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BLOCKBUSTER On The Block: A Business Lesson For REALTORS and Lenders

Blockbuster on the block: Mike in Tucson, AZ mortgage lenderBlockbuster on the block:  "STORE CLOSING ~ ENTIRE STORE ON SALE ~THIS LOCATION ONLY"

The problem?  It's not "this location only." One by one, Blockbuster stores in Tucson are closing.  And it's not just Tucson...

A Consumer Shift
September 22, 2010: WSJ's Mike Spector writes "Blockbuster Inc. is in the final stages of preparing a long-awaited bankruptcy-court filing, marking a milestone in consumers' shift away from brick-and-mortar video stores to films delivered by mail and the Internet."

Blockbuster filed bankruptcy the next day.  Chances are very good that you helped put them in the tank.  "Me?" you say.  Yes, you!  ...and me, and your neighbors, even company employees who signed up with Netflix.

That's the nature of a consumer shift in preference for product delivery.  A new method of delivery makes it easier and/or less expensive to buy the product.  Early adopters try it out, find that it works, and they tell their friends.  Their friends try it, like it, and a shift in customer habits creates a groundswell.  The old delivery method withers and dies.

It's not about loyalty to the brand

Early in the life of Netflix (my customer when I was Product Specialist for OPEX Business Machines Corporation) Blockbuster studied the upstart Netflix. 

Someone at Blockbuster came to the conclusion that the alternative business model (originally mailing DVDs through the mail) was not a significant threat because Blockbuster had achieved such significant brand loyalty.  What they failed to see was that technology was changing and evolving, and that Netflix, with its huge database of current customers, was in a superior position to make use of that technology. 

(Blockbuster had a huge database too, but it focused on payment processing and late fee collections.  Blockbuster's use of technology revolved around making things easier and more profitable for Blockbuster Inc., not for the customer.)

Consumers weren't loyal to the Blockbuster brand.  They were loyal to their favorite movies!  They were loyal to convenience.  They were loyal to their pocketbooks and their couches, and this is the lesson for Real Estate Agents and Mortgage Lenders.

It's about convenience, predictability, reliability ...and finally, price

Convenience:  We're a nation of very busy couch potatoes.  We work hard to keep and maintain the lifestyle we want, and we've come to expect that businesses we patronize will make things easy for us.

Predictability: We've come to expect that things will work right the first time.

Reliability:  We've come to expect that things will work right every time

Price:  Price point is not the beginning of the business success equation.  If you're a REALTOR, you know that!  FSBOs (For Sale By Owner) list their homes with realty companies something like 70% of the time after 60 days of not getting what they want ~ the sale of their house. 

Takeaway

Let's look at technology as a benefit for our customer or client, and see how we can innovate for them.  Let's realize that technology is changing more than our marketing strategy.  It's changing the way we deliver our services.

If your company hasn't realized this, if it hasn't taken steps to make the delivery of services convenient, predictable, reliable and less expensive, you might want to start looking for a company who is headed down that road.

Your company may be headed down a dead end street.

_____________________

I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender.

NMLS #223495

SUNSTREET MORTGAGE llc ~ Correspondent Mortgage Bank
Offices (AZ) Mesa, Tucson, Sierra Vista, Nogales, and Albuquerque, NM.

 

 

Comment balloon 93 commentsMike Jones • January 28 2011 07:40AM

Comments

Mike, excellent reminder about being smug or assuming the Brand will carry us. I suggested as I think it is a post that everyone needs to "think" about.

Have a great weekend.

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) about 8 years ago

Missy,

Thanks for being the first to comment.  In July of 2009, the company I worked for as a mortgage lender went bankrupt, and I was fortunate to land at Sunstreet Mortgage that same day.  I attribute that success to my Active Rain blog presence.  It's still how my clients find me.

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) about 8 years ago

Hey you got featured, I look forward to the discussion, Mike.

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) about 8 years ago

I have still never ordered a movie via Netflix.  Our nearby Block Buster was missing last summer when we went to get a movie, it was in a plaza with one of the grocery stores we frequent so it is kind of bizarre we did not see their going out of business sale signs.  It had been like a flea market for their last year or so of business.

It was not really loyalty... 

Real estate  "It's about convenience, predictability, reliability ...and finally, price" 

 

Posted by Maureen McCabe, Columbus Ohio Real Estate (HER Realtors) about 8 years ago

You could see this coming as early as year 2000 , with Blockbuster's attitude (you've outlined) towards their customers ! They were over confident and totally asleep at the wheel technology-wise !!!

Our Take away - In 2009, the NAR Survey showed that 62% of home Buyers were under age 45 ! Is our marketing technology matching up with their use of it ?

 

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) about 8 years ago

Hi Mike, the stores in my area are closing as well. Blockbuster took out the small mom and pop video shops years ago. Karma, lol.

