Homestore promises no 'white elephants'

August 21, 2002

Customers to get fair deal on new products

Inman News Features

Homestore is promising its existing customers "the benefit of their bargain or better" when the company's anticipated "new" makes its debut later this year.

That promise comes from Allan Merrill, EVP of Homestore's corporate development group, who is reassuring real estate pros they don't need to be concerned about missing out if they purchase existing products now rather than waiting for the new product line.

"Customers who buy (our existing) products will have all of their contract terms absolutely honored. To the extent that new products result in enhancements, they will have the benefit of all the enhancements. There is no prisoner's dilemma where customers have to bet on whether they should (buy now) or wait," he said.

Merrill declined to provide specific examples of how enhancements would be incorporated into existing products. But he said the company is committed to ensuring all its customers get a fair deal.

"No one is buying white elephants. No one is going to end up with a service that gets shut off. No one is going to have a product or service that they paid for denied to them, nor are they going to be precluded from being able to improve or enhance the way they do business with us," he said.

Homestore is keeping the new tightly under wraps, but CEO Mike Long has doled out a few tantalizing hints about the Web site and product line in development at the Westlake Village, Calif.-based company that operates as an official Web site of the National Association of Realtors.

Long said some undisclosed "key customers" around the country are beta testing the new offerings, but the new won't be announced until the details are finalized.

The unwrapping may come in November around the time of NAR's next governance meetings and annual convention slated to be held in New Orleans.

The new is a core element of Homestore's strategy to capture more of the billions that brokers and agents spend on advertising.

"The real estate industry spends approximately $9 billion a year on advertising, most of it offline in print classifieds. Yet consumers increasingly prefer to shop for homes and apartments online. This creates a huge market opportunity to move more of the industry's ad spending online and capture our share of that spending," Long said during a recent meeting with investors.

The new will be far less bundled than Homestore's older product packages. Long said combining media and technology products "made sense" four years ago because customers then didn't have their own Web sites. But he coupled that kind nod to the prior administration with a pointed criticism of product bundling. He said tight combinations of products resulted in confusing pricing schemes, limited choices for customers and obscured product benefits.

The new product line is designed to be more "self-service," more easily understandable for novice real estate salespeople, and more focused on giving customers choice and flexibility in designing online marketing programs.

Homestore has hired an inside sales team to target smaller brokerages, snag repeat business and cut the company's unacceptably high sales cost per order.

"We have done a pretty good job of selling an annual listing product to the largest national and regional companies. We have not been nearly as effective in reaching the smaller customers or accessing the weekly and monthly discretionary spending of the larger firms. With a simplified product set and a cost-effective inside sales effort, we believe we can accelerate the shift of marketing dollars from traditional media to the Internet and to our Web sites in particular," Long said.

Whether individual agents will open their own wallets for products remains to be seen. But one thing is certain: Long and co. know how to keep a secret.

Copyright: Inman News Service

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