Automation: Which type of laziness do you prefer?
Richard Thaler won the Nobel prize by proving a fact that real estate agents are all too familiar with; people are pretty irrational.
In his famous study he found that taxi drivers behaved in a manner that was not conducive to maximizing their economic benefits. In summary they set daily earnings targets. On busy days (lots of rides) they hit their targets faster. On slow days (less rides) they had to work harder/longer to earn the daily income target. This is really fascinating stuff to economists who have operated under the simple assumption that humans will work harder when there is more opportunity. Had the cab drivers worked more on busy days or simply worked a set schedule they would have ultimately earned more money with less effort. (the max benefit)
This is a scene that looks familiar in real estate today. Rising asset prices from low inventory (and cheap credit) have been sending droves of people into the market. In such a time of pure feast agents (in my observation) have taken the non-maximizing behavior. They want less. Less leads, and less time spent working with them. Give any agent a huge abundance of leads, and the common behavior is to cherry pick. The providers of these leads (broker/team owners) tend to hope for the opposite behavior. One of maximization. This creates a divide in perspective. The solution? Automation.
Owners train their reps to follow often rigid “proven” follow-up processes. Agents like all humans have a natural capacity for how many people they can physically execute the proven process upon. This is where automation comes to the rescue. We automate as much of the proven process as possible, and therefore give our agents a boost in productivity. Whenever I participate in a discussion on the benefits of automation; often what’s discussed can be summarized as “Let the machines do the dirty work”.
This is certainly a great concept. Who doesn’t love their washing machine? If we had to hand wash all of our clothes we’d all dress more like Gary Keller.
This is usually as deep as conversations on automation tend to get. Let the machine do the monotonous boring stuff so we can do other things. Now take a step back, and think about this. How much has the world changed since the invention of washing machine? Does it seem a bit more complex? I’m sure this could be a great debate, but I’ve yet to find any writings of Lincoln expressing his frustration with managing three google apps accounts. Simplicity in a complex world holds a lot of value. (Fun game: count how many times you see “simplified” in advertising) Even though I poke fun at ‘ole Gary above, there’s no doubt his wardrobe choice is intentional, and provides the benefit of simplicity.
When adding automation to your business; consider what type of automation you might actually need. Here are two types for your consideration.
- Dumb Automation: Let the machines do the simple/dirty work so I don’t have to. I’m busy, and can’t be bogged down with such tasks.
- Smart Automation: This is really important, crazy complicated, and I’m bound to screw it up. Help me Mr. Roboto!
Dumb automation makes our lives easier by reducing the volume of tasks we have to execute ourselves. Smart automation makes our tasks simpler to execute. There are obvious merits for both, but the real estate industry with it’s “proven formulas for success” tends to heavily favor the former. This may not always be the right choice. An example….
Picture a wall with two doors. Now imagine on the other side of those doors lies your next commission check. Both doors are locked, and to open either one you must accomplish a task…
Door #1: Send an email. That’s it! You can even copy & paste one of your proven scripts. Just Ctrl + P and click send.
Door #2: Review a database with 100,000 leads. Find ones you have spoken too before that are ready, willing, and able to buy/sell. Rank those in order of importance with a mathematical weighting. Now take the top 10% of the ranking, and sort them by likelihood to open, read, and respond to a sent email.
Clearly this is a no-brainer of which task will be easier to accomplish in order to get the commission check. This is the beauty of smart automation. It can take the incredibly complex job of choosing where to spend our time as an agent, and make that decision for us in a predictable way. That consistent predictability also allows us to tune/tweak the decision making overtime to make it better. This is the beauty of Artificial Intelligence, and how it’s been used by a lot of smart people to accomplish some great things. Meanwhile the real estate industry has successfully dumbed it down to “responding to inquiries so we don’t have too” What a pity.
Ray Kroc (McDonalds), Henry Ford, and a lot of other rich jerks figured out long ago that most people can be trained to execute simple tasks effectively. They took complex processes, eliminated the complexity, and put people to work on the execution. It’s a pretty effective business model. Consider this when looking for automation to grow your business (even if it’s just you). Sending a text, an email, etc. might be a little boring, but what if it’s all you have to worry about to make lots of money? That’s a pretty sweet deal too.
Want more ramblings on automation? Look no further
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