Posted by Jackie Connelly-Fornuff, "Moving at The Speed of YOU!" (Douglas Elliman Real Estate in Babylon NY) about 8 years ago

Mike,

Great job on the feature and I really enjoyed the post. Might I add my 2 cents? I feel Blockbuster lost their place as leaders due to one simple fact. A true lack of customer service. How many times were you late and their business model nailed you for an extra $10, $20, or $30 dollar for being a day or two late. Unbelievable greed and lack of concern towards their customers reaction.

Well they paid the price, I wonder how many of us are guilty of the same sin?

-Brent

Posted by Brent & Deb Wells, Prosper TX (LivingWell Properties) about 8 years ago

Mike, it doesn't pay to get complacent in this business. You have to keep up with technology, the market and the consumers needs.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 8 years ago

Mike, what a GREAT post, and fantastic correlation as to how we need to change our businesses to best serve our customers. Making it about THEM is what it should always be, but the Blockbuster example really drives that home!

Posted by Marney Kirk, Towson, Maryland Real Estate (Cummings & Co. Realtors) about 8 years ago

Blockbuster is another American store that did not change with the times. This is a great example for real estate professionals to keep up and go beyond todays standards to stay in busine$$$$$.

Posted by Harry F. D'Elia, Investor , Mentor, GRI, Radio, CIPS, REOs, ABR (Real Estate and Beyond, LLC) about 8 years ago

Whose not loyal to convenience and their pocketbook?  There's a lesson in here for all businesses and real estate is no exception.  

Posted by Donna Yates, Blue Ridge Mountains (BHGRE - Metro Brokers) about 8 years ago

You have to always keep your eye on the ball....or as the disclaimer in tiny print at the end of mutual fund promotions state: 

"Past Performance Does Not Predict Future Performance"

Posted by Howard and Susan Meyers (The Hudson Company Winnetka and North Shore) about 8 years ago

Very well said!

Posted by L. Scott Ferguson, Sunny Florida Real Estate Professional (Ask4Ferguson - Your House-SOLD Name in Real Estate) about 8 years ago

Great post, Mike.  Yes, technology tends to even the playing field, and in an economy like this, consumers aren't nearly as loyal as they once were.  Blockbuster is an interesting case study.  I read a book entitled "The making of a Blockbuster" some years ago.  It's the history of Wayne Huizenga, the founder of Blockbuster.  It takes you through his days with Waste Management and up through the mid nineties with Blockbuster.  He saw the writing on the wall even way back then, and got out while the gettin' was good.  He was, and I believe still is, the master of the consolidation theory and a superior brand builder.   

Posted by Mitch Gover (BidOnRealty.com) about 8 years ago

Our Blockbuster is still open at the moment, but I'm not sure how.  Great reminder to stay up with the times!

Posted by Bob Haywood, BobHaywood.com (McGraw Realtors) about 8 years ago

I remember when Blockbuster first started up. They put many Mom and Pop video stores out of business!  Guess now Mom and Pop are having a good laugh.  Revenge can be sweet!

kk

Posted by Kristal Kraft, Selling Metro Denver Real Estate - 303-589-2022 (The Berkshire Group Realtors) about 8 years ago

Mike: Thanks for the post. I think the slogan "adapt or die is always fitting". I know my company is always looking for ways to reinvent the wheel. Thus, we're doing pretty well. How large is Sunstreet? We have a big operation in Phoenix as we merged with Core and are always looking to partner up. Contact me if either you or the principals are interested. Thanks!

 

 

Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) about 8 years ago

OOOOH, I love this post.  I saw that Blockbuster just yesterday and thought, yep, end to another era.  We must be prepared to try new things and travel new directions...and make it easy for the consumer.  Two days ago I received a contact request through AR, asking for information on particular Tucson homes.  She said her husband wasn't computer savvy and they didn't have a home computer, would I mail my findings.  They are a retired couple relocating to AZ, and also, their sister is moving.  She told me THREE other agents haven't replied to her.  My envelope is in the mail - I will make it easy for her on her terms.  Your story really made me think of that.  It's about the customer, not the business.  Have a great weekend!

Posted by Cara Marcelle Mancuso, Call a Marana neighbor, I'm THERE! LONG REALTY (Long Realty - Dove Mountain, Marana AZ) about 8 years ago

I really enjoyed your post and you have an excellent point. In business, in life or just racking up AR points. It takes a lot of work to get to be #1, but that's when the real work begins. To become complacent is the first nail in the coffin of any business.

Posted by Larry Atkins (State Wide Realty Co.) about 8 years ago

Blockbuster alienated plenty of users by charging exhorbitant late fees.  This created a group of people just waiting for a different business model.  When Netflix came along, they jumped (I remember, I was one of them in their hometown of Los Gatos).  New we have Netflix, On Demand, Redbox.  This is just too much for Blockbuster to overcome.  In the last year we've seem Blockbuster Express (like Redbox).  They better sell that unit before the rest of the Blockbuster stores bring it down.

