine takes all of

this data that we know about everyone and feeds it through and it builds the rules. So we didn't tell the machine to look for people who are getting separated, but it's actually pretty good at identifying when people are getting separated. It's kind of crazy because there are things that are happening with people's spending or where they're going. It's kind of crazy, right? So there are different rules that pop out of this. And so every month the machine has more data points, because it tracks those 214 million people each month. And where do these data points come from? Obviously, you can't get into the intricacies of this, but give us some overview of some of

the secret sauce here. Yeah, I think, again, we pride ourselves in leading the industry in data privacy and security, and we've partnered with very reputable data partners. You know, there's a lot of, I think, worry about how people are using data. And there are really productive ways, again, to apply data to business contexts like this that can make a whole industry more productive, right? And so we partner with some of the largest data providers. These are the same data providers that power a lot of Fortune 500 companies to better target their marketing, right? To help people find what they're looking for or fit the right match. So we've partnered with those and we've been working with them for four years.

And I think we're some of the best clients now. This has taken you four years plus to build the machine learning, the brain of the whole thing that comes to work 24-7 and continues to learn. Is it possible for somebody to come in and just throw the switch on one of these companies today, or does their machine have to learn like yours did? Yeah, they won't get the same performance, that's for sure. If you started today and you knew everything we knew, you know, it took a couple PhDs on our team years and years to kind of tune all the parameters. It's called supervised learning. We're watching the result and we're tuning it. We're helping it learn. But no, you couldn't do it without four years of monthly snapshots of data that we now have and all the iterations. You can have a model. It just might not be very powerful.

Interesting. Where's this whole philosophy going? Where's machine learning going? Everybody wants to know. We've seen the Terminator movies. Well, you know, I think I had a fun opportunity to talk about this on stage at Inman, and I got to go last, which I love. It was a panel of all these other machine learning companies. And I said, you know, I'm really excited when we stop selling predictive analytics and machine learning. Because, again, it's not about the engine. You know, how many of us bought a microchip last month? You brought up iPhones. We buy iPhones. We buy Fitbits. not about the engine. How many of us bought a microchip last month? You brought up iPhones. We buy iPhones. We buy Fitbits.

We buy the product. So I think every company and every product is going to have machine learning built into it. But it's not about that. It's about what value are you delivering to the user. And that's why just as important as how powerful the model is over four years, we have four years of iterating with thousands of agents that are high producing agents and figuring out what's the workflow, how many people should they follow up, what are the nudges that this coach gets them to get up in the morning and actually do the things they need to do. Because you really need to focus on the outcomes, not the outputs, right? We're really good at predicting who's going to sell, but getting agents to actually follow up and win that

business is where we would really win. So I'm just as proud, maybe more proud, of the product learnings over the last four years that you just can't replace that. Awesome. All right. What advice do you have for REMAX agents? I think REMAX agents, one of the reasons we were so excited to join the family is we have the most productive agents. And we have seen that their you know, their core asset is their network. And if you just

focus your time there, again, we can help you either win the same amount of business in a third of the time, right, or add three, four or five more listings to your, to your network. So I think, you know, taking advantage of more technology to leverage this asset you have in your network, I think is where we're going to take over a lot more market share. We talk about this a lot. You own a field of diamonds here. And that whole concept, you just have to walk through the field and pick up the diamonds. But a lot of people like to sit back and say, hey, can somebody bring me some diamonds? I'll pay you for those. We have a field of diamonds. You pick up your phone and you look at it. That is your window to the world. That is your field of diamonds. And first is the mining company that can go out and

find those for you. So why are we not going out and picking them up? You know, and to give agents a lot of credit though, it's really hard. You've got to run an entire business. These are entrepreneurs. And you know, in our company, we had salespeople. They weren't responsible for running the business and doing customer support and doing the whole thing. I think it's an amazing entrepreneurial venture as an agent to run your own business or as a broker. And I've always believed if you're going to start a company or product, you've got to

focus on a primary pain point. It's got to be like the number one pain point. And this really was the number one pain point. It's got to be like the number one pain point. And this really was the number one pain point. Because as I'm running all of my business, where do I find the time to follow up with 40 people to maybe get one or two more deals? That's the hardest part because it's hard to have 40 conversations. So when we can shorten that to four, five, six conversations to get you that deal, that's where we found we can add a lot of leverage. I love that. And you're right. Being an agent is hard. It is. Being an entrepreneur is hard. Running a real estate business is a very challenging thing. And God love this industry. It's incredibly challenging, but fantastic because you get to

help people realize their dreams and you get to realize yours in the process. So a huge thanks to First for helping people in that dream chase that we're all after here by helping us connect better with the amazing people that are in our contact list. It's hard to imagine. It's like going on social media and going, oh, I never knew they had a baby. Well, now you get to know firsthand because you're talking to them because those things are being served up to you. So Mike, part of the show is finding out a little bit about the people that are on the show. How do you get to the point that you're at in life? Because you've done something amazing. You've built an incredible company that helps so many people. Do you have any favorite books that you read that help you get here? who cares about products, Inspired by Marty Kagan, really talks about how to build a great product organization, what that looks like from product strategy to building great teams and how

they work, focusing on outcomes rather than the outputs. It's a really great kind of framework for any technology company. And now more and more companies are becoming technology companies, right? And then another one is Measure What Matters by John Doerr. And it's really about the OKR framework. And he pioneered this at Google when they were just 20 or 30 employees, and that's a big part of that. But really aligning a company around objectives. So those are two recent business ones that get me fired up. Awesome. How about a favorite quote?

I was thinking about quotes regarding this podcast. And one of my mentors and colleagues often said, performance is best when measured. And you hear people talking about differences around performance and measurement, but I love that one because you're not at your best performance if you're not measuring it. That is awesome because fundamentally, that's what the first app does is it coaches you and then it measures your performance. That's right. I love that.

The minute you start running and you start tracking how fast you're running, you actually perform better. It's just a fact. Performance is best when measured. I love that. And final question for you, Mike. How do you define starting your day with a win? That's a great question.

So I like to work backwards from when I go to work and walk in the office. And same mentor said, figure out that one thing that you have to get done today. That's most important before you walk into the office, or if you're working from home before you turn on your computer, know what that one thing is and do that first. And don't get don't stop till they're done. Awesome. I love it. Thank you so much for joining us today. Mike Schneider, co founder, CEO of first one of the newest members of the Remax family of brands, an incredible technology company doing a great service to the real estate industry, helping agents uncover the additional business in their contact list. Mike, happy to have you here today. Thank you so much for joining us.

Thanks for having me. Thank you so much for listening to today's podcast. If you'd like to ask Adam a question and potentially be on the next episode, give us a call and leave us a message at 888-581-4430. Don't forget to go on to iTunes and subscribe, write a review and rate the show. For more great content, follow Adam on Instagram, Facebook, Twitter, and remember, start with a win.