Posted by Geoff ONeill (John L. Scott Medford) about 8 years ago

The moral of the story is to keep looking for ways to do it better and you said it well, Mike.

Posted by Teral McDowell (Referral Patners LLC) about 8 years ago

Mike, great thought process of the way the market went from Blockbuster to Netflix to pay per view and streaming video. Focus on what the customer wants not what the company wants. Excellent translation to real estate too.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) about 8 years ago

Mike - Blockbuster was doomed as soon as broadband became fast enough to stream video, I suspect that netflixs will also face a serious challenge from Apple in the near future.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) about 8 years ago

Convenience is a huge factor. I purchase on-line so much that I rarely go to the store. Except for groceries. Amazon has become my favorite place to shop. Their prices are excellent, I don't pay tax, and they deliver right to my door. Who could ask for anything more? Oh, yes I am a Netflix customer as well. Have been for years. Excellent reminder that we need to focus on the need of our clients.

Posted by Tammie White, Broker, Franklin TN Homes for Sale (Franklin Homes Realty LLC) about 8 years ago

Great take away from a different business.  Your point on technology is spot on.

My first video blog: http://www.youtube.com/watch?v=mmcj64p-4DI

Danny Dietl

Visit our NEW website and 'Like' it on Facebook.

www.iMetroProperty.com

Posted by Danny Dietl, Buy, Sell, Lease - iMetroProperty.com (www.dannyrealestate.com) about 8 years ago

Mike-

 

Anytime a business model looks out for their selfish interests first and not the customer, they will lose.  I truly believe that is why blockbuster did not win brand loyalty.  Again, Blockbuster and Netflix is providing the customer an end product (the movie rental).  It is more important that they have an excellent system to provide that product called their service.  When I have called Netflix before for a broken movie or complaint, I did not find their customer service to be any worse or better than Blockbuster.  They are in the product convenience market first.  

I firmly believe the real estate industry business model is very different and this is a stretch to state that we would fall into this same category.

Personally when it comes to our business of selling mortgages, I do not know a consumer out there that truly wants a mortgage product.  It is a necessary by product to purchase a home if they do not have the ability to pay cash.  Most clients I deal with are looking for honesty and integrity in choosing the product and want my service backed up by reliability and predictability.  That is a very different model.  

 

Just my 2 cents, still it what a great post, because it got me thinking this morning.   

 

Posted by Gary Miljour, Mortgage Originator NMLS Licensed in AZ and NC (Lend Smart Mortgage NMLS#207208) about 8 years ago

Moral to story is you have to keep changing your business model as your target market changes/ages/get married/has children/empty nester/retires/health concerns/death.

The same thing has happened to many Retail Stores and other business.

Remember the corner gas station- sometimes 4 on one corner, with a real mechanic

When the grocery store actually delivered groceries to you door step

The Milkman

Doctors made house calls

8 tracks, cassette tapes,real diapers, manual garage doors ,manual TV,(no remote)

Passanger Trains, high performance and big cars,manual windows and locks.

Sears/Kmart,Wendy's and Arbys are next-A business must change with the times, Dayton Hudson changed to Target and Walgreens has changed and made it over the years. Holiday Inn has changed fifteen times over the years to stay in business. The list goes on.

Keep your eyes open and do not be affraid to change, but most of all change with the trends.

 

 

 

 

Posted by Thomas Tom Carpenter (VanDyk Mortgage Corporation) about 8 years ago

Tommy-  Great Comments,

 

So true.  It is like "Who Moved My Cheese", Blockbuster could have adabted and choose not do. 

 

Mike-  Doesn't blockbuster have an online presense like Netflix now?  So their model is not completely dead except brick and mortar locations.

Posted by Gary Miljour, Mortgage Originator NMLS Licensed in AZ and NC (Lend Smart Mortgage NMLS#207208) about 8 years ago

Too much confidence can turn out to be a blind spot.  Great reminder that we always need to be open to the ideas of new and improved business models.

Great blog, thanks.

Posted by Shane Cook, Residential and Commercial Realtor (My Home Group) about 8 years ago

Are you capturing leads and deals because the previous agent is not online or has not maintained contact with their old client. I am. This is a great analogy ansd in real estate I am living it.

Posted by Corinne Guest, Barrington Lifestyles (Corinne Guest, Realtor | Barrington Realty Company) about 8 years ago

I love your analogy and your message.  At the end of the day we all need to make sure we're meeting our customers' needs.

Posted by Tara Cummins, Marketing Concierge, Strategy4SuccessNow (Stratagy4SuccessNow) about 8 years ago

Mike

Blockbuster will fade into history as once a great business model that did not adjust to stay competitive.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) about 8 years ago

Blockbuster offers a deal like Netflix (but you also have the option of switching mailers in the store - offering the convenience of mailers with the instant gratification of going and getting a movie.)

They also have their version of RedBox - unfortunately, it started on the East Coast and is SLOWLY creeping west.

 

However, NetFlix has decided that they are no longer threatened by Blockbuster, that filtering out physical DVDs is not going to hurt their business. 

 

 

I'm hoping Blockbuster hops back on the ball - the new CEO was the one who decided that the online program wasn't a 'big deal', and took away the major perks and stupid low prices.

Back in 2007, you got 3 DVDs in the mail for 14.99 a month. You could switch them in the store - a movie per mailer - for free, and as soon as you did your next mailers would ship out.

 

Now, half from disregard and half from Blockbuster customers being unable to return their movies by the due date and being subject to the dollar a day for their otherwise free movie, the terms have changed. The prices have gone up, and now when you switch a mailer out in the store, they have no due dates - but your next mailers won't ship out until after your in store movies are returned.

 

They still use DOS computers in the stores from before I was born, but they absolutely get the job done.

 

I'm not going to buy stock in Blockbuster any time soon, but if they ever do fully go under, all the naysaying Netflix users will be in for a rude surprise when they don't have the convenience of going to Blockbuster every time their Netflix mailers were delayed in shipping.

 

In relation to real estate: There is a CHANCE for otherwise dead end companies - they just need to take the initiative to think outside the box and start something new.

Posted by Kristi Knutson, Blog Trainer ☂ about 8 years ago

Mike - this is a really well written wake up call!  I'm going to be thinking about this over the weekend!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) about 8 years ago

Good Morning Mike!  I was working on a post on this same concept and have had some interesting conversations with people saying 'oh how sad for Blockbuster' without realizing that no, it's not sad, it's business.  Blockbuster wasn't flexible enough to stay ahead of the competition or smart enough to stay abreast of the needs of their customer base.  Loyalty is one thing but just because you earned it yesterday doesn't guarantee that it will last if you fail today.

Posted by Dee Bundy, Helping You Make Colorado "Home" (Fort Collins Realtor @ C3 Real Estate Solutions) about 8 years ago

WOW Excellent post and great comments!  I remember reading a news blip about 10 business' that will go under in 2010 and Blockbuster was on that list.. The one in our town is still up and running but it wouldn't surprise me to see it closed tomorrow.  Red Box is HUGE here and there are always people at them all the time.  When we travel we'll rent a Red Box in one town and return in another.  That's convenience for me. 

I love the bottom line.  It's about the customer, always has been.  If you're a smart CEO you realize that from the start.  Give the people what they want!

Posted by Carey Valentine (Medallion Mortgage Company) about 8 years ago

Blockbuster didn't move with the desires and use-ability of its consumers. It could have gotten into the DVD mailings, and now online streaming, but it sat stagnant!
Garrigus Real Estate

Posted by Devona Garrigus, REALTOR® / Short Sale Specialist (Garrigus Real Estate) about 8 years ago

Those characteristics do matter to customers.  However for a transaction involving the amounts of money used for houses, that is done small numbers of times per person, I think that the comfort of a major brand is very reassuring to many customers.

I recently reaffiliated all the non-listing agents on my team to a much lower cost brokerage, but kept my own listing business under the big balloon of RE/MAX.

Sure enough!  The last listing presentation I made last week the client volunteered to me that they had both bought and sold using RE/MAX agents the last time around and were very comfortable with RE/MAX.

They gave me the listing, although the had talked to other RE/MAX agents, because of the other characteristics mentioned.  I doubt, however, that they would have listed with a non-RE/MAX agent.

Posted by Jim Gilbert, The Gold Homes Team (Keller Williams Fairfax Gateway) about 8 years ago

Blockbuster provided bad customer service.  Who in business would ignore the customers' desires and expect to survive?  Unlike what our government says a business is not too big to fail.

Posted by Evelyn Kennedy, Alameda, Real Estate, Alameda, CA (Alain Pinel Realtors) about 8 years ago

Mike, I actually worked with the attorney that put Blockbuster on the map here in Chicago.  It was six millionaires who pulled this concept together.  We had a client to serve but do not think that it wasn't hard and there were times where we knew it would shut down all the Mom's and Pop's. 

They had a concept but they didn't implement through the attitude, service and branding.  It is something that we need to serious re-evaluate as we are always and could be one step away from something like this ... unless we make sure that we retain the highest integrity, best service that we can provide and protect and promote our client's best interest.

Congrats on the feature.  Great comparison.  Can't say that I am sad that this has happened because I still have that sad gut feeling of what this concept did to all the Mom's and Pop's.

 

Posted by Barb Van Stensel about 8 years ago

I'm not responsible because Blockbuster tanked.  When I went with Netflix I was going for price, convenience, selection . . . Blockbuster nailed everyone for "late fees" -- and probably made a TON of money for that.  They didn't want to change their business model because how could they profit from LATE FEES?!?  Don't kid yourself.  They lived by late fees, they died by late fees.  Netflix solved one problem:  NO LATE FEES.  Life happens and they recognized that it doesn't revolve around returning a movie to Blockbuster before noon.  The trips forth and back, to rent/return a movie were a pain in the ass.  Netflix was a brillant alternative, and if Blockbuster was too brittle to SHIFT, don't blame the consumer.

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 8 years ago

Didn't hurt that customer service at Blockbuster was just so-so.  As NetFlix has grown and branched into on demand delivery they have really taken all the reason out of the market to go to the store and rent a movie.

Posted by Jacquie Cliff, - Real Estate and Short Sale Expert (Champions Real Estate Services - Lynnwood, WA) about 8 years ago

Definitely some great points you make!  Will take this into account with planning the year. 

Posted by Charles A about 8 years ago

Mike,

I totally agree with you ... people were never loyal to Blockbuster, they wanted movies and Blockbuster was convenient.  Customers/clients want convenience, they want to know that their Realtor is "there" when they have a question or concern.  As times change, we must adapt to those changes, or our business will suffer ... just like Blockbusters.  Fantastic post!!

Posted by Monica Foster, Broker, CRS, ABR, SRS, CHMS, CNE, CNHS (Monica Foster Team of eXp Realty) about 8 years ago

I haven't been to Blockbuster in years. I said to my husband in November to mark my words, they will be closed before the end of 2011. Last week the signs went up! Customer Service is the key to any business and staying in touch with consumer needs is paramount.

Posted by Gail Szeluga, Manalapan, Marlboro & Monmouth County (Weichert Realtors-Marlboro, Manalapan) about 8 years ago

A perfect example of why I run a virtual real estate office. The brick and mortar re offices will soon be a thing of the past and I'm already ahead of the game...

Posted by Cory Barbee, Broker (760) 563-4022 about 8 years ago

WHOA!

I responded to the first comment at Oh Dark Thirty this morning, and then went back to bed.  Early appointments, busy day, and now it's around 6:00 in Tucson.  Featured!  Thanks for all your thoughtful comments!

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) about 8 years ago

Great analogy and so very true. We need to pay attention to what our clients want not what we think they want, and it had better be NOW!

Posted by Jeanne Kozak, REALTOR and Broker/Owner in WV and VA (RE/MAX In Action) about 8 years ago

Mike  - This idea makes a lot of sense. I'm marking it to ponder over for a while.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 8 years ago

I call it a game changer. So are you in the game or on the bench? Blockbuster was clearly on the bench!

Posted by Markita Woods NMLS#196099, Queen of Mortgages - FHA, VA, Conventional, USDA (Fairway Independent Mortgage) about 8 years ago

Much as I love your photography, Mike, I love your writing, too.  I still remember that first post of yours about John Wayne country... I had no idea you were new to Activerain because you were a natural blogger!

Posted by Margaret Woda, Maryland Real Estate & Military Relocation (Long & Foster Real Estate, Inc.) about 8 years ago

If I can go click-click and get what I want delivered, why would I spend 1/2 hour in the car to get it?  Things change.  Great post.

Posted by Kathryn Acciari, Brand Ambassador and Business Coach (Century 21 Real Estate) about 8 years ago

Blockbuster bit the dust because of poor Customer Service, Failure to Embrace New Technology, and Unwillingness to Cut Their Prices in the Face of Competition.

Real Estate Offices and Real Estate Agents should take note.

Great post, Mike.

Posted by Fred Griffin presently on Leave of Absence, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) about 8 years ago

"We're a nation of very busy couch potatoes."  I love that line in your post.  While I'm not a fan of the big late fees, I will be disappointed to see Blockbuster go. 

Posted by Melanie Hedrick, 972-816-7205 (Elite Texas Properties, the best homes from McKinney to Dallas!) about 8 years ago

Mike,

Excellent post.

I helped put Blockbuster out of business.

The late fees killed me, so I stopped using them about 7 years ago.

Phil

Posted by Phil Leng, Phil Leng - Retired (Retired) about 8 years ago

Wow - so true. Times are changing and we have to change with the times.

Posted by Joyce Herr, Lancaster County & Beyond (Prudential Lancaster Real Estate) about 8 years ago

Even the mailing of physical DVD's will soon be a thing of the past, digital downloads is becoming the norm.  I can set on my coach or lay in my bed and preview hundreds of movies through my cable connection and download them instantly.  No late fee's, no time driving back and forth to a store, no waiting for the mail.

Posted by Steven Pahl, Real Estate Consultant Tampa, FL 813-319-6423 (Keller Williams Tampa Properties) about 8 years ago

Technology marches on and waits for no one and those foolish to think otherwise will wind up eating the dust of those astute enough to keep up with the technological advances.   A valuable lesson for our own businesses...thanks for sharing.

Posted by Judi Monday, CRS-Green Valley AZ Expert, Green Valley Arizona R (RE/MAX Valley Properties) about 8 years ago

Great, well written post.  You gave us all someting to think about.  Thanks!

Posted by Bob Zorechak - ABR, GRI, e-PRO, Sells Homes in Morris/Somerset/Hunterdon Cos., NJ (Keller Williams Realty Metropolitan) about 8 years ago

I think this is the way of the future!  A new business will start up with new technology, do great for a period of time, BUT, as technology invents something new, alot of businesses will close.  Some "Very Smart" people will probably start and close several companies over the next 20 years as the technology changes.

Posted by Woody Edwards, A Realtor® Who Answers His Phone! (First Choice Realty, Inc) about 8 years ago

Great post, Mike.  It's a reminder to "stay with the times."  I recently read another feller "rainers" blog about her manager's questions for how to attain business in the coming year and she laughed because there was not ONE mention of internet presence.  With an estimated 90% of all home sellers AND buyers starting their searches on the web, how can that manager NOT make the shift?  I think he needs to see this blog.

Posted by Juli Vosmik, Scottsdale/Cave Creek, AZ real estate 480-710-0739 (Dominion Fine Properties) about 8 years ago

Great post, great analogy. I helped putBlockbuster out of business too! Fortunately, I bought stock in Netflix when it was around $20/share....it's over $200 now. Too bad my brokerage hasn't gone up by the same factor!

Posted by Tim Bradley, Commercial Real Estate Expert in Jackson Hole, WY (Contour Investment Properties) about 8 years ago

You are right on with the scenario that Blockbuster had absolutely no concern for their customers! I stopped using them long before they announced their problems for this very reason. One other example of their total lack of customer concern was their "Gift Cards". My sons gave me one for a birthday or Crhistmas gift, I set it in my desk for awhile and then one day we decided to go spend it. Mind you they have had my kids money in their bank account using it as they saw fit, yet when I got to the checkout counter I found that my card had a zero balance???? What I never used it and all they could say was did you read the fine print on the back that said it would start disappearing with a monthly charge for not using it!!! I look at it as they should have been paying me interest on the card of using our money. They in their greed depleted it.

I don't feel sorry for Blockbuster one little bit. Their total lack of concern for their customers put them in this situation. It also baffles me as to why companies that seem to make it to the top suddenly stop looking at what got them up there. There are several examples in our industry as well for those that used to be #1 and they just continually kept pulling the rug out from under their agents feet.

Posted by Tony Hager, Broker (United Realty Texas) about 8 years ago

The bottom line is to watch and pay attention and then adjust...or we get lost in the changes. Good example.

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) about 8 years ago

Hey Mike:

Great post.  I was a loyal Blockbuster client for many years until about 2 years ago when I joined Netflix.  Blockbuster tried to copy the Netflix business model by allowing you to mail back your dvd's but it failed.  Based on a news report on Netflix last night, they said Netflix has doubled there client base from 10M to 20 M by offering streaming video.  Doubled their client base!!!  Moral of the story - today's business model may not work tomorrow.  We as lenders and realtors have to embrace technology and give clients what they want- an easy, convenient way to do business with us....

Posted by Dave Beckmann about 8 years ago

Keeping up with the times is vital with all businesses.  There is a great book out that is called "The Shift" and it is basically change or die with the Shift.  The world changes every day and the market changes with it.  Every day you need to make the Shift to the changing market.  Just look at the american car companies as a prime example.  They were late in shifting to the current market and GM and Chrysler needed government bail outs.  Ford saw the shift and put a brilliant plan in place to make the Shift to the present market.  the result is-NO BAILOUT, and a growing business that is doing well.

Posted by Ric Mills, Integrity, Honesty, and Vast Real Estate Knowledge (Keller Williams Southern Az) about 8 years ago

As a baby boomer this lesson is HUGE.  Good post Mike!

Posted by Robert Courtney, Century 21 All Islands, RA, CDPE, MCRE, CIAS about 8 years ago

This is a great post with an important lesson for real estate agents.  I believe that the real estate industry is severely broken.  It does not give customers what they want: access to full listing information on demand and on mobile devices, the ability to view homes without a real estate agent tour guide, the ability to write offers on properties that don't take 2-3 hours, transparency in real estate offer and negotiation process, etc.  I forsee a future where buyers will be pre-qualified and given a "Buyer ID Card" that will permit them to schedule showings direclty on their computer or mobile device and access homes via a special lockbox without ever having to meet a real estate agent.  They will then be able to make an offer online (similar to an online auction, but with more detail) by filling in some basic terms of the offer (i.e. price, closing date, financing/cash, contingencies, etc.) and upload their financin preapproval or proof of funds.  This would take them a few minutes.  To provide transparency, the online bidding system would provide full details on all other bids so the buyers (and sellers) can actually see.....THE MARKET AT WORK.  If trillions of dollars can be exchanged worldwide on open stock and other exchanges, why can't real estate?

Posted by Jim McCormack, Nashville Short Sale REALTOR - Stop Foreclosure (Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-784-EDGE (3343)) about 8 years ago

Mike, What a terrific post and how applicable to the Real Estate Industry. Looking at the post's below I am thinking about what more I can do to exceed my clients expectations in Customer Service, New Technology and yes Price.....hmmm.

"A perfect example of why I run a virtual real estate office. The brick and mortar re offices will soon be a thing of the past and I'm already ahead of the game..."

Fred Griffen says
"Blockbuster bit the dust because of poor Customer Service, Failure to Embrace New Technology, and Unwillingness to Cut Their Prices in the Face of Competition. Real Estate Offices and Real Estate Agents should take note."

 

Posted by Rita Legan, ASP Staging Realtor CDPE (eXp Realty) about 8 years ago

This is the perfect example of a "shift" that we must all be aware of. Another one is digital cameras ... bye bye film.

Posted by Cynthia Larsen, Independent Broker In Sonoma County, CA about 8 years ago

We must keep aware of new technology and always give outstanding service to our clients.

Posted by Brenda, Ron, Lee Cunningham & Tara Keator, Realtors, Homes for Sale - Phoenix Metro (West USA Realty) about 8 years ago

Mike, great post!It is good reminder to keep the customer first and formost in our minds!

Posted by Tony & Darcy Cannon, The C Team (Aubrey and Associates Realty) about 8 years ago

Hi Mike--

Congrats on the feature.  Great points about shifting with the times, and things are shifting really fast these days!  Being responsive to consumer needs is key! 

Posted by Tamara Perlman (Referral Network Inc.) about 8 years ago

 

The way people shop and get information has radically changed. Those who adapt will survive and thrive. Companies like Dell Computer have multiplied their sales by creating marketing strategies based around Social Media. I find learning and utilizing the technology to be very difficult. If I am unwilling to make the effort, I might as well retire.

 

 

Posted by Doug Kaller (Academy Mortgage, Reno, NV) about 8 years ago

Good to learn from this business blunder. I personally still do not like Netflix but I do like RedBox because it's only a $1 vs. Blockbuster which is $4.50 for the same movie for one night. I guess they thought that we can't add?  I saw the same signs on one in my area just yesterday.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) about 8 years ago
Hi Mike, I kept waiting for you to haul out the " Buggy whips " analogy. Thanks for a great read.
Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) about 8 years ago

A good post, Mike, and an interesting discussion.  I've been in real estate in various mutations for over 37 years.  In that time, I've seen many paradigm shifts.  Sometimes I'm in the vanguard, sometimes just behind it.  Always, I've shifted my behavior with changing markets, attitudes and tools.  I began my career in the sincere and heartfelt belief that I was in a service industry and that demanded service to my client.  By that I mean fulfilling and surpassing their expectations.  Maintaining contact all the way through the process.  Hand-holding and understanding their concerns, deficiencies and fears.  As years went by and things changed, I found that I welcomed changes, many of which were helpful to my clients, and also myself.  Some I thought ill-founded and proved to be so, others frivilous and some just pompous.  Mostly though, I enjoy learning, and relish the challenge of something new.  With the right attitude, it can be fun.  It can get carried away, and become confusing, even self-deprecating if not planned well, or if one heeds the wrong advice (which, in this new paradigm, there is surfeit! :)  In the end, it is the attitude of the realtor that still matters.  If it is in your heartfelt belief that service, loyalty and care of your client is the fulcrum upon which your career and business is what success is, you will become one with the vehicles that require you to provide the same.  You will seek out and learn the tools that you will need to do the job.  You will adjust your approach and make the necessary changes.  Success and earnings will undoubtedly follow as light the day.

Posted by Ken Anderson about 8 years ago

It is interesting that as Block Buster goes bust, we can witness the explosion of it's replacement, Red Box. That's the kiosk you see at the grocery, Walmart and in the foyer of many big box stores.

It's not the product, as pointed out, it the conveince, the delivery.

Change is not necessary, survival is not guaranteeed.

Posted by frieswiththat about 8 years ago

Mike, Just living in Tucson demonstrates some of the change businesses must endure. When I was in high school there I went to SAS, now Fenster, which was 14 miles up on the edge of the national forest at the foot of Sabino and Bear canyons.  On Saturdays we were bused to town for dates, etc. Imagine that bus ride now in terms of changes. The piece of property on the SW corner of what would become Cloud Road and Tanque Verdi was offered to my grandfather for about $5,000, (1956). I would consider that a significant change from today's price. Incidentally he turned it down because he knew Tucson would never expand that far to the East.

As you implied, what we all know about our businesses today may be dead wrong tomorrow if we don't keep our eye on the changes going on around us.

Posted by Marshall Brown, BSEE, CHI (Mid America Inspection Services, LLC) about 8 years ago

In any business you must adapt to teh economy and your potential customer to stay on top and viable.

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) about 8 years ago

We must look ahead, create change or be left behind.

Posted by Dennis & Terri Neal, Your Home Sold in 45 Days or We Se (RE/MAX, Big Bear) about 8 years ago

We Have A Duty To Our Clients to Embrace Technological Progress.

Posted by R Grodin about 8 years ago
Great discussion. I loved Blockbuster, but there's 3 Redboxes within the same distance as Blockbuster and Redboxes is only a dollar a night. This year I had to make a change. My customers were wanting invoices electronically and photos ASAP. I changed my invoicing system that made it quick and easy to email. I used to deliver the photos on CD because the files were to large to email. Now I upload the photos to a server and my customer gets notification as soon as they're finished. I guess the next change will be the purchase of a video camera. :-) Jody
Posted by Jody Moore (Blue Shirt Photography | SendOutCards) about 8 years ago

Our tiny town once had two "mom and pop" video stores... now only the grocery store offers video rentals.

Your blog offers good food for thought... what is the next trend? How can you put yourself ahead of the curve and be ready to lead the pack?

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) about 8 years ago

I liked the people in the local store, but we did the blockbuster mail thing (like Netflix) and they were hard to deal with.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 8 years ago

Hi Mike

I think the world has always been that way and probably always will be......Brad

Posted by Brad Hornshaw, Realtor, Listing Agent, Buyers Agent, Investments (Brad Hornshaw Realtor Lynnwood, Bothell, Everett) about 8 years ago

Mike~ great post...Gee, give the clients what they want even though they may not ask for it. Blockbuster might have not been listening. A lot of good food for thought here....and some great responses as well

Posted by Lynn M. Bower, PA, ABR, GRI, RSPS, AHWD, PMN, CNE (John R Wood Realtors) about 8 years ago

Ironic for those of us in real estate that "bricks and mortar" establishments continue to fade away.

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) about 8 years ago

It's been known for sometime, via comsumer reports on TV news programs, that Blockbuster was in the business of NOT processing the videos that their customers returned on time so they could illegally charge late them fess, and it was the customer's word against theirs.  Well, guess what, that's a form of fraud, and people don't like getting ripped off.  They told their friends about being ripped off, and their friends told their friend about people being ripped off, so Blockbuster was already in trouble before Netflix came along.  Blockbuster also tried doing a DVD by mail service similar to Netflix, (but with all kinds hidden late fees), and it too failed miserably. Blockbuster was banking on people being stupid, but they weren't stupid.  Netfiix is an honest company, Blockbuster is not, and the public chose to do business with an honest company.

The other lesson to be learned here is about doing business honestly, and treating customers fairly. Blockbuster was a shady company, everyone knew it was a shady company, and it continues to be a dishonest company trying to pull the wool over the public's eyes with their bogus, "this store only closing" shell game.  You can only fool the people for so long, then it catches up with you.  I for one am glad to see Blockbuster go out of business.  They had it coming, and I hope that the higher ups at Blockbuster, the ones who made the decisions to rip off their customers, end up in the poor house, or better yet, the big house.  Since they made their money dishonestly they certainly don't deserver to keep it.  What they deserve to spend the rest of their lives in disgrace and poverty.

Posted by Gayle Martin about 8 years ago

Blockbuster's use of technology revolved around making things easier and more profitable for Blockbuster Inc., not for the customer.)

Dynamtie quote- Should be burnt into all of our brains!  Tech is so much fun, but is it making life easier for the consumer?

 

Thanks!

Posted by Scott Bingham, www.BeaufortHomeNews.com (BeaufortHomeTeam / Ballenger Realty) about 8 years ago

Mike Great Post!!! and so glad you got featured. I Actually bought a few movies there because I shop at that Fry's.

Here is my first thought about your post. I wonder how the Casa Video is doing on Speedway. It's still there and everytime i drive by there are plenty of people in and out and cars in the parking lot. I bet it has something to do with the HUGE selection that is there. 

I agree with the point you have made. But do not forget that if you have nothing to set yourself apart from the competition you will be forgotten. I think that was Blockbusters fall. A huge national chain outlived by a local business because they have "everything" even netflix can't compete with that.....not yet :)

Posted by John Bridges (Realty Executives) about 8 years ago

Great post! A Realtor has to keep an open mind to ideas and concepts.

 

Jerry Gray CRB,CRS,GRI,SFR / Allen Tate Realtors / Winston Salem, NC / 336-918-2433

Posted by Jerry Gray, Serving the Triad Since 1980 (Wilkinson ERA Real Estate) about 8 years ago

Great post, Mike. BlockBuster closed here in Flagstaff over a year ago. Most of the little independants are gone. Hollywood Video's big story became history and is now a big new Verizon Store (large enough to handle the Iphone crowd that will show up soon).

I'm a little ticked at Netflicks right now myself because they are pushing streaming instead of the mail-back service, but they are doing it nicely and, because they have been so good, I trust that I'll like the result in the end.

 

Posted by Ann Heitland, Retired from Flagstaff Real Estate Sales (Retired from RE/MAX Peak Properties) about 8 years ago